On December 1, 2015, Antofagasta plc (Antofagasta) acquired from Barrick Gold Corporation (Barrick) a 50 per cent interest (the Acquisition) in Compañia Minera Zaldívar Limitada (Zaldívar) that holds the Zaldívar copper mine located in northern Chile (the Zaldívar Mine). The resulting joint venture combines the resources and expertise of two global mining leaders to maximize the value of the Zaldívar Mine.
The definitive agreement (the Definitive Agreement) entered into by the parties on July 30, 2015, was reached after Antofagasta won a competitive, blind, multi-stage bidding process that commenced on April 23, 2015, for such 50 per cent interest against numerous other contenders that included other multinational diversified copper producers.
Total consideration for the Acquisition was approximately US$1.005 billion in cash (including customary closing adjustments). Pursuant to the Definitive Agreement, Antofagasta paid Barrick US$980 million upon closing of the Acquisition, and will make five subsequent annual payments of US$5 million per year, starting in 2016.
The Zaldívar Mine is an open-pit, heap-leach copper mine – located approximately 1,400 kilometres north of Santiago and 175 kilometres southeast of the port city of Antofagasta – which produces pure cathode copper. In 2014, the Zaldívar Mine produced 222 million pounds of copper, at cash costs ranging from US$1.79 to US$1.94 per pound, for income of US$224 million before taxes. As at December 31, 2014, the Zaldívar Mine contained 5.558 billion pounds of proven and probable copper reserves. This translates to an estimated 14-year mine life at current production levels, with further upside potential through exploration. Upon closing of the Acquisition, Barrick and Antofagasta will each have a 50 per cent shareholder interest in the Zaldívar Mine.
The deal team from Antofagasta comprised Ivan Arriagada (CEO – Antofagasta Minerals), Andronico Luksic (Vice President – Business Development), Patricio Enei (Vice-President of Legal), Juan Andres Morel (Head of Business Development), Hector Flores (Head of Business Evaluation), Pablo Klein (Senior Business Advisor), Rodrigo Berrera (Senior Business Advisor), Darin Smith (International Mineral Strategic Advisor), Daniel Altikes (Executive Director), Julian Anderson (Legal Manager and Company Assistant) and Kuno Kafka (Senior Counsel).
Cassels Brock & Blackwell LLP represented Antofagasta in Canada with a team comprising Darrell Podowski, Paul Stein, Brian Dominique, Cathy Mercer, Deepak Gill, Andrew Spencer, Caroline Durran, Ann Watterworth (mining, securities and M&A) and Ken Snider (tax).
Bofill Mir & Alvarez Jana Abogados represented Antofagasta in Chile with a team comprising Pablo Mir, Maria Ignacia Castro, Heleny Caratazos, Alina Bendersky, Esteban Fresno, Blanca Oddo, Cristian Franetovic, Maria Paz Cerda, Guillermo Fonseca, Jorge Valenzuela, Pablo Gutierrez and Felipe Davanzo.
Barrick Gold was represented by an internal legal team of Rich Haddock (Senior Vice President and General Counsel) and Andrew Hastings (Vice President and Senior Counsel). Davies Ward Phillips & Vineberg LLP represented Barrick Gold with a team comprising Melanie Shishler, Jennifer Grossklaus, Joshua Kuretzky, Yuki Shirato (mining, securities and M&A), John Bodrug, Jim Dinning (antitrust), Sarah Powell (environmental) and Geoffrey Turner (tax).
Carey y Cía Ltda. represented Barrick Gold in Chile with a team led by Francisco Ugarte and Jorge Ugarte (corporate).