First Quantum to buy Lumina for $470M

First Quantum Minerals (TSX:FM; LSE:FQM) has made a friendly $470 million takeover offer for Lumina Copper (TSXV: LCC), ending a sale process for the junior and its Taca Taca copper-gold-molybdenum project in Argentina’s Salta province.

Taca Taca is the last of the 10 large, undeveloped copper projects that Ross Beaty, Lumina’s founder and largest shareholder, gathered in the early 2000s, when copper prices were hovering around the US60¢ per lb mark. Beaty and his team planned to delineate promising resources on the projects and sell them for a premium to major mining companies when copper prices improved. By 2008, the Lumina group of companies sold all of the projects for a nice profit, except for Taca Taca, where it had halted exploration efforts until 2010, due to the recession.

In 2012, Lumina published an updated resource estimate for Taca Taca outlining a copper resource of 28 billion lb, and had identified 25 companies that had the capacity to develop the project and signed confidentiality agreements with them. Of those companies, 11, including First Quantum, conducted site visits and technical due diligence on the project, David Strang, Lumina’s CEO, said on a conference call. “We are seeing the First Quantum transaction today as being the best alternative for our shareholders.”

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