06:38 AM EDT, 06/26/2024 (MT Newswires) -- Lundin Mining ( LUNMF ) on Wednesday said it is exercising its option to acquire an additional 19% stake in SCM Minera Lumina Copper Chile, which owns the Caserones copper-molybdenum mine in Chile, from JX Advanced Metals for $350 million.

The fee will be paid in cash and will bring Lundin Mining's ( LUNMF ) ownership to 70%.

Lundin Mining ( LUNMF ) and JX have agreed to amend certain aspects of the original shareholders agreement, which will allow Lundin Mining ( LUNMF ) to exercise the call option early and provide it with the rights to 70% of the distributions retroactively from Jan. 1, 2024.

Upon closing, Lumina Copper will declare a cash distribution estimated at about $150 million, of which 70% will be distributed to Lundin Mining ( LUNMF ) and 30% to JX.

Lundin Mining ( LUNMF ) is also entitled to an annual operator fee in the form of a preferred dividend. The parties have agreed to boost the preferred dividend to $28 million per year from $21 million, effective from the start of 2025.

Lundin Mining ( LUNMF ) will initially fund the $350 million purchase price from its revolving credit facility with the intention to refinance this amount by increasing an $800 million term loan to $1.15 billion. The company has received commitments from lenders for a $350 million accordion.

"Exercising our option early provides significant benefits to both parties: we secure additional copper production at an attractive acquisition price, while our partners receive an upfront payment and retain a meaningful 30% equity position in Caserones," said Lundin Mining ( LUNMF ) President and CEO Jack Lundin. "This strategic move underscores our commitment to disciplined, scalable copper growth."

The transaction is scheduled to close on July 2.

Lundin Mining ( LUNMF ) lost 2.5% on the TSX to $14.68 per share on Tuesday.