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Cobre (ASX: CBE) has secured majority ownership and board control of the producing Sierra Atacama copper project in Chile, positioning the company to pursue a staged expansion that could ultimately lift copper cathode capacity to 50,000 tonnes per annum.
The company has increased its ownership to 62.86 per cent after exercising a control option for approximately $US12 million ($17.16 million), payable to project partner Minera Salar Blanco (MSB).
The transaction gives Cobre economic and governance control of Sierra Atacama, with its representation on the project’s board increasing to three of five directors.
For investors, the acquisition represents a significant change in Cobre’s position, giving the ASX-listed company greater control over capital allocation, development decisions and future production growth at an operating copper asset.
Cobre executive chairman Martin Holland said the transaction marked an important milestone in the company’s strategy.
“This is the moment Cobre has been building towards. We now hold a controlling economic interest and governance position in a Tier-1 copper asset at a time of strong copper market fundamentals,” Holland said.
“Consolidating control positions us to advance the planned mine expansion, broaden our exploration programme and pursue operational improvements to unlock the project’s full potential.”
The acquisition comes as Cobre advances a staged expansion strategy designed to leverage Sierra Atacama’s existing processing infrastructure.
The company has outlined a fully funded, modular expansion pathway targeting an initial increase in copper cathode capacity to approximately 18,000 tonnes per annum (tpa), followed by 25,000tpa.
A longer-term development scenario could potentially increase production capacity to 50,000tpa, subject to further drilling, resource modelling and mine planning.
The first stage involves refurbishing and upgrading the operating solvent extraction circuit and recommissioning a currently unused second electrowinning bay.
This would restore and optimise existing processing capacity to approximately 18,000tpa without requiring an entirely new processing facility.
The second stage would involve recommissioning the unused second solvent extraction line and constructing an additional electrowinning bay, potentially increasing capacity to 25,000tpa.
Cobre said the modular approach offered an accelerated and capital-efficient pathway to growth through refurbishment of existing infrastructure and selective processing additions.
The larger 50,000tpa development case will be evaluated following completion of the company’s ongoing 40,000m drilling program, updated mineral resource modelling and expanded open-pit mine design.
Exploration and development of satellite open pits will also form part of the project’s next growth phase.
The increased ownership gives Cobre a majority economic interest in any future production growth, while board control strengthens its ability to determine the timing and scale of expansion expenditure.
However, the investment case will increasingly depend on the economics of the proposed expansions, the capital required to deliver additional capacity and the project’s ability to generate cash flow.
With control of Sierra Atacama secured and a staged expansion pathway outlined, investor attention now shifts to how quickly Cobre can translate its larger ownership position and existing infrastructure into increased copper production.
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