Lundin Mining (TSX:LUN,OTC Pink:LUNMF) has entered a definitive agreement to promote its Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden to Boliden (STO:BOL) for whole consideration of as much as US$1.52 billion.
The sale, introduced by the corporate on Monday (December 9), will see Boliden purchase full possession of Somincor, the corporate working Neves-Corvo, and Zinkgruvan Mining Aktiebolag, together with its related entities.
The contingent funds for the Neves-Corvo operation are linked to copper and zinc costs exceeding US$4.50 per pound and US$1.30 per pound, respectively, between 2025 and 2027.
For Zinkgruvan, contingent funds are tied to zinc costs surpassing US$1.40 per pound throughout 2025 and 2026, offered annual zinc manufacturing meets a minimal threshold of 135 million kilos.
Funds are capped at US$25 million yearly, with a complete most of US$50 million.
Incremental income exceeding these thresholds will lead to funds to Lundin Mining, capped at US$100 million over the interval.
Lundin Mining expects to obtain US$1.37 billion in upfront money at closing, based mostly on monetary situations as of August 31, 2024, with curiosity accruing at 5 p.c yearly till the cut-off date.
The transaction additionally entails a cash-free, debt-free enterprise worth of US$1.3 billion, with an extra US$150 million in contingent funds tied to future copper and zinc costs. The corporate intends to make use of the proceeds to strengthen its steadiness sheet and prioritize its progress within the Vicuña District in South America.
“It’s an opportune time to optimize our portfolio by this divestiture as we drive in the direction of changing into a top-tier copper-dominant mining firm,” stated firm CEO Jack Lundin in a press launch.
Neves-Corvo and Zinkgruvan have been vital contributors to Lundin Mining’s progress as a multi-asset base metals producer. In response to Lundin, the transition of those belongings to Boliden will present continuity for native stakeholders and staff below new administration.
Publish-transaction, Lundin Mining will give attention to its operations and improvement tasks in Argentina, Brazil, Chile, and the US, in addition to ongoing copper, zinc, gold, and nickel manufacturing.
The sale is predicted to supply the corporate with monetary flexibility to develop its operations in South America and advance its copper manufacturing capabilities.
Each corporations anticipate finishing these processes by mid-2025.
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Securities Disclosure: I, Giann Liguid, maintain no direct funding curiosity in any firm talked about on this article.
