South32 Limited (LON:S32) is to buy the outstanding 83% stake in Arizona Mining it does not already own for US$1.3bn in cash
The Australia-based miner – spun-out from BHP Billiton plc (LON:BLT) in 2015 – said the offer price of C$6.20 per share represents a 50% premium to Arizona's closing price in Toronto on Friday and gives a total equity value to the firm of US$1.6bn.
READ: BHP Billiton and South32 get out of Citi's doghouse
Arizona Mining owns the multi-resource Hermosa project in the US state of Arizona, including the Taylor deposit which holds a reported resource of 101mln short tonnes of ore at a grade of 10% zinc.
In a statement, South32 chief executive Graham Kerr said: "Our all cash offer for Arizona Mining will allow us to optimise the design and development of one of the most exciting base metal projects in the industry.”
He added: "Our deep understanding of this high grade resource and surrounding tenement package, and extensive experience at Cannington, makes us the natural owner of this project and ensures we are well positioned to bring it to development, delivering significant value to our shareholders."
In early morning trading, South32 shares were 0.9% higher at 213.4p.