Lundin Mining to Sell Two Mines to Boliden for $1.52 Billion
Lundin Mining to Sell Two Mines to Boliden for $1.52 Billion

Lundin Mining to Sell Two Mines to Boliden for $1.52 Billion

  • 12-Dec-2024 2:00 PM
  • Journalist: Nightmare Abbey

Lundin Mining Corporation announced that it has entered into a definitive agreement to sell its Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden to Boliden AB for up to $1.52 billion. This deal, announced on December 9, was earlier finalized in November 2024.

Transaction Details

According to the terms of the agreement, Lundin Mining will receive $1.37 billion upfront, based on a cash-free and debt-free enterprise value of $1.3 billion as of August 31, 2024. The company may receive an additional $150 million contingent on certain conditions related to metal prices and production levels at both operations.

This transaction is not subject to shareholder approval or any financing conditions.

Boliden will acquire 100% of the shares of Somincor–Sociedade Mineira de Neves-Corvo, S.A. (Neves-Corvo) and 100% of the shares of Zinkgruvan Mining Aktiebolag and North Atlantic Natural Resources Aktiebolag (Zinkgruvan) from Lundin Mining's subsidiaries.

Strategic Rationale

Jack Lundin, President and CEO of Lundin Mining, commented, "Neves-Corvo and Zinkgruvan have been instrumental in transforming the company into a global, multi-asset base metals producer. We express our gratitude to the dedicated teams who have contributed to the success of these operations. We believe that these assets will thrive under Boliden's ownership, and the employees and local stakeholders will benefit from the new ownership and experienced management team."

Lundin further added, "The proceeds from the sale will bolster our balance sheet and support our growth initiatives in the Vicuña District. This divestiture aligns with our strategy of becoming a top-tier copper-dominant mining company, allowing us to focus on our core assets in South America."

Contingent Payments

• Neves-Corvo Contingent Payment: Up to $100 million is tied to copper and zinc prices. Boliden will pay Lundin Mining 60% of the incremental revenue realized between 2025 and 2027, when average prices exceed $4.50/lb copper and/or $1.30/lb zinc.

• Zinkgruvan Contingent Payment: Up to $50 million is tied to zinc prices. Boliden will pay Lundin 50% of the incremental revenue realized between 2025 and 2026 when the average zinc price exceeds $1.40/lb zinc, and minimum annual production of 135 million pounds of payable zinc is achieved.

Expected Timeline

The transaction is anticipated to close in mid-2025, subject to customary conditions and regulatory approvals, including merger control approvals by the EU Commission, approval by the Swedish Inspectorate of Strategic Products, and change of control approval by the Portuguese Directorate-General for Energy and Geology.

Lundin Mining is a Canadian company involved in mining base metals like copper, zinc, gold, and nickel. It operates mines and projects in several countries, including Argentina, Brazil, Chile, Portugal, Sweden, and the United States.

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