South African company Harmony Gold is set to acquire MAC Copper, owner of the CSA copper mine in New South Wales, for approximately $US1.03 billion ($1.6 billion).
Under the terms of the binding scheme implementation deed, MAC shareholders will receive $US12.25 per MAC share.
MAC was the largest ASX mining listing in five years back in February 2024, giving the company a dual listing on the ASX and New York Stock Exchange (NYSE).
The scheme consideration represents a 32.1 per cent premium to the 30-day volume weighted average price (VWAP) of $US9.28 per MAC share trading on the New York Stock Exchange (NYSE) up to and including May 23, as well as 20.7 per cent to the last closing share price of $US10.15 per MAC share trading on the NYSE on May 23.
MAC officially acquired CSA from Glencore in June 2023 for $US1.1 billion. Situated 11km northwest of Cobar, CSA is considered to be one of Australia’s highest grade copper mines.
If the scheme is successful, Harmony will add another leading Australian copper asset to its portfolio, joining the Eva copper project near Cloncurry, Queensland.
Eva is an iron oxide copper-gold resource that Harmony believes is poised to become the largest copper mine in north-west Queensland.
Harmony said acquiring CSA aligns with its “strategic objective of transitioning into a low-cost, global gold and copper mining company through disciplined and effective capital allocation”.
“The acquisition of the CSA copper mine in Australia is significant as it introduces a high-quality, established underground producing copper asset to the Harmony portfolio,” Harmony chief executive officer (CEO) Beyers Nel said.
“CSA is one of the highest-grade copper mines in Australia, producing (approximately) 41,000 tonnes of copper in 2024. The operation is a logical fit with the portfolio given it meets Harmony’s core investment criteria, including increasing free cash flow generation while improving margins at long-term expected commodity prices.
“We believe that Harmony is well positioned to leverage its expertise in underground mining to further enhance operations.”
The MAC board has unanimously recommended its shareholders vote in favour of the scheme, in the absence of a superior proposal, as it is subject to limited conditionality, providing MAC shareholders with greater certainty.
“The board believes the transaction provides MAC shareholders with a compelling opportunity to de-risk their investment and realise an attractive cash value of $US12.25 per MAC share, which is also a premium to MAC’s recent historical trading levels,” MAC CEO Mick McMullen said.
“The transaction also presents a great outcome for other stakeholders in the CSA copper mine, who will benefit from the stewardship of a well-respected and high-quality operator in Harmony, who is looking to build a copper business in Australia … The board is confident that Harmony will deliver positive outcomes not only at the mine, but also for the wider Cobar community.”
The scheme isn’t subject to any financing or due diligence conditions but is subject to being sanctioned by the Royal Court of Jersey, receiving approval from MAC shareholders, Australia’s Foreign Investment Review Board and the South African Reserve Bank, and obtaining relevant approvals, amendments, exemptions or waivers from Osisko and Glencore – both of whom MAC has existing contracts with.
If the transaction is approved by MAC shareholders, the scheme is expected to be implemented in the fourth quarter of 2025.
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