Korean giant takes stake in Sandfire

SOUTH Korean copper smelting giant LS-Nikko Copper will take a 12.5 per cent stake in minerals explorer Sandfire Resources via a $93.9 million share placement.

The funds will be used to further explore Sandfire’s DeGrussa Copper-Gold Project.

LS-Nikko will be Sandfire’s third largest shareholder behind Korea’s POSCO and Australian copper miner OZ Minerals.

Its investment comes shortly after OZ acquired a 19.9 per cent shareholding in Sandfire, which made one of the most spectacular mineral discoveries in Australia in recent years.

The LS-Nikko investment will dilute OZ’s stake and could block any aspirations OZ had to move to full ownership.

LS-Nikko is the world’s third largest copper smelter and will acquire the stake in Sandfire through the issue of 18.7 million shares at $5.02 per share.

It is 50.1 per cent owned by the giant Korean industrial conglomerate, LS Corp, and 49.9 per cent owned by a Japanese consortium including JX Nippon Mining & Metals Corporation, which owns the fourth largest copper smelter in the world, Marubeni Corporation and Mitsui Mining and Smelting Co. Ltd.

“We are delighted to have secured this landmark agreement with LS-Nikko, which represents an outstanding outcome for Sandfire shareholders,” Sandfire managing director Karl Simich said.

“This is the second strategic alliance we have secured with a major global downstream partner and is consistent with our business model of developing strategic relationships that enable us to maximise the value of our resource assets.

“The additional funds being injected by LS-Nikko will boost our cash reserves to over $145 million, putting Sandfire in a fantastic position to accelerate the exploration and development of DeGrussa and our other projects, which the board believes will unlock substantial value for our shareholders.”

LS-Nikko executive vice-president Seung-Jae Chyun

said the investment in Sandfire represented the company’s first entry into the Australian mining industry.

“We believe that the DeGrussa Project is unique and offers very exciting growth potential,” he said.