Cobre (ASX:CBE) is moving towards a 62.86% controlling interest in the Sierra Atacama Copper Project in Chile, after receiving preference shares that will convert when it exercises a US$12 million ($16.74 million) control option.
Its wholly owned subsidiary Sierra Cobre has received its pro rata entitlement of convertible non-voting preference shares under a separate US$12 million capital raising by project company Sierra Atacama.
The preference shares do not yet confer voting control. Their conversion depends on Cobre exercising its option to acquire additional shares from Minera Salara Blanco in both Sierra Atacama and fellow project company Bergbau Wagen by 31 December 2026.
Upon exercise of the option and conversion of the preference shares, Cobre’s subsidiary will hold a 62.86% controlling interest in each company. The option price includes amounts paid to acquire certain related credits from the seller and its affiliates.
Executive Chairman Martin Holland says the increased interest would give shareholders greater exposure to the project’s production growth.
“With Sierra Atacama ramping up our annual production of copper cathode into 2027, majority ownership provides Cobre with greater exposure to the significant operating and cash-flow upside from this growth,” Holland says.
He also points to exploration opportunities that could add resources and extend the scale and life of operations.
Cobre announced amendments to the original subscription agreement on 7 July to implement the capital raising.
The company notes a further option provides a pathway to full ownership of the project companies by acquiring Minera Salara Blanco’s remaining shares, subject to the previously disclosed trigger conditions.
Cobre is a copper company with production and development activities in Chile and exploration projects in Botswana’s Kalahari Copper Belt.
Write to France Pinzon at Mining.com.au
Images: Cobre
