TORONTO (miningweekly.com) – Base-metals miner Lundin Mining on Wednesday announced that it has entered into a definitive agreement to buy global mining major Rio Tinto’s high-grade Eagle nickel/copper underground mine, in northern Michigan for about $325-million.
Lundin CEO Paul Conibear said the acquisition “fitted ideally” within Lundin's asset base and was the result of the disciplined approach the company had been focused on for some time to acquire high-quality, advanced-stage assets in low-risk, mining oriented jurisdictions.
“The Eagle mine represents a very unique opportunity to acquire a high-grade project which is under construction and expected to begin generating significant levels of metal production and cash flow prior to the end of next year. Northern Michigan has an outstanding iron-ore, gold and base metals mining history and consequently excellent regional power, road and rail infrastructure, with extensive mining expertise within local communities to support and staff the Eagle mine,” Conibear said.
The Eagle Mine is located in Marquette County in the Upper Peninsula of Michigan. Project construction was slightly more than halfway complete, and first production was expected in the fourth quarter of 2014.
Yearly production over the first three full years, from 2015 to 2017 was expected to average about 23 000 t of nickel and 20 000 t of copper a year, with additional by-product credits of precious metals and cobalt. Lundin said that as a result of the high nickel grades and strong by-product credits, Cash costs for the first three years were expected to average about $2/lb nickel, thereby positioning the asset in the lowest quartile of the nickel producer cost curve.