Cobre Ltd. has secured full ownership of the Sierra Atacama copper project in northern Chile, a deal that will move the company from explorer to producer.
The binding agreement, signed by Cobre’s Chilean subsidiary, Sierra Cobre SpA, formalises the deal with Minera Salar Blanco SpA (MSB).
This final framework improves upon the previous term sheet announced in February, increasing Cobre’s initial acquisition potential to a 56 per cent interest, up from the previously flagged 51 per cent.
Under the terms of the deal, Cobre will undertake a staged acquisition. Cobre will subscribe to an initial 25 per cent of the project companies with subsequent subscription to increase to 45 per cent for an aggregate consideration of US$28 million.
There will also be an option exercisable until December 31 to increase the holding to 56 per cent for an additional US$10 million.
The agreement includes specific put/call and dilution mechanics that provide Cobre with a legal framework to acquire MSB’s remaining interest, potentially moving to 100 per cent ownership over time.
More importantly, Cobre has secured immediate operational control. The company will appoint the board chair with a casting vote and act as the project manager, overseeing the business plan, budget, and strategic mine plan for the Antofagasta-based asset.
The Sierra Atacama Project currently operates as an underground mine producing approximately 400 tonnes of copper cathode per month. However, Cobre intends to leverage existing infrastructure, including a functional SX-EW plant, to scale production significantly.
“The final structure delivers increased equity, management control, and a defined pathway to further consolidate ownership, providing a strong platform to scale the operation and unlock value,” said Adam Wooldridge, CEO of Cobre.
