Josemaria shareholders may elect to receive 0.1487 of a Lundin Mining share for each share held or $1.60 cash to a maximum cash consideration of about $183 million and 39.7 million Lundin Mining shares, equating to 30% in cash and 70% in stock.

"Josemaria is a world-class copper-gold project that has many characteristics which makes it the ideal project, at the right time, for Lundin Mining to advance in the next phase of our growth. … The addition of Josemaria will elevate Lundin Mining's position to a major base metals producer with high-quality, low-cost copper exposure,2 said Lundin Mining president and CEO Peter Rockandel.

Josemaria will provide Lundin with a large-scale copper-gold growth deposit to complement its existing portfolio of long-life base metals mines in South America. Lundin owns the Candelaria mine in Chile and Chapada mine in Brazil. Once in production, Josemaria is expected to produce 130,000 tonnes per year of copper, 225,000 ounces of gold and 1Moz of silver over a 19-year mine life. This growth would increase Lundin's copper production by nearly 50% and gold production over 140%. Josemaria has reserves of 6.7 billion pounds of copper, 7Moz of gold and 30.7Moz silver.

Josemaria has been advancing the feasibility-stage project through environmental approvals and negotiating commercial and fiscal terms with the San Juan and Federal authorities. Josemaria Resources anticipates these will be finalised in 2022 and has outlined a project timeline of about five years to commercial production.

Lundin will finance the cash component via existing liquidity, which at the end of the September quarter was nearly US$430 million with US$780 million available for drawdown on its credit facility. It expects to maintain its dividend payments throughout the development of Josemaria.

The Josemaria deposit is a porphyry copper-gold system which measures about 1,500m by 1,000m and 600 to 700m vertically, within a larger alteration footprint of up to 4km by 2km. It is to be developed as a large-scale open-pit with a low strip ratio of 0.98 with electrically powered hydraulic shovels in combination with ultra-class 360-tonne haul trucks. Mineral processing is to consist of a conventional crush, grind and flotation flowsheet producing a gold-rich copper concentrate.

Earlier this month the Lundin Group recent pitched the Vicuña copper district in Argentina as one of the world's foremost undeveloped copper districts as it offers the rare blend of scale, deposit clusters and ore structures from big, long-life faults. The Group has ownership stakes in junior explorers Filo Mining (34%), Josemaria Resources (39%) and NGEx Minerals (35.7%).

During a Mining Journal interview two weeks ago with Josemaria Resource president and CEO Adam Lundin, he said, "Lundin Mining has been great at buying assets and this is a district that any copper producer should be interested in."

Shares in Lundin Mining are trading at $10.67,valuing the company at $7.8 billion.