Cobre Raises $60M to Acquire Majority Stake in Sierra Atacama Copper Project
Cobre Limited has secured A$60 million to acquire a majority stake in the Sierra Atacama Copper Project in Chile, positioning itself as a significant copper producer with strong expansion potential.
- A$60 million placement to fund acquisition of up to 51% interest in Sierra Atacama project
- Operating underground mine producing ~400t copper cathode monthly, with expansion plans
- Potential for large-scale open-pit mining and resource growth through exploration
- Experienced mining executive Phil Mitchell appointed as board advisor
- Performance rights proposed for directors and key contractors, pending shareholder approval
A Strategic Leap into Chile’s Copper Belt
Cobre Limited (ASX – CBE) has taken a decisive step to elevate its profile in the copper mining sector by announcing a binding agreement to acquire up to a 51% interest in the Sierra Atacama Copper Project, located in the prolific Antofagasta region of northern Chile. This acquisition is underpinned by a successful capital raising of approximately A$60 million, which will fund the earn-in and subsequent development activities.
The Sierra Atacama project spans roughly 40,000 hectares and includes an operating underground mine currently producing around 400 tonnes of copper cathode per month. Cobre’s management sees significant upside, with plans to optimise and expand production to over 1,000 tonnes per month, alongside the development of large-scale open-pit mining operations.
Transforming Production and Growth Prospects
This acquisition marks a transformational pivot for Cobre, transitioning from an explorer-developer to a material copper producer. The project benefits from substantial existing infrastructure, including underground workings, a crushing circuit, and a solvent extraction-electrowinning (SX-EW) plant with installed capacity exceeding current production levels. The company intends to leverage these assets to rapidly scale operations over the next 18 months.
Exploration potential remains robust, with the project adjacent to major copper deposits such as the Marimaca and Mantos Blancos projects. Historical drilling data, comprising over 140 kilometres of drilling and channel samples, supports the potential for resource expansion both laterally and at depth. Cobre plans a comprehensive drilling program to validate and upgrade the resource to JORC-compliant standards, a critical step for future development and investor confidence.
Strong Institutional Support and Expert Guidance
The recent placement attracted strong demand from both existing and new institutional investors, with Tribeca Investment Partners cornerstoning the raise with a $15 million commitment. This institutional endorsement underscores market confidence in the strategic direction and potential of the Sierra Atacama project.
Adding to the company’s expertise, seasoned mining executive Phil Mitchell has joined as a board advisor. Mitchell brings extensive experience in mining mergers and acquisitions, having held senior roles at Rio Tinto and Anglo American, and led acquisitions for High Power Exploration. His guidance is expected to be instrumental as Cobre advances its growth strategy.
Looking Ahead – Validation and Expansion
Cobre’s immediate focus will be on optimising the current underground operation, expanding open-pit mining, and initiating a rigorous exploration program to unlock further resource potential. The company also plans to address certain onerous contracts and restructure existing debt to streamline operations.
While the current resource and reserve estimates are based on Canadian NI 43-101 standards and are not yet JORC compliant, Cobre is undertaking validation work to convert these to JORC standards, which will provide greater transparency and reliability for investors.
Bottom Line?
Cobre’s bold acquisition and capital raise set the stage for a new chapter as it aims to become a leading copper producer in a world-class mining region.
Questions in the middle?
- How will upcoming drilling results impact the resource upgrade and project valuation?
- What are the timelines and risks associated with converting NI 43-101 estimates to JORC compliance?
- How will Cobre balance expansion in Chile with its existing assets in Botswana?
