(Alliance News) - Rio Tinto PLC on Tuesday said it has completed the agreement to sell a majority stake in the La Granja copper project in Peru to First Quantum Minerals Ltd, banking just over USD100 million and gaining a partner who will invest another half billion into the project.
La Granja, located high in the mountains in Cajamarca, northern Peru, is one of the largest undeveloped copper deposits in the world, Rio said. It has an indicated and inferred mineral resource totalling 4.32 billion tonnes at 0.51% copper. First Quantum will become the operator of the mine.
The agreement to sell a 55% stake in La Granja to First Quantum was first announced back in March. Rio on Tuesday said the completion follows regulatory approvals from the government of Peru, from which the Anglo-Australian miner had purchased the project back in 2006.
First Quantum will pay USD105 million for the project stake, and it will invest up to a further USD546 million into the joint venture to sole fund capital and operational costs to take the project through a feasibility study and toward development. Once this sole funding commitment is completed, all subsequent spending will be shared according to the 55%-45% ownership.
Rio Tinto shares were up 1.6% at 4,820.32 pence in London early Tuesday. First Quantum closed up 3.1% at CAD34.41 in Toronto on Monday.
By Tom Waite, Alliance News editor
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