Appian completes $420M Brazil copper mine sale to Chinese group

Appian Capital Advisory has completed the sale of Mineração Vale Verde (MVV), owner of a mid-scale copper-gold mine in Brazil, to China’s Baiyin Nonferrous Group for $420 million. The deal was announced last November and has since received all necessary approvals.

The sale marks Appian’s 13th successful exit after building up mining assets that it considers to be “undervalued”.

“This transaction further validates Appian’s ability to identify great overlooked assets and use our in-house technical expertise to realize their potential and optimize their value,” Appian CEO Michael Scherb said in a news release Wednesday.

In October 2022, the fund and its affiliates agreed to sell MVV — alongside its Atlantic Nickel unit in Brazil — to Sibanye-Stillwater (NYSE: SBSW; JSE: SSW) for $1.2 billion, but the South African miner reneged on the deal after just three months. Appian subsequently took Sibanye to court, seeking in excess of $600 million in damages. A 2023 deal to sell the Brazilian assets to Glencore-backed ACG (LSE: ACG) for $1 billion also collapsed shortly after.

Last October, a UK court ruled in favour of Appian and deemed Sibanye liable for damages, the amount of which will be determined in a hearing later this year. A month later, a $420 million deal was struck with Baiyin for MVV.

Greenfield copper-gold asset

MVV holds the Serrote greenfield open-pit copper-gold asset located in Alagoas. Appian acquired it from Canada’s Aura Minerals (TSX: ORA) in 2018 after identifying Serrote as a “rare standalone, construction-ready copper project with meaningful precious metal by-product credits” that can be improved by its expertise in mine development.

Following the acquisition, Appian’s team completed a new definitive feasibility study based on the internal view of a rescoped project developed during due diligence. This included reducing plant throughput and focusing production on a higher-grade section of the resources.

These changes led to a lower initial CAPEX of $243 million versus $420 million in the original mine plan, as well as reduced operating costs over the life of mine.

The mine was constructed during the covid-19 pandemic and brought to production in May 2021. The project was delivered ahead of schedule and under budget by $48 million within three years of Appian’s initial acquisition.

The ramp-up of commercial operations was completed in the fourth quarter of 2022, and since then, MVV has been in stable operations for over two years. Last year, it produced 18,300 tonnes of copper and 8,200 oz. of gold.