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Anglo American To Sell Addl 21.9% Stake In Quellaveco To Mitsubishi For $600 Mln

Anglo American Plc. (AAUKY.PK,AAL.L) announced Thursday that it has entered into a Heads of Agreement with Mitsubishi Corp. (MBC.L,MSBHY.PK) in relation to Mitsubishi's proposed acquisition of a 21.9% equity interest in Anglo American Quellaveco S.A. or AAQSA., for a total consideration of $600 million. The total consideration implies a valuation for 100% of Quellaveco of $2.74 billion.

Mitsubishi already holds an 18.1% interest in AAQSA, which owns the Quellaveco copper project in Peru. Following closing of the proposed transaction, Mitsubishi's interest will increase to 40%, while Anglo American will retain 60%.

Closing of the deal is expected in the third quarter, subject to a number of conditions, including required regulatory approvals, approval by Mitsubishi's Board, and approval to develop the Quellaveco project by Anglo American's Board.

The total consideration of $600 million is comprised of $500 million upon closing of the deal, $50 million upon total ore treatment rates at Quellaveco reaching at least 150 thousand tonnes per day; and $50 million upon total ore treatment rates at Quellaveco reaching at least 180 thousand tonnes per day.

The company said the consideration will be settled upon closing by way of a primary share subscription in AAQSA by MCQ Copper Ltd., a subsidiary of Mitsubishi, which will pre-fund a portion of Anglo American's share of the required capital expenditure for the development of Quellaveco.

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