Industria
Lundin Mining Announces Sale of Neves-Corvo and Zinkgruvan for Total Consideration of up to $1.52 Billion
The proceeds from the Transaction will strengthen the Company's balance sheet and support its growth plans in the Vicuña District.
"Neves-Corvo and Zinkgruvan have played a significant role in catalyzing the Company to become a multi-asset base metals producer of global scale. I want to thank the teams for their dedication and hard work over the years; the Company would not be where it is today without these two long-life mining operations. We believe these operations will be an excellent strategic fit under Boliden's operatorship, and the employees and local stakeholders will benefit from the new ownership and highly experienced management team.
"The sale will further strengthen our balance sheet to support the Company's growing portfolio in South America and enable management to concentrate our focus in an area which will provide the greatest long-term value for our shareholders. It is an opportune time to optimize our portfolio through this divestiture as we drive towards becoming a top-tier copper-dominant mining company."
Boliden has agreed to acquire 100% of the shares of Somincor–Sociedade Mineira de Neves-Corvo, S.A. ("Neves-Corvo") and 100% of the shares of each of Zinkgruvan Mining Aktiebolag and North Atlantic Natural Resources Aktiebolag (together "Zinkgruvan") from subsidiaries of Lundin Mining for up to $1.52 billion in cash, consisting of $1.37 billion in upfront cash consideration at closing and up to $150 million in contingent consideration. Total consideration at closing may also be subject to other customary adjustments in the event of non-permitted leakage from the Lock-Box.
The terms of the agreement incorporate a Lock-Box completion mechanism, with the purchase price based on a cash-free and debt-free enterprise value of $1.3 billion , and assuming a normalized level of working capital. Based on the Lock-Box financial statements as of August 31, 2024 , the upfront cash consideration to be paid at closing is $1.37 billion . The upfront cash consideration will also accrue interest at a 5% annual interest rate from August 31, 2024 to closing and is payable to the Company at closing.
Up to $100 million in contingent payments at Neves-Corvo is tied to underlying copper and zinc prices ("Neves-Corvo Contingent Payment"). Boliden will pay Lundin Mining 60% of the incremental revenue realized in each of the three calendar years between 2025 and 2027 where the average realized price on a semi-annual calendar period exceeds $4.50 /lb copper and/or $1.30 /lb zinc as per the London Metal Exchange ("LME") reference prices. Incremental revenue is calculated using total payable sales volumes of copper and/or zinc for the semi-annual calendar period and tax affected using Portugal's current corporate income tax rate.
Up to $50 million in contingent payments at Zinkgruvan is tied to underlying zinc prices ("Zinkgruvan Contingent Payment"). Boliden will pay Lundin 50% of the incremental revenue realized in each of the two calendar years between 2025 and 2026 where the average realized zinc price on an annual calendar year exceeds US$1.40 /lb zinc, as per the LME reference prices, provided a minimum annual production of 135 million pounds of payable zinc is achieved. Incremental revenue is calculated using total payable sales volumes of zinc for an annual calendar year period and tax affected using Sweden's current corporate income tax rate. The Zinkgruvan Contingent Payment is subject to a maximum payout of $25 million per calendar year.
The Transaction is anticipated to close in mid-2025, subject to the completion of customary conditions and regulatory approvals, including but not limited to merger control approvals by the EU Commission and approval of the Swedish Inspectorate of Strategic Products under the Swedish FDI Act, and the change of control approval by the Portuguese Directorate-General for Energy and Geology ( ) under the Neves-Corvo Concession Contract.
Lundin Mining is a diversified Canadian base metals mining company with operations or projects in Argentina , Brazil , Chile , Portugal , Sweden and the United States of America , primarily producing copper, zinc, gold and nickel.
The information in this news release is information that Lundin Mining is required to make public under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on December 9, 2024 at 1:00 am EST .
For further information, please contact: Stephen Williams , Vice President, Investor Relations: +1 604 806 3074, Robert Eriksson , Investor Relations Sweden: +46 8 440 54 50
View original content: https://www.prnewswire.co.uk/news-releases/lundin-mining-announces-sale-of-neves-corvo-and-zinkgruvan-for-total-consideration-of-up-to-1-52-billion-302325744.html