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South32 to buy Arizona Mining for $1.3 billion

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1366498

SYDNEY: Mining giant BHP’s spin-off South32 is set to buy the remainder of Canada’s Arizona Mining for $1.3 billion to capitalise on “one of the most exciting base metal projects in the industry”.


South32 — which has aluminium, manganese, silver and selected coal and nickel assets — already owns 17 per cent of the Canadian mineral exploration and development firm and is seeking to tap into its Hermosa Project.


The project in Santa Cruz County, Arizona, has deposits of zinc, lead, silver and manganese.


“Our all cash offer for Arizona Mining will allow us to optimise the design and development of one of the most exciting base metal projects in the industry,” South32 chief executive Graham Kerr said in a statement.


Shares in South32 fell 2.69 per cent to $2.83 in mid-day trading in Sydney on Monday.


The all-cash offer of $4.70 per share is a 50 per cent premium on Arizona Mining’s Friday closing share price, the Australian company said.


Arizona Mining founder and executive chairman Richard Warke said the firm’s board deemed the offer as the “best outcome for all shareholders”.


The deal is contingent on an Arizona Mining shareholder vote in the third-quarter of this year, but is not subject to any regulatory approvals, the two firms said. — AFP


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