Sandfire Resources swamped on raising for MATSA mining complex acquisition in Spain

Sandfire Resources is understood to have been swamped with demand for a $1.25 billion equity raising to help fund the acquisition of an operating copper-zinc mine in Spain despite mixed reaction to the deal from analysts (reports The West Australian).
30th September 2021

The Karl Simich-led company said it would spend $2.6b acquiring the MATSA mining complex near Seville from Swiss commodities trader Trafigura and Abu Dhabi state investment company Mubadala Investment Company, describing the deal as transformative.

It said the purchase would be funded via a combination of $US650 million in debt, a $US905m equity raising priced at $5.40, existing cash reserves of $US215m and the drawdown of a $US145m corporate debt facility.

The West Australian understands the raising was yesterday already two times oversubscribed with investor interest from Australian institutional and high-net worth individuals alone.

Investors are believed to be impressed with the scale of the acquisition which will more than double Sandfire’s production profile to nearly 200,000 tonnes of copper equivalent a year and offer exposure to a long-life (12-year) asset in a commodity that has a bullish medium to long-term outlook.

MATSA comprises three underground mining operations feeding a 4.7 million tonne-a-year central processing facility with modern infrastructure producing 100,000-120,000t of copper equivalent a year.

Crucially for Sandfire, the purchase means it will avoid a looming gap in its production profile with its flagship DeGrussa mine set to exhaust next year before it can bring its new Motheo project in Botswana online.

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