Acquiring the top copper and gold mine in South America! JIANGXI COPPER will acquire SolGold for over 1.1 billion USD

After two price increases, Jiangxi Copper has finally reached an agreement to successfully acquire the Australian miner SolGold, which owns a top copper-gold mine in South America, with a transaction value of up to $1.17 billion.

On Wednesday morning, Eastern Time on the 24th, the UK-listed SolGold announced that it had accepted Jiangxi Copper's offer to acquire its unheld shares at a cash price of 28 pence per share. This offer represents a 43% premium over SolGold's share price the day before Jiangxi Copper's initial acquisition proposal in November.

SolGold stated that major shareholders BHP and Newmont, each holding over 10%, have expressed support for this acquisition proposal, along with other investors such as Maxit Capital LP. These shareholders collectively hold 40.7% of the shares.

The acquisition will allow Jiangxi Copper to control the Cascabel project located in Ecuador, which has one of the largest undeveloped copper-gold deposits in South America.

This transaction comes as global miners compete for copper assets. With rising demand driven by electric vehicles and artificial intelligence (AI) infrastructure investments, copper prices have reached historical highs, and there is widespread industry expectation of a metal supply shortage, leading to frequent mergers and acquisitions among major mining companies, including BHP's attempted acquisition of Anglo American.

SolGold Receives Three Offers in a Month, Share Price Rises Over 30%

Jiangxi Copper is already SolGold's largest shareholder, holding just over 12%. This transaction values SolGold at up to £867 million, approximately $1.17 billion, including shares that may be issued in the future.

Wednesday's announcement means that after three offers and significant price increases in the past month, Jiangxi Copper has finally reached a deal.

Zhou Shaobing, Vice Chairman and General Manager of Jiangxi Copper, stated in a statement that the company is pleased to receive unanimous recommendations from SolGold's board and strong support from other major shareholders, and is excited about the potential of the Cascabel project.

Wallstreetcn previously mentioned that after Jiangxi Copper's initial non-binding acquisition proposal was rejected on November 23, it made another offer of 26 pence per share on November 28, which was also rejected by the board. The latest offer of 28 pence represents a significant increase of 7.7% over the previous offer.

On the day the agreement with Jiangxi Copper was announced, SolGold's shares listed in London rose about 0.6%, rebounding after a three-day winning streak ended on Tuesday. At Wednesday's closing price of 25.65 pence, SolGold's share price has increased by approximately 30.9% over the five weeks since Jiangxi Copper first made its offer.

Jiangxi Copper Acquires Top Copper-Gold Resources in South America, Capacity May Double

The Cascabel project is located in the Imbabura province of Ecuador, and its main Alpala deposit has proven, controlled, and inferred resources of 12.2 million tons of copper, 30.5 million ounces of gold, and 10,230 million ounces of silver The project completed its pre-feasibility study in 2024, with plans to start early engineering in 2026 and achieve initial production in 2028.

According to the pre-feasibility report, the mine is expected to have an operational cycle of 28 years, with an average annual copper production of 123,000 tons, gold production of 277,000 ounces, and silver production of 794,000 ounces. During the peak production phase, the annual copper output is expected to exceed 216,000 tons. In addition to the Cascabel project, SolGold also holds a large number of exploration licenses in Ecuador.

BHP and Newmont had previously expressed interest in SolGold but lost interest due to financing disputes over the Cascabel mine and changes in project scope.

Jiangxi Copper's business footprint spans China, Hong Kong, as well as regions such as Peru, Kazakhstan, and Zambia.

After a successful acquisition, with the development and operation of the Cascabel project starting, Jiangxi Copper will see a significant increase in resources. The company's long-term copper production may double, which will significantly alleviate the issue of insufficient profitability of its cathode copper products and enhance its position in the industry.

Relevant data shows that over the past five years, the gross profit margin of Jiangxi Copper's main product, cathode copper, has fluctuated between 3% and 4%, with some years even falling below 3%. In 2024, Jiangxi Copper's self-produced copper concentrate is expected to contain 199,700 tons of copper, and in the same year, the company's cathode copper smelting capacity will reach 2.3 million tons