Lundin selling European mines to Boliden for US$1.52 billion
Lundin Mining Corp. [LUN-TSX; LUMI-Sweden] has signed a definitive deal to sell its Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden to Boliden AB for up to US$1.52 billion. The mines are Lundin’s oldest assets and generated about 19% of the company’s revenue last year.
Under the terms of the agreement, Lundin will receive US$1.37 billion in cash on closing, based on a cash-free and debt free enterprise value of $1.3 billion as of an August 31, 2024, lock box date. In addition, Ludin will receive up to US$150 million in cash upon satisfaction of certain conditions. That includes up to US$100 million in contingent payments at Neves Corvo that is tied to underlying copper and zinc prices, as well as up to US$50 million in contingent payments at Zinkgruvan that is tied to underlying zinc prices.
The transaction is not subject to shareholder approval or any financing conditions, and is expected to close in mid-2025.
Lundin shares advanced on the news, rising 4.1% or 56 cents to $14.30. The shares trade in a 52-week range of $17.97 and $9.93.
“Neves Corvo and Zinkgruvan have played a significant role in catalyzing the company to become a multi-asset base metals producer on a global scale,’’ said Lundin President and CEO Jack Lundin. “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 that will provide the greatest long-term value for our shareholders,’’ he said.
“We believe these operations will be an excellent strategic fit under Boliden’s operatorship, and the employees and local stakeholders will benefit from new ownership and highly experienced management team.’’
Lundin is a diversified Canadian base metals mining company with operations or projects in Argentina, Brazil, Chile, Portugal, Sweden and the U.S., primarily producing copper, zinc, gold, and nickel
Lundin was in the news recently when it announced that it and BHP Group Limited [BHP-NYSE] had struck a deal to acquire Filo Mining Corp. via a court-approved plan of arrangement that was valued at $33 per Filo share or $4.1 billion.
Prior to the announcement, the Lundin Family Trusts owned a 33% stake in Filo Mining, while BHP held 6.0%.
Filo’s key asset is the 100%-owned Filo del Sol (FDS) project, a high-sulphidation epithermal copper-gold-silver deposit associated with one or more large porphyry gold systems. Filo del Sol is located in the Andes Mountains, 140 kilometres southeast of the Chilean city of Copiapo, and is ranked as one of the world’s largest undeveloped copper-silver-gold deposits.
Lundin Mining owns 100% of the Josemaria project, an advanced-stage copper project located approximately 10 kilometres from FDS in San Juan Province, Argentina.