Zaldivar mine deal hits Antofagasta shares, bodes well for Anglo

Fri Jul 31, 2015 8:28am EDT
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* Nomura had valued Zaldivar stake at $600 mln

* Deal to increase Antofagasta output by almost 10 pct

* Antofagasta shares down 5 percent to 6-year low

By Silvia Antonioli

LONDON, July 31 (Reuters) - Barrick Gold Corp's sale of half of its Zaldivar copper mine in Chile to Antofagasta for what analysts say is a pricey $1 billion hit Antofagasta's shares on Friday, but could help Anglo American in its own copper assets sale.

Shares in Antofagasta fell by almost 5 percent on Friday to their lowest in six years, after the announcement late on Thursday that the Chilean copper mining firm had agreed to buy 50 percent of Zaldivar for $1 billion in cash.

Analysts put the fall down to what they see as an expensive price for a mine with a relatively short life of 14 years.

The price assumes significantly higher copper prices or operational improvements at Zaldivar, according to Jefferies.

Copper has lost almost half of its value since its 2011 highs of around $10,000 a tonne but it remains one of the metals with the more positive fundamentals due to supply constraints.   Continued...