HARMONY Gold has extended its reach into copper production, unveiling today a $1.03bn (R18.4bn) bid for Australia’s MAC Copper, a New York-listed company which operates the 41,000-ton-a-year CSA copper mine in New South Wales.
Combined with the proposed 50,000 to 60,000 ton a year Eva Copper, an Australian project Harmony hopes to approve this year, the South African gold miner intends to produce up to 100,000 tons of copper concentrate annually within the next five years.
Unlike Eva Copper, however, MAC Copper’s CSA copper mine – located about 700km from Sydney in the Cobar region of New South Wales – was immediately cash flow positive, said Harmony. In 2024, the mine reported a 36% operating free cash flow margin on the back of $2.92/lb in all-in sustaining costs after by-product credits.
“CSA is one of the highest-grade copper mines in Australia,” said Beyers Nel, CEO of Harmony Gold, in a statement on Tuesday. He said the transaction represented “a significant step forward in transforming Harmony”.
CSA has a current reserve life of 12 years, has maintained a stable resource life for the last decade, and offers extension opportunities in the Merrin mine situated 150 metres underground, in the upper part of the CSA orebody.
CSA has similarities to the type of mine Harmony has operated in South Africa. It has been operating for 150 years – one of the oldest in Australia – and runs to 1.9km in depth. But it is high grade with an average reserve grade of 3.4% copper.
“Development of the Merrin Mine is underway, with first ore expected in the December quarter 2025,” said Harmony. “An inaugural zinc resource was announced in February 2025 with a reserve to follow, it added.
Harmony’s offer represents a 20.7% premium to MAC’s closing share price on 23 May of $10.15/share and a 32.1% premium to the firm’s 30-day VWAP of $9.28/share. MAC Copper traded up 1.8% in New York on Monday to close at the offer price.
About 22.5% of MAC Copper’s shareholders have thrown their weight behind the transaction. This support includes management owning 2.4%, and the board, who have recommended investors accept Harmony’s offer, in the absence of a higher bid. Shareholders will vote on the transaction in December.
Harmony said it would finance the transaction using a $1.25bn bridge facility and existing cash resources. As of end-March, the firm had net cash of R10.83bn and R20.85bn including undrawn facilities. If the proposed transaction succeeds, Harmony would have a net debt-to-Ebitda ratio of 0.5x based on its 2024 year-end.
MAC has cash and cash equivalents of $75m, but total net debt of $150m as of 31 March. It also has a host of obligations for which Harmony will take responsibility. These include a 1.5% net smelter return to Glencore’s Australian subsidiary and both a copper and silver purchase agreement with Osisko, a Canadian company.
In addition, MAC has contingent payments of $150m to Glencore. These are triggered if the copper price exceeds $4.25 per pound for an unbroken 18 months ($75m), and a further $75m is payable to Glencore if the copper price is $4.50/lb or more for two years.
Shares in Harmony Gold fell 5.5% in early Johannesburg trade trimming the stock’s year-to-date gains to 60%.
