Lundin Mining and BHP Close Filo Acquisition, Launch Vicuña Joint Venture

Lundin Mining (TSX:LUN,OTC Pink:LUNMF) and BHP Canada, a subsidiary of BHP (ASX:BHP,NYSE:BHP,LSE:BHP) have finalized their US$4 billion joint acquisition of Filo, launching a 50/50 joint venture dubbed Vicuña.

The partnership consolidates the Filo del Sol and Josemaria projects within Argentina’s Vicuña District, positioning the region as a future hub for copper production at a time when global demand for the metal is set to rise.

Vicuña will operate independently, guided by a board with equal representation from Lundin Mining and BHP.

Leadership appointments include Jack Lundin, president and CEO of Lundin Mining, and Carlos Ramirez, vice president of the Vicuña joint venture for BHP, who will serve as the Vicuña board's chair. Dave Dicaire, previously executive vice president of the Josemaria project for Lundin Mining, has been named general manager.

According to a Wednesday (January 15) release, the joint venture will aim to leverage the geographic proximity of the two projects to streamline operations, reduce costs and enhance development opportunities.

To acquire Filo, Lundin Mining and BHP made cash payments and share allocations. Lundin Mining contributed C$877.8 million in cash, issued 94.1 million shares to Filo shareholders and included its pre-existing 1.7 percent stake.

For its part, BHP provided C$2 billion in cash and incorporated its 7 percent interest in Filo. BHP also paid Lundin Mining US$690 million in cash for a 50 percent stake in the Josemaria project.

The deal was approved by Filo shareholders in September 2024, with court approval obtained shortly afterward.

For 2025, the joint venture has allocated US$312 million toward development and exploration activities.

Drilling is currently happening at both Filo del Sol and the Cumbre Verde target, and is set to continue.

Filo del Sol drilling will be geared at resource growth, while at Cumbre Verde the joint venture will aim to follow up on results from last year, targeting the same mineralized system and structures.

The joint venture also wants to update the resource estimate for Josemaria, and in parallel will conduct engineering studies and trade-off analysis to inform a technical report examining an integrated project.

In conjunction with its efforts to advance Vicuña, Lundin Mining has been realigning its asset portfolio, recently announcing the sale of its European operations to Boliden (STO:BOL). This transaction, expected to close in mid-2025, will allow Lundin Mining to concentrate its efforts on strategic growth opportunities in the Americas.

BHP continues to expand its copper portfolio to capitalize on increasing global demand for critical minerals.

Globally, copper demand continues to grow due to its critical role in electrification and renewable energy infrastructure.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.