Faraday jumps on Lundin-, BHP-backed $100M deal

Faraday Copper (TSX: FDY) is raising $100 million (US$73 million) through a private placement backed by the Lundin Family Trusts and BHP Group (ASX: BHP) to fund the ongoing development of projects in Arizona. Shares hit an all-time high.

Vancouver-based Faraday said it plans to issue up to 23.81 million common shares at $4.20 per share, the same as its market open price, according to a statement issued Monday. The deal is expected to close by March 11.

Trusts settled by the late Adolf H. Lundin — currently the company’s largest shareholder — are expected to participate in the financing, as is BHP.

Melbourne-based BHP agreed Friday to sell its San Manuel property to Faraday in exchange for 30% of the Canadian company’s issued and outstanding common shares — representing about $240 million in implied value. It will also have the right to participate in future equity raises to maintain its ownership.

The announced private placement financing is “stronger than previously modeled,” BMO Capital Markets mining analyst Rene Cartier said Monday in a note. He had expected the company to raise $45 million and at a share price of C$3. The financing also came earlier than his forecast.

Faraday shares surged 7.8% to $4.55 on Monday afternoon in Toronto trading. Earlier the stock touched $4.60, its highest level since the company went public in 2022. Vancouver-based Faraday now has a market value of about $1.2 billion.

Copper district

San Manuel is located 19 km southwest of Faraday’s Copper Creek project in Pinal County, allowing the company to consolidate both assets in the heart of the Arizona copper corridor.

It comprises two deposits that operated as a combined underground block cave and open‑pit mine between 1955 and 1999. During that time, San Manuel was one of the largest underground mines in the U.S., generating over 4.5 million tonnes of copper production. The project has a non-43-101-compliant resource totalling 14 billion lb. of copper, according to company estimates, and has no recent exploration records.

Copper Creek is host to a large, 3-km-long porphyry copper deposit that holds 422 million tonnes in measured and indicated resources grading 0.48% copper equivalent, for nearly 4.5 billion lb. of contained metal.

“The combined project has the potential to become a multi-generational copper district delivering made-in-America copper, while providing significant economic opportunities to the local communities,” Faraday CEO Paul Harbidge said in Friday’s press release. “This would allow for the optimization of infrastructure and minimized environmental footprint compared to each project advancing independently.”

Haywood Capital Markets sees the San Manuel acquisition as “transformational” for Faraday, saying in a note that the deal would create “a major copper district” with the potential to produce 100,000-150,000 tonnes a year of copper for decades. Haywood raised its price target for the stock from $4 to $5.50, while BMO’s Cartier lifted his target from $4.50 to $5 Monday after the financing deal was announced.