South32 to acquire Arizona Mining for $US1.3bn

Image: Arizona Mining

South32 is acquiring the 83 per cent it does not already own of US-focused Canadian zinc-lead-silver miner Arizona Mining for $US1.3 billion ($1.75 billion) via an all-cash offer.

Arizona Mining, which owns the Hermosa zinc project 80km southeast of Tucson, Arizona, is being acquired for $C6.20 per share, a 50 per cent premium on Arizona’s closing price as of June 15. The company’s directors have unanimously supported the deal and recommended that shareholders accept South32’s offer.

Graham Kerr, chief executive officer of South32 said the offer would allow the company to optimise the design and development of “one of the most exciting base metal projects in the industry”.

“We have been a major shareholder in Arizona Mining since May 2017 and an active participant in the Hermosa project with representation on the operations committee and a nominee on the board of directors,” he said.

“Our deep understanding of this high-grade resource and surrounding tenement package, and extensive experience at Cannington, makes us the natural owner of this project and ensures we are well positioned to bring it to development, delivering significant value to our shareholders.”

The Hermosa project’s Taylor deposit, a zinc, manganese and silver oxide-bearing greenfield development project, has a measured and indicated mineral resource of 101 million tonnes (Mt) at 10.4 per cent zinc equivalent. Subject to approval from shareholders, the deal between South32 and Arizona is expected to take place in September.

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