- In one of the biggest capital raises this year, Sandfire Resources (SFR) plans to raise $1.28 billion in equity to help fund the acquisition of the MATSA Mining Complex in Spain
- The ASX-300 lister will buy the Minas De Aguas Teñidas from Trafigura and Mubadala Investment Company for US$1.86 billion (A$2.57 billion)
- Once complete, SFR says it will be Australia’s largest copper producer, pumping out up to 194,000 tonnes of copper equivalent in FY22
- Sandfire will use a $897 million debt facility secured by MATSA, $1.28 billion equity raise and $497 million of its own cash and debt to fund the buy
- Company shares have been placed in a trading halt today, with securities last trading at $6.22 per share on September 22
Sandfire Resources (SFR) is planning to raise $1.28 billion in equity to help fund the acquisition of the MATSA Mining Complex in Spain.
It is one of the biggest capital raises this year, ranking only behind Transurban group’s $2.9M raise and Bank of Queensland’s $1.35b haul.
The raise is fully under-written and the company has been able to extend debt facilities for the shortfall.
While CEO Karl Simich says he’s frustrated that the raise issue price is $5.40 he says the deal is pivotal to re-setting the company for the decades ahead.
The ASX-300 lister wants to buy 100 per cent of Minas De Aguas Teñidas from Trafigura and Mubadala Investment Company for US$1.86 billion (A$2.57 billion).
The mining complex plays host to three underground mining operations which all feed into a world-class 4.7 million tonnes per annum central processing facility.
SFR said if all went to plan, it would walk away from the deal as one of Australia’s largest copper producers.
The company said once MATSA was combined with its own DeGrussa Operation, the business could produce up to 194,000 tonnes of copper equivalent in FY22.
To fund the buy, the mining stock plans to use a US$650 million (A$897 million) loan secured by MATSA, $297 million of its own cash and a seperate $200 million debt facility secured against its Australian assets.
Additionally, SFR plans to raise $1.28 billion in equity, including a $120 million placement to Australian Super, a $165 million placement to institutional investors and a $963 million entitlement offer.
Under the raise, shareholders and investors will be offered new shares at $5.40 each — a 13.2 per cent discount to Sandfire’s last traded price of $6.22.
Commenting on today’s news, Sandfire’s Managing Director and CEO Karl Simich said it was set to be a transformative acquisition.
“Base metal assets which offer this combination of scale, grade, mine life and exploration upside are extremely rare globally,” Mr Simich said.
“The MATSA acquisition transforms Sandfire into a first quartile copper producer of global scale and allows us to leverage our skill set to deliver on our growth ambitions to create one of the highest quality and most compelling copper exposures on the ASX.”
The company placed its shares in a trading halt on Thursday ahead of the capital raise and acquisition announcement.
Shares in Sandfire Resources last traded at $6.22 per share on Wednesday, September 22.