(Yicai) May 9 -- China’s JCHX Mining Management has secured financial backing to take full control of CMH Colombia for an estimated USD108 million to USD128 million, thereby securing full ownership of the Alacrán project, a major copper-gold-silver mine in Colombia.

JCHX will acquire the other half of CMH through its Swiss subsidiary, Veritas Resources, which already owns 50 percent, the Beijing-based firm announced yesterday. Bogotá-based CMH was set up in 2016 as a joint venture between JCHX and Canada’s Cordoba Minerals. The Alacrán project, its core asset, is expected to become Colombia’s largest copper mine.

To fund the acquisition, Veritas will issue new shares to three external investors, which will dilute JCHX’s stake in Veritas from 100 percent to 55 percent. Two of them are Hong Kong-based firms, while the third is Naipu Mining Machinery, a Shenzhen-listed mining equipment supplier.

Naipu announced the same day that it will invest as much as USD51.3 million in Veritas, becoming its second-largest shareholder with a 22.5 percent stake.

According to JCHX, the Alacrán project will require a total investment of USD420.4 million, of which JCHX will contribute about USD231 million based on its ownership ratio. The open-pit mine will produce copper, gold, and silver concentrates and is expected to take two years to develop, with an estimated life of 14.2 years.

A feasibility study forecasts the mine will recover 797 million pounds of copper, 550,000 ounces of gold, and 5.4 million ounces of silver over its lifetime. The report estimates a three-year payback period, based on a copper price of USD3.99 per pound, gold at USD1,715 an ounce, and silver at USD22.19 an ounce.

JCHX, which started out as a mining services provider, has been expanding into mine ownership and development in recent years. In January, it announced a USD751 million investment in the Lonshi Copper Mine in the Democratic Republic of the Congo. Last year, it acquired an 80 percent stake in the Lubambe Copper Mine in Zambia.

Shares of JCHX [SHA: 603979] closed 0.2 percent higher at CNY37.22 (USD5.20) in Shanghai today, while Naipu [SHE: 300818] fell 3.3 percent to CNY22.85.

Editor: Emmi Laine