Fortescue’s Alta Copper Buy Raises Questions on Resource Reclassification and Project Risks
Fortescue Ltd has announced a binding agreement to acquire the remaining 64% of Alta Copper, gaining full control of the Cañariaco Copper Project in Peru. The deal values Alta Copper at C$139 million and aligns with Fortescue’s expanding copper strategy.
- Fortescue to acquire remaining 64% of Alta Copper for C$1.40 per share
- Transaction values Alta Copper at C$139 million with a 50% premium
- Acquisition includes Cañariaco Copper Project with over 2 billion tonnes of copper resources
- Alta Copper board unanimously recommends the deal; key shareholders committed to vote in favor
- Deal expected to close in Q1 2026, pending shareholder and court approvals
Fortescue’s Strategic Expansion into Copper
Fortescue Ltd (ASX – FMG) has taken a decisive step to bolster its copper portfolio by agreeing to acquire the remaining 64% stake in Alta Copper Corp. The transaction, structured as a Canadian Plan of Arrangement, values Alta Copper at approximately C$139 million, with shareholders receiving C$1.40 per share, a substantial 50% premium over the recent trading price. This move underscores Fortescue’s commitment to expanding its footprint in critical minerals, particularly copper, which is increasingly vital for the global energy transition.
Unlocking the Potential of the Cañariaco Project
At the heart of this acquisition is the Cañariaco Copper Project, located in Northern Peru, a region known for its rich porphyry copper deposits. Alta Copper holds 100% ownership of this project, which spans 91 square kilometers and includes the Cañariaco Norte and Sur deposits, along with the Quebrada Verde prospect. The project boasts a combined mineral resource estimate exceeding 2 billion tonnes at copper-equivalent grades that suggest a long-life operation potential, as outlined in a Preliminary Economic Assessment completed in mid-2024.
Strong Support and Due Diligence
The acquisition has garnered unanimous support from Alta Copper’s board, which, along with a special committee and independent advisers, has deemed the offer fair. Key shareholders, including directors and officers holding over 12% of shares, have committed to vote in favor, signaling strong internal confidence. Fortescue’s existing 36% stake in Alta Copper and its established presence in Latin America since 2018 provide a solid foundation for advancing the project, leveraging its technical expertise and community engagement experience.
Regulatory and Market Considerations
The transaction requires approval from Alta Copper shareholders, including a two-thirds majority vote, as well as sanction from the British Columbia Supreme Court. Fortescue anticipates closing the deal in the March quarter of 2026. While the mineral resource estimates are currently reported under Canadian NI 43-101 standards, Fortescue plans to undertake further drilling and work programs to reclassify these resources under the JORC Code within three years, which could impact future valuation and project development timelines.
Implications for Fortescue and the Copper Market
This acquisition aligns with Fortescue’s broader strategy to secure critical minerals essential for electrification and decarbonization efforts worldwide. By consolidating control over the Cañariaco Project, Fortescue positions itself to capitalize on copper’s rising demand. However, the success of this venture will depend on navigating regulatory approvals, community relations, and the technical challenges of resource reclassification and development in a complex jurisdiction.
Bottom Line?
Fortescue’s acquisition of Alta Copper marks a pivotal expansion in its copper ambitions, setting the stage for growth amid evolving market dynamics.
Questions in the middle?
- How will Fortescue’s planned JORC reclassification impact the valuation and development timeline of the Cañariaco Project?
- What are the key regulatory and community engagement risks Fortescue faces in advancing the project in Northern Peru?
- How will this acquisition influence Fortescue’s overall critical minerals strategy and its position in the global copper market?
