REG - South32 Limited - Agreement to Divest Cerro Matoso

South32Announcement

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RNS Number : 9780P  South32 Limited  07 July 2025

 

 

 

7 July 2025

 

South32 Limited

(Incorporated in Australia under the Corporations Act 2001 (Cth))

(ACN 093 732 597)

ASX / LSE / JSE Share Code: S32; ADR: SOUHY

ISIN: AU000000S320

south32.net

 

 

 

AGREEMENT TO DIVEST CERRO MATOSO

South32 Limited (ASX / LSE / JSE: S32; ADR: SOUHY) (South32) has entered into
a binding agreement to sell Cerro Matoso 1  (#_ftn1) (Transaction) to a
subsidiary of CoreX Holding B.V. (CoreX or Buyer).

The Transaction follows a strategic review in response to structural changes
in the nickel market.

On completion of the Transaction, the Buyer will pay nominal consideration and
assume economic and operating control of Cerro Matoso, including all current
and future liabilities 2  (#_ftn2) .

The Buyer will make future cash payments of up to US$100M, as follows:

·    up to US$80M of price-linked consideration 3  (#_ftn3) based on
future production and nickel prices; and

·    up to US$20M, in four equal payments, based on permitting milestones
within the next five years for the Queresas & Porvenir North project.

The Transaction is subject to the satisfaction or waiver of certain
conditions, including international merger clearances and a reorganisation of
the entity which holds Cerro Matoso.

The Transaction is expected to complete in late CY25, subject to these
conditions.

South32 Chief Executive Officer, Graham Kerr said: "The Transaction is
consistent with our strategy and will further streamline our portfolio toward
higher margin businesses in minerals and metals critical to the world's energy
transition.

"The Transaction will deliver a clean separation of Cerro Matoso and provide
additional balance sheet flexibility to support investment in our growth
options in copper and zinc.

"Cerro Matoso has a long and proud history in Colombia. Over the coming months
we will work with the Buyer, our workforce, the local communities, government,
customers and suppliers to support a successful transition of ownership."

Accounting treatment

Cerro Matoso will be reported in the South32 Group's Underlying financial
results as a discontinued operation until completion of the Transaction.

As a result of the Transaction, the Group's FY25 financial statements will
include an impairment expense of ~US$130M (same amount post-tax). This expense
will be excluded from FY25 Underlying earnings, in accordance with the Group's
accounting policies.

Advisers

Goldman Sachs is acting as a financial adviser and Freshfields as legal
adviser to South32.

The Buyer

CoreX is a vertically integrated, global industrial conglomerate established
in 2024 by Robert Yüksel Yildirim. CoreX operates across metals & mining,
ports & terminals, green energy, shipping & logistics, infrastructure
& construction, chemicals, international trading, financial investments,
and venture capital. The company is active in 55 countries across five
continents, employing over 20,000 people globally. CoreX Metals and Mining, a
division of CoreX, is a global leader in chromite ore mining and high-carbon
ferrochrome production. The Metals and Mining division has a strategy focused
on growing nickel production globally, evidenced by the recent acquisition of
Compagnie Miniere Du Bafing, in Côte D'Ivoire, along with existing ownership
of Golden Eagle Nickel, in the Republic of North Macedonia, and NewCo
Ferronikeli, in the Republic of Kosovo.

The obligations of the Buyer are guaranteed by three entities: Vargon Alloys
AB, Voskhod Group and Yilport Holding A.S.

About us

Our purpose is to make a difference by developing natural resources, improving
people's lives now and for generations to come. We are trusted by our owners
and partners to realise the potential of their resources. We produce minerals
and metals critical to the world's energy transition from operations across
the Americas, Australia and Southern Africa and we are discovering and
responsibly developing our next generation of mines. We aspire to leave a
positive legacy and build meaningful relationships with our partners and
communities to create brighter futures together.

 Investor Relations
 Ben Baker

T          +61 8 9324 9363

M        +61 403 763 086

E          Ben.Baker@south32.net (mailto:Ben.Baker@south32.net)
 Media Relations
 Jamie Macdonald

T          +61 8 9324 9000

M        +61 408 925 140

E          Jamie.Macdonald@south32.net
 (mailto:Jamie.Macdonald@south32.net)

Further information on South32 can be found at www.south32.net
(http://www.south32.net) .

Approved for release to the market by Graham Kerr, Chief Executive Officer

JSE Sponsor: The Standard Bank of South Africa Limited

7 July 2025

FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements, including statements about
trends in commodity prices and currency exchange rates; demand for
commodities; production forecasts; plans, strategies and objectives of
management; capital costs and scheduling; operating costs; anticipated
productive lives of projects, mines and facilities; and provisions and
contingent liabilities. These forward-looking statements reflect expectations
at the date of this release, however they are not guarantees or predictions of
future performance. They involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control, and which may cause
actual results to differ materially from those expressed in the statements
contained in this release. Readers are cautioned not to put undue reliance on
forward-looking statements. Except as required by applicable laws or
regulations, the South32 Group does not undertake to publicly update or review
any forward-looking statements, whether as a result of new information or
future events. Past performance cannot be relied on as a guide to future
performance. South32 cautions against reliance on any forward-looking
statements or guidance.

 1  (#_ftnref1) By way of sale of subsidiary companies which hold South32's
99.9% interest in Cerro Matoso S.A. and 100% interest in South32 Energy S.A.S.
E.S.P.

 2  (#_ftnref2) Except for an immaterial potential historic claim.

 3  (#_ftnref3) The price-linked consideration applies from the period
commencing from the later of January 2027 and the first anniversary post
completion, for a period of 3.5 years, with payments to be made semi-annually.
The price-linked consideration will be paid if the average realised nickel
price exceeds US$15,000/t in any period, in which case 12.5% of incremental
sales revenue (net of freight, royalties and statutory tax) above US$15,000/t
is payable, increasing on a linear scale to 50% of incremental sales revenue
(net of freight, royalties and statutory tax) at or above US$19,000/t. It does
not apply to sales revenue from externally sourced ore.

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