Filo Shareholders Greenlight Acquisition by BHP and Lundin Mining

Filo (TSX:FIL,OTCQX:FLMMF) shareholders have approved the acquisition of the company by BHP Investments Canada, a subsidiary of BHP (ASX:BHP,LSE:BHP,NYSE:BHP), and Lundin Mining (TSX:LUN,OTC Pink:LUNMF).

The approval, announced on September 26, follows a special meeting of shareholders.

The agreement will see BHP and Lundin Mining form a 50/50 joint venture that will include the Filo del Sol project, owned by Filo, and Lundin Mining’s Josemaria project. Both are located in Argentina near the Chilean border.

“Our copper-gold-silver exploration success at Filo has been unmatched since spinning the company out in 2016, and now is the right moment to hand the project off to its next stewards to maximize the potential of this remarkable discovery,” Filo President and CEO Jamie Beck said in a July press release when the transaction was announced.

The acquisition was overwhelmingly approved by Filo shareholders, with 99.99 percent voting in favor.

The arrangement is subject to various closing conditions, including regulatory approvals and a final order from the Ontario Superior Court of Justice, which is scheduled for October 2. If approved, the deal is expected to close in Q1 2025.

Filo shareholders will receive information on how to exchange their shares through a letter of transmittal, which will be mailed to registered shareholders and made available online.

Under the terms announced in July, BHP and Lundin Mining have agreed to pay Filo shareholders C$33 per share, either in cash or in a combination of cash and Lundin Mining shares. Total cash consideration will be capped at C$2.767 billion, while share consideration will be limited to 92.1 million Lundin Mining shares.

Filo, BHP and Lundin Mining have also entered into a subscription agreement for a private placement, where each purchasing party will subscribe for 3.48 million Filo shares at C$33 each, raising approximately C$115 million.

The integration of Filo del Sol and Josemaria is anticipated to strengthen BHP and Lundin Mining’s positions in the copper-gold sector and expand their operational footprint in Argentina.

The deal also benefits from recently passed Argentina legislation that supports projects entering the development phase.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.