Aeris Resources makes offer for Glencore copper mine

Aeris said in a statement that negotiations to buy the mine in Cobar were at a late stage, with the offer comprising US$525 million (£396.17 million) in cash, US$50 million in Aeris shares and a royalty payable to Glencore.

A spokesman for Glencore declined to comment.

The Queensland-headquartered Aeris, with a market value of AUS$78 million (US$55.19 million), said the acquisition could be funded through a combination of debt, an equity capital raising and a so-called streaming agreement through which it would sell silver produced at the mine alongside copper to Glencore.

“(Aeris) have a mine down the road, so as to that, it makes sense and the asset had been flagged for sale for a while,” said an analyst in Sydney, declining to be identified as the deal has not been finalised. “Cobar produces around 50 000 tpy of copper, so that would make for a mid-tier copper player in Australia.”

Glencore had put the mine up for sale in 2015, but withdrew it from the market in 2016 after failing to agree a deal with potential buyers.

The debt component of the acquisition would stand at between US$250 million and $300 million, with the capital raising at between US$185 million and US$240 million and Glencore’s streaming deal at US$35 million to US$40 million, Aeris said.

Aeris said it was in late stage discussions on funding with major shareholder Special Portfolio Opportunity V Limited, which is a subsidiary of a fund managed by Asia-based alternative investment manager PAG, as well with Orion Mine Finance and others. The equity component of the raising is being managed by RBC Capital Markets and Macquarie Capital, it said.

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