Banyan Gold Corp. (TSXV: BYN, OTCQB: BYAGF)
The New Yukon Gold Rush
As the electrified world becomes increasingly reliant on battery metals, particularly copper, BHP announced this week that it has reached an agreement with Lundin Mining (TSX:LUN) to buy another Canadian copper miner Filo (TSX:FIL), which owns the Filo del Sol copper project in Chile, for C$4.5 billion.
BHP and Lundin Mining will reportedly form a joint venture that will each hold a 50% stake in Filo. As part of the deal, BHP will also acquire Lundin Mining’s 50 per cent stake in the Josemaria copper project near the Argentine-Chilean border. Both mines are located in the Vicuna Copper Belt, less than 10 kilometres apart, and are several years away from production.
BHP aims to combine the two projects to reduce costs. The acquisition will also benefit from recently passed legislation in Argentina that supports the development of mining projects.
In a press release on Tuesday (30 July), Filo president and CEO Jamie Beck said, “Since first investing in Filo in 2022, BHP has proven to be an excellent partner and shares our bullishness on the potential of Filo del Sol.”
BHP CEO Mike Henry said the deal was in line with BHP’s strategy of acquiring attractive early-stage copper projects and building strategic partnerships with parties whose complementary skills and experience can deliver long-term economic and social value. He has previously said that copper consumption will double over the next 20 years.
Under the agreement, Filo shareholders will be acquired for C$33 per share, a 32.2% premium to the 30-day average closing price prior to 11 July 2024. The transaction is expected to close in the first quarter of 2025 if closing conditions are met.
Filo stock closed up 8.77 per cent on the Toronto Stock Exchange on Tuesday and is up 53 per cent so far this year.
Copper, which is used in wind and solar equipment as well as power grids and data centres, is becoming increasingly popular with miners in recent years.
Earlier this year, BHP attempted to acquire Anglo American to add to its copper business, but was ultimately unsuccessful. At the end of May, after three offers were rejected, BHP ultimately announced that it would not be making a formal offer for Anglo American and was unable to agree with Anglo American on a specific point of view regarding regulatory risks and costs in South Africa.
