Mining and infrastructure solutions developer Orica Limited Orica Limited announced a definitive agreement to acquire Cyanco Intermediate 4 Corp (Cyanco), a US-based manufacturer and distributor of sodium cyanide serving gold mining industries across North America.
The acquisition, valued at USD 640 million (AUD 974 million) on a cash-free, debt-free enterprise basis, marks a strategic move to bolster Orica’s Mining Chemicals business, the ASX-listed company said in a media release.
Cyanco’s extensive presence in key mining regions such as the US, Canada, Mexico, Latin America, and Africa will complement Orica’s existing operations, creating a global network for sodium cyanide production and distribution.
The acquisition is set to more than double Orica’s sodium cyanide production capacity to approximately 240,000 tons per annum, with Cyanco’s two manufacturing plants in Nevada and Texas contributing significantly to this expansion.
The transaction, aligned with Orica’s growth strategy beyond blasting, aims to establish a vertical in Mining Chemicals and fortify its position in the lucrative North American gold mining sector.
Leveraging Cyanco’s strategic location and access to cost-competitive US natural gas-based manufacturing assets, Orica anticipates strengthened EBITDA margins and substantial free cash flow conversion.
Sanjeev Gandhi, managing director and CEO of Orica, expressed enthusiasm about the acquisition, stating, “I am delighted to announce the acquisition of Cyanco today, accelerating the delivery of Orica’s Mining Chemicals strategy and creating a leading global mining chemicals business.”
He continued, “Cyanco is a highly complementary business, and by combining it with our established sodium cyanide business, Orica will create a leading integrated global sodium cyanide producer with world-class supply capabilities in mining.”
Gandhi also highlighted the mutual benefits for both Cyanco and Orica stakeholders, underscoring the enhancement of customer service and the expansion of Orica’s global network.
He added, “We are excited about the opportunities this will create for Orica, our customers, and our shareholders.”
The acquisition is subject to regulatory approvals and customary closing conditions and is expected to be completed by the end of FY2024.
Orica maintains its earnings outlook for FY2024 as per the ASX announcement released on 15 February 2024.
