ACG Acquisition is set to buy the Gediktepe mine in Turkey for $290 million, aiming to start copper and zinc production by 2026. The mine is currently owned by Lidya Madencilik, a subsidiary of the Turkish conglomerate Calik Holding. This move marks a significant step in ACG’s strategy to consolidate copper resources globally, reflecting the growing demand for copper driven by the energy transition.
Strategic Expansion and Funding
The deal includes funding for a $145 million expansion of the Gediktepe mine, targeting an annual production of up to 25,000 metric tons of copper equivalent. This transaction is a part of ACG’s broader strategy to secure key assets in the copper industry, which is increasingly vital for the global shift towards renewable energy and electric vehicles.
ACG, a blank-check firm also known as a special purpose acquisition company (SPAC), raises capital through an initial public offering (IPO) and later merges with private companies to take them public. In this case, the Calik subsidiary will receive a 30% stake in ACG and $100 million in cash. This strategic investment highlights ACG’s confidence in the long-term demand for copper and its commitment to enhancing its production capabilities.
Previously, ACG attempted a $1 billion deal to acquire nickel and copper mines in Brazil, which was terminated due to disagreements among the backers of the transaction, including a leading global miner and top automakers. This time, ACG has confirmed it has secured commitments for 100% of the necessary funding for the Gediktepe deal and the mine’s expansion.
The financing sources for this acquisition are diverse and substantial. They include $135 million in debt and equity from an unidentified mining private equity fund, up to $25 million in debt and equity from metals trader Traxys, and $60 million in equity from ACG’s co-sponsors and an unidentified European family office. Also, this robust financial backing underscores the confidence investors have in the project’s potential.
Historical Production and Future Outlook
In 2023, the Gediktepe mine produced 34,000 troy ounces of gold and 361,000 ounces of silver. This existing production of precious metals highlights the mine’s operational capabilities and its potential for significant copper and zinc output in the future. However, the planned expansion is expected to boost these figures substantially, aligning with ACG’s goal to become a leading player in the copper industry.
The acquisition of the Gediktepe mine is set to be completed by August 31. This timeline reflects ACG’s strategic urgency to capitalize on the growing copper demand driven by the global energy transition. Copper is a critical component in various applications, including renewable energy systems and electric vehicles, making this acquisition particularly timely and significant.
ACG’s move to secure and expand copper production at the Gediktepe mine positions the company advantageously in the market. This acquisition not only increases ACG’s production capacity but also enhances its strategic presence in the global copper market. By integrating this asset, ACG aims to ensure a stable and increasing supply of copper to meet the anticipated surge in demand.
Source: Mining.com
