Sandfire to Pay $72.3 Million for Talisman’s Stake in Springfield

In a move two months in the works, Sandfire Resources has signed an agreement to buy out Talisman Mining’s stake in the Springfield joint venture in Western Australia.

Sandfire Resources (ASX:SFR) has signed a binding agreement to acquire Talisman Mining’s (ASX:TLM) 30-percent interest in the Springfield joint venture in Western Australia.

Through the plan, Sandfire will acquire the Talisman subsidiary that holds the Springfield interest. The purchase price tag comes in at $72.3 million on a debt-free, cash-free basis, along with an ongoing 1-percent net smelter return royalty on future discoveries at Springfield.

The acquisition plans were originally announced in June, but were met with multiple delays in July, most of which were based around fulfilling “key conditions” of the transaction. Sandfire will fund the acquisition from existing cash reserves, which stood at $243 million as of June 30.

The Springfield joint venture covers the Monty copper-gold deposit, which is currently being developed as a satellite underground mine to help feed Sandfire’s DeGrussa copper-gold mine. It also includes nearby exploration tenements that are adjacent to Sandfire’s Doolgunna project. The transaction encompasses Talisman’s 27-percent interest in the nearby Halloween West project as well.

After the acquisition, Sandfire will assume a 2.25-percent gross revenue royalty currently held by Taurus Mining Finance Fund, payable on 30 percent of the copper and gold produced from the Monty deposit.

Sandfire CEO Karl Simich expressed his happiness about the transaction in a statement, highlighting that the company has faith in the currently struggling copper market.

“We are pleased to be progressing this transaction to consolidate our interests in the Monty Project and surrounding tenement interests,” he said. “While copper prices have come down in recent weeks we remain committed to this acquisition and its value for shareholders of Sandfire and Talisman, and strongly believe in the building future strength in the copper market.”

The acquisition of Talisman’s interest in Springfield gives Sandfire full ownership over the asset, as the company previously held a 70-percent stake.

Sandfire’s share price closed at AU$7.65 at the end of trading on Wednesday (August 8), up 0.13 percent.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.

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