Kaz Minerals to buy Russia copper, gold project for $900m

KAZ Minerals on Thursday said it had agreed to acquire the Baimskaya copper project in the Chukotka region of Russia for $900m (£687m) in cash and shares.

Kaz said Baimskaya is one of the world's most “significant undeveloped copper assets with the potential to become a large scale, low cost, open pit copper mine”.

The site has sources of 9.5m tonnes of copper at an average grade of 0.43% and 16.5m oz of gold at an average grade of 0.23 grammes per tonne, it added.

Average annual production over the first 10 years of operations were expected to be 250 kt of copper and 400 koz of gold, or 330 kt Copper Equivalent Production1, with a mine life of approximately 25 years.

The initial payment is $675m for a 75% interest in the project made up of

$436m in cash and 22.3m new KAZ shares to be issued to valued at $239m and subject to a three-year lock-in agreement.

The second payment will be $225m in cash or shares for the remaining 25% interest.