Acquiring a top copper-gold mine in South America! Jiangxi Copper to purchase SolGold for over $1.1 billion

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After two rounds of increased offers, Jiangxi Copper has finally reached an agreement to successfully acquire Australian miner SolGold, which owns top copper-gold mines in South America, with the transaction value reaching up to $1.17 billion.

On Wednesday the 24th, during the US stock morning session, UK-listed SolGold announced that it has accepted a cash offer from its largest shareholder, Jiangxi Copper, of 28 pence per share for the remaining shares it does not own. This offer represents a 43% premium over SolGold’s share price the day before Jiangxi Copper first made its acquisition proposal in November.

SolGold stated that BHP and Newmont, both holding more than 10% stakes, have expressed support for the acquisition offer, as have other investors including Maxit Capital LP. Altogether, these shareholders own 40.7% of the company.

The acquisition will allow Jiangxi Copper to control the Cascabel project in Ecuador, which has one of the largest undeveloped copper-gold deposits in South America.

This deal comes at a time when global miners are racing to compete for copper assets. With demand rising due to investment in electric vehicles and artificial intelligence (AI) infrastructure, copper prices have hit record highs. The industry generally predicts a shortage of metal supply, and frequent M&A deals among major mining companies have occurred, including BHP’s attempt to acquire Anglo American.

SolGold Receives Three Offers in One Month, Stock Rises Over 30%

Jiangxi Copper is already SolGold’s largest shareholder, with a stake slightly above 12%. The transaction values SolGold at up to 867 million pounds, approximately $1.17 billion, including possible future share issuances.

This Wednesday’s announcement means that Jiangxi Copper has finally reached a deal after submitting three offers and significantly raising its price within the last month.

In a statement, Zhou Shaobing, Vice Chairman and General Manager of Jiangxi Copper, said the company is pleased to receive unanimous recommendation from SolGold’s board and strong support from other major shareholders, and is excited about the potential of the Cascabel project.

Wallstreetcn previously mentioned that Jiangxi Copper’s first non-binding takeover proposal on November 23 was rejected, and a second offer of 26 pence per share on November 28 was also turned down by the board. The latest 28 pence offer is a significant 7.7% increase over the previous one.

On the day the deal was announced, Wednesday, SolGold shares listed in London closed up about 0.6%, rebounding after three consecutive days of gains ended Tuesday. Based on Wednesday’s closing price of 25.65 pence, SolGold’s share price has surged about 30.9% in approximately five weeks since Jiangxi Copper first made its offer.

Jiangxi Copper Acquires Top South American Copper-Gold Resources, Production May Double

The Cascabel project is located in Imbabura Province, Ecuador. Its main Alpala deposit has proven, controlled, and inferred resources of 12.2 million tons of copper, 30.5 million ounces of gold, and 102.3 million ounces of silver. The project completed a pre-feasibility study in 2024, with early engineering planned to begin in 2026 and first production by 2028.

According to the pre-feasibility report, the mine is expected to operate for 28 years, with an average annual production of 123,000 tons of copper, 277,000 ounces of gold, and 794,000 ounces of silver. Peak phase copper annual production may exceed 216,000 tons. Besides the Cascabel project, SolGold also holds a large number of exploration licenses in Ecuador.

BHP and Newmont had previously shown interest in SolGold, but lost interest due to disputes over Cascabel mine financing and changes in project scope.

Jiangxi Copper's business covers China, Hong Kong, Peru, Kazakhstan, Zambia, and other regions.

After the acquisition, as the Cascabel project is developed and operated, Jiangxi Copper will gain a significant increase in resources. The company’s future copper production may double, which will significantly ease the issue of insufficient profitability in its cathode copper products and enhance its position in the industry.

Relevant data shows that over the past five years, the gross profit margin of Jiangxi Copper’s main product, cathode copper, has fluctuated between 3% and 4% for a long time, and in some years even fell below 3%. In 2024, Jiangxi Copper’s self-produced copper concentrate contained 199,700 tons of copper, and its cathode copper smelting capacity reached 2.3 million tons in the same year.

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