Antofagasta in, BHP out at Reko Diq (December 27, 2005)

A deal between Tethyan Copper (TYC-A) and Antofagasta (ANTO-L), under which Antofagasta will take up a 37.5% direct interest in the Reko Diq copper project in Pakistan and a shareholding in Tethyan, appears to cripple a takeover bid for Tethyan from merchant bank Crosby Capital (CSB-L).

Under the agreement, Antofagasta, controlled by the Luksic family of Chile, takes up 33 million shares of Tethyan, about 20% of the company, for US$20.5 million. The share placement dents the Crosby offer for Tethyan, a A64-per-share bid announced last May that has attracted (after some withdrawals) slightly more than 1% of the shares of Tethyan.

Antofagasta also buys a half-interest in Tethyan’s 75% share of the Reko Diq project, for US$37.5 million. Tethyan’s plan for Reko Diq, in western Balochistan province near the borders with Iran and Afghanistan, was to bring the Tanjeel oxide copper deposit into production. Tanjeel has an indicated resource of 152 million tonnes grading 0.7% copper, with additional inferred oxide and sulphide resources.

Antofagasta takes on a work commitment of US$75 million for exploration and development on the property.

The deal with Antofagasta buys BHP Billiton (BHP-N, BLT-L) out of its back-in interest on part of the property, which covered the large Western Porphyries deposits. The Western Porphyries have an inferred resource of 729 million tonnes grading 0.64% copper and 0.4 gram gold per tonne.

BHP gets US$45 million once the agreement closes and US$5 million over four years to give up its back-in right.


Be the first to comment on "Antofagasta in, BHP out at Reko Diq (December 27, 2005)"

Leave a comment

Your email address will not be published.


By continuing to browse you agree to our use of cookies. To learn more, click more information

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.