BHP Billiton Raises Stake in Copper Explorer SolGold
October 15 2018 - 5:46PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Billiton Ltd. (BHP.AU) said it will almost double
its stake in copper explorer SolGold PLC (SOLG.LN) as the world's
largest mining company seeks to boost its exposure to a metal used
in everything from smartphones and electric vehicles to air
conditioners.
BHP, which last month bought a roughly 6% interest in the
company that runs the Cascabel copper and gold project in Ecuador,
said on Tuesday it will raise its stake to a little over 11% via a
private placement under which SolGold will issue 100 million shares
to BHP.
"Ecuador is a highly prospective region for the next generation
of copper supply," BHP President Minerals Americas Danny Malchuk
said in a statement.
BHP and other global miners have been racing to increase bets on
copper amid expectations demand for electric vehicles and consumer
products in China will spark a boom in demand and prices for the
metal.
BHP said it will pay 45 pence per share--or 45 million pounds
(US$59 million) for the stake--which is a 32% premium to the 20-day
volume-weighted average on London's stock exchange. It is also
pricier than the 26.592 a share BHP spent last month to buy its
initial 103-million-share interest from Guyana Goldfields Inc.
Under the latest agreement, BHP has the right to nominate one
director to SolGold's board although has agreed not to acquire
further shares for two years without the company's consent.
"This additional investment in SolGold strengthens our strategic
position in the Cascabel copper exploration project, and is
consistent with BHP's strategy to replenish our copper resource
base and grow the business," said Mr. Malchuk.
SolGold in 2016 rejected an offer from BHP to invest in the
company and develop its flagship Cascabel project, instead picking
a competing investment by Australia-based Newcrest Mining Ltd.
(NCM.AU) and Maxit Capital LP.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
October 15, 2018 18:31 ET (22:31 GMT)
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