How Cobre Secured Majority Control of Sierra Atacama Copper Project in Chile

Strategic Acquisition in Chile’s Copper Heartland

Cobre Limited (ASX:CBE) has taken a decisive step to strengthen its foothold in the copper sector by executing definitive agreements that pave the way for majority ownership and operational control of the Sierra Atacama Copper Project in northern Chile. Through its wholly owned Chilean subsidiary, Sierra Cobre SpA, the company has formalised a staged acquisition plan with Minera Salar Blanco SpA (MSB), the current stakeholder in the project.

This move follows a binding term sheet announced in February 2026 but now superseded by a more comprehensive legal framework. The agreements allow Cobre Chile to initially acquire a 25% interest in the project companies, Sierra Atacama SpA and Bergbau Wagen SpA, with options to increase this stake to 45% and then to 56% by the end of the year. The total committed investment across these stages amounts to approximately US$38 million.

Operational Control and Governance Enhancements

Beyond the financial commitment, the transaction grants Cobre immediate operational control. The company will appoint the board chairperson, who holds a casting vote, and will manage day-to-day operations through its nominee. This governance structure ensures Cobre can steer the project’s business plan, budget, and strategic mine planning, providing a platform to unlock value and scale operations effectively.

Importantly, the agreements include customary dilution and funding provisions that protect Cobre’s interests and provide pathways to increase ownership beyond the initial 56%. These mechanisms include pro-rata funding rights and fair market value-based dilution formulas, which could see Cobre consolidate further if MSB or other shareholders do not participate in future funding rounds.

Financial and Strategic Implications

The transaction also involves acquiring related-party creditor interests held by MSB and its affiliate Vitoco at nominal cost, aligning equity and debt positions within the project companies. Approximately US$8 million of the initial subscription proceeds will be directed towards reducing outstanding supplier liabilities, with the remainder funding project development and working capital needs.

CEO Adam Wooldridge emphasised the significance of the deal, highlighting the increased equity stake, management control, and defined pathway to full ownership as key enablers for Cobre’s growth ambitions in the region. The company’s strategic positioning in the Antofagasta region, a globally significant copper mining hub, could enhance its profile and operational leverage in a market increasingly focused on copper’s role in energy transition technologies.

Looking Ahead

While the agreements mark a major milestone, completion remains subject to customary conditions including regulatory approvals and the absence of material adverse changes. The staged nature of the acquisition and embedded options provide flexibility but also introduce execution risks. Investors will be watching closely for regulatory green lights and any moves by Cobre to exercise its call option to increase ownership.