BHP to invest $79 million in Canadian copper junior Filo Mining Corp

BHP will invest around US$79 million for a 5% share in Canadian junior Filo Mining Corp, which is developing a copper-gold-silver project straddling the border between Argentina and Chile.

Vancouver-based Filo said on Monday it would issue 6.27 million common shares in a private placement to BHP at C$12.59 a piece, representing a 12% premium to the 20-day volume-weighted average trading price.

The private placement is set to go through on or before March 11, at which point BHP will own 5% of Filo and be granted certain participation and top-up rights, the companies said.

Filo said it plans to use the funds for further exploration and development of its Filo del Sol project, located on the Chilean side of the border with Argentina in the high Andes.

According to Lundin Mining, Filo Mining’s majority owner, the project is expected to be an operation of equal size or bigger than its Candelaria mine in Chile. Chairman Lukas Lundin has previously said that building Filo del Sol will cost between $4 billion and $5 billion.

Filo’s president and CEO Jamie Beck said BHP’s investment was a ‘significant endorsement’ of the company’s project, team and strategy.

Based on the latest figures released by the company, the Filo del Sol project will have an estimated after-tax value of around $1 billion, with an internal rate of return of 23%. It is expected to produce an annual average of 67,000 tonnes of copper, 159,000 ounces of gold and 8.65 million ounces of silver.