TORONTO - Lundin Mining Corp. (LUN.TO) has signed a deal to buy the Chapada copper-and-gold mine in Brazil from Yamana Gold Inc. (YRI.TO) in a deal worth more than US$800 million.
Under the agreement, Lundin will pay US$800 million in cash for the mine while Yamana will retain a 2.0 per cent net smelter return royalty on future gold production from the Suruca gold deposit.
Yamana will also receive contingent payments of up to US$125 million over five years if certain gold price thresholds are met and contingent consideration of US$100 million on potential construction of a pyrite roaster.
Mine production is from three open pits in close proximity
Lundin says the acquisition of Chapada increases annual copper production by over 25 per cent and adds approximately 100,000 ounces of gold production at attractive cash costs.
The company said it also comes with a mineral property package in a highly prospective district and that it believes significant exploration potential exists.