Copper miner Equinox to buy Saudi-focused Citadel Resource for $1.26-bn

Equinox Minerals Ltd, owner of one of the world's largest copper mine, today said that is looking to expand its operations to the Middle East by proposing to acquire Australian base metals developer Citadel Resource Group Ltd, for $1.26-billion.

Melbourne-based Citadel is an emerging base metals producer, focused on gold and copper in Saudi Arabia. It is developing Saudi Arabia's biggest copper deposit, the Jabal Sayid copper and gold project, approximately 350kms north-east of Jeddah, which will produce on average 249,000t of copper concentrate.

The deposit is one of the lowest cost of capital per tonne of copper producing projects which is forecasted to have annual production of around 60,000 tonnes of copper over the first three years of the mine's estimated 10-year operating life starting in 2012.

Last month, Citadel, which owned 70-per cent of the project, had acquired full ownership by paying $112.5 million to acquire the remaining 30 per cent from Abdul Hadi Al Qahtani and Partners, Maritime and Oilfield Services and Dr Said Al Qahtani, the partners of the project.

In a cash-and-share deal, Canada, Australia-listed Equinox is offering one of its shares for every 14.3 Citadel shares plus A$0.105 in cash, valuing Citadel at $1.26-billion.

Post transaction, Equinox shareholders will own approximately 81 per cent of the combined group and Citadel shareholders will own 19 per cent.