HARMONY Gold on Friday announced it had concluded the $1.01bn accquisition of MAC Copper, a New York-listed company which operates the 41,000-ton-a-year CSA copper mine in Australia’s New South Wales.
The transaction is a scheme of arrangement in which Harmony has bought MAC shares at a price of US$12.25 per share. The final consideration is a shade below the $1.04bn price tag when the deal was first announced in May.
This acquisition has been funded using cash reserves together with a $1.25bn bridge facility rather than with shares.
Integration of the CSA mine into Harmony would now begin, the company said. The deal marked “a significant milestone” for the group as it sought to become “a global gold and copper producer”, said Beyers Naude, CEO of Harmony in a statement.
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.
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.
Details of how Harmony intended to progress the CSA mine, including the construction of a ventilation shaft and the upper part of the orebody, the Merrin development, and other exploration would be unveiled when Harmony published its interim numbers in February or March, the company said.
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 previously. 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.
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.
