Aur nabs Quebrada Blanca

Aur Resources (AUR-T) has completed its purchase of a 76.5% stake in Compania Minera Quebrada Blanca, which owns and operates the Quebrada Blanca copper mine in Chile.

Aur paid vendors Cominco (CLT-T) and Teck (TEK-T) US$180.6 million, which includes certain debt and guarantee fees. Another US$500,000 will be paid by Feb. 20, 2001, as well as US$35 million in cash or shares by Dec. 31, 2003.

Aur must also pay the companies up to US$10 million annually, to a maxium of US$40 million, if average yearly (quarterly after 2006) copper prices exceed US$1.09 per lb. (adjusted for inflation). The company also assumes US$69.1 million in senior project debt owed to third parties.

Aur partially funded the purchase through a US$170-million credit facility with a group of international banks. The remainder came by way of a put option with Cominco and Teck in the amount of 5 million shares priced at $2.49 apiece.

Aur expects Quebrada Blanca to churn out about between 165 and 176 million lbs. copper in each of the next 12 years. Life-of-mine cash costs are expected to average US49 per lb. copper.

With Quebrada Blanca, Aur’s proven and probable reserves exceed 2 billion lbs., up from about 350 million lbs. The reserve is expected to fuel a threefold increase in annual production to 225 million lbs. over the next four years.

Aur has US$18 million in cash and about 91 million shares outstanding. The former excludes cash held by Compania Minera Quebrada Blanca and Compania Minera Carmen de Andacollo. The latter owns the Andacollo copper mine in Chile, in which Aur holds a 70% interest.

Aur also operates and owns a 30% interest in the Louvicourt copper-zinc-silver-gold mine, near Val d’Or, Quebec. The remainder is divided between Novicourt (NOV-T), with 45%, and Teck, with 25%.