The Korea Resources Corporation also known as KORES has set up a consortium to help it acquire the Far West mining company. The South Korean state run company will be buying the Canadian copper miner, which is based in Vancouver, British Columbia, for approximately US $700 million.
The consortium consists of KORES and Capstone Mining of Canada. KORES has invested $400 million in the deal while Capstone has brought in the rest of the investment as per Darren Pylot, chief executive with Capstone. The deal sees KORES acquiring an overseas resource developer for the first time. The offer values the shares at Canadian $8.68 each, but it is a share cum cash deal with shares in Capstone being offered to Far West shareholders.
The Far West mining company owns three mines located in Chile and Australia. Its recent conclusion of exploration at the Santo Domingo mine in Chile has shown estimates of 540 million tons of copper. They hope to get permission to begin mining operations at the mine soon. The annual production from the mine in Chile is likely to be in the range of 75,000 tons of copper. Of this Kores holds the right to sell half of the output from the mine.
According to Mr Pylot The Santo Domingo project was too large, there was too much risk for their shareholders without a financial partner. So They’re looking at Kores as a large financial partner, which gives them what they need, and they’re entitled to half the copper and iron concentrate, which is what they were interested in, so they both get what they want out of it.