BHP Billiton today announced that it has reached agreement to sell its Peruvian Tintaya mine to Xstrata plc (“Xstrata”). The sale also includes the nearby undeveloped deposits of Antapaccay and Corrocohuayco.
Total consideration for the sale is US$750 million; this number comprises US$634 million for the shares plus the assumption of US$116 million of debt. In addition to this upfront payment, the sale includes a deferred payment component which will be determined shortly after completion and based on current price levels is expected to be in the order of US$60 million. The transaction is expected to be completed within two months with an effective date of 1 June 2006. Additional payments will be made by Xstrata to BHP Billiton in specified circumstances if the future LME copper price reaches certain levels between July 2008 and June 2009, or the development of Antapaccay or Corrocohuayco proceeds prior to 2020.
Mike Anglin, Chief Operating Officer Americas, BHP Billiton Base Metals said “In February 2006 we embarked on a process to realise value for Tintaya. We are pleased to announce today an agreement to sell Tintaya to Xstrata. We look forward to transitioning Tintaya, and our relationships at Tintaya, to Xstrata over the next two months.”
BHP Billiton will continue to maintain an active presence in Peru through its exploration activities and its 33.8% interest in Antamina.
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