Aur gets green light for Zaldivar purchase

Placer Dome (PDG-T), half-owner of the Zaldivar copper mine in Chile, will not exercise its right of first refusal on the remaining half-interest, currently being sold by Outokumpu’s base metals subsidiary.

Placer Dome’s waiver paves the way for the completion of a purchase agreement reached between the Finnish major and Aur Resources (AUR-T) (T.N.M., Dec. 7-13/98). For US$265 million in cash and the assumption of US$100 million in debt, Aur intends to acquire a 50% interest in Compania Minera Zaldivar, the Chilean subsidiary that owns the Zaldivar mine.

Aur must pay Outokumpu US$240 million upon closing (likely sometime in February) and another US$25 million three years later. Aur will also assume US$100 million in subordinated debt owed to Placer Dome, with current terms consisting of semi-annual instalments totalling US$40 million per year at an interest rate 1.5% above the London Inter-Bank Offer Rate.

Aur hopes to finance the purchase using a combination of debt, equity and about US$25 million in cash.

Taking advantage of depressed copper markets, Aur recently struck another major copper deal: the optioning of Tiomin‘s (TIO-T) huge Cerro Colorado copper-gold-molybdenite deposit in Panama (T.N.M., Jan. 11-17/99).

Aur already operates two mines: the 70%-owned open-pit Andacollo copper mine in Chile, co-owned by Compania Minera del Pacifico; and the underground Louvicourt copper-zinc-silver-gold mine in Quebec, co-owned by Teck (TEK-T) and Noranda subsidiary Novicourt (NOV-T).