The Australian mining giant,
BHP Billiton Ltd.
) announced the divestiture of its interests in Pinto Valley Mine
and the associated San Manuel Arizona Railroad Company to the
Canadian Mining company, Capstone Mining Corp. The sale,
announced on Apr 29, is valued at US$650.0 million, payable in
BHP Billiton owned Pinto Valley Mine is located about 125
kilometers east of Phoenix, in the Globe-Miami mining district in
Arizona. The divestiture, subject to regulatory approvals, is
expected to close in the second half of calendar year 2013.
Capstone will assume all the environmental obligations related
to the mine. All the employees of Pinto Valley Mine will continue
working as employees of Capstone. Subsequent to the divestiture,
Pinto Valley will become the third operational copper mine for
Capstone after Cozamin copper-silver-zinc-lead mine in Mexico and
Minto copper-gold-silver mine in Canada.
The Pinto Valley Mine operations have been undergoing a
volatile situation in its life time. After the start of its
production in 1974, the operations of the mine were halted in
1998, due to reduced copper prices. The mining activities were
resumed in 2007, only to be halted again in 2009. However, the
mine was restarted in December last year with a production
capacity of 60,000 tons of copper in concentrate.
Recently, BHP Billiton has been focusing on streamlining its
operations by cutting down investments in assets apart from its
core businesses. The divestiture of the mine increases the total
worth of divested businesses over the last 12 months to US$5.0
With BHP Billiton's rigorous efforts in streamlining its
businesses, it is reasonable to expect that the company would
focus more on its core competencies and grow in the coming
quarters. BHP Billion currently has a Zacks Rank #4 (Sell). Other
mining stocks worth a look are
), carrying a Zacks Rank #1 (Strong Buy), whereas
North American Palladium Ltd.
US Energy Corp.
); both carry a Zacks Rank #2 (Buy).
BHP BILLITN LTD (BHP): Free Stock Analysis
CAMECO CORP (CCJ): Free Stock Analysis Report
NORTH AM PALLAD (PAL): Free Stock Analysis
US ENERGY CP-WY (USEG): Free Stock Analysis
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