TORONTO, ONTARIO–(Marketwired - Nov. 3, 2014) - Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) (“Lundin Mining” or the “Company”) is pleased to announce the closing of the acquisition of an 80% ownership stake in the Candelaria/Ojos del Salado copper mining operations and supporting infrastructure (together, “Candelaria”) from Freeport-McMoRan Inc. (“Freeport”), previously announced on October 6, 2014.
Paul Conibear, President and CEO stated, “The completion of the Candelaria acquisition adds another cornerstone asset to the Company that will deliver excellent value to shareholders and contribute significantly to growth in production, cash flow and earnings. We look forward to establishing an excellent reputation in Chile over many years to come as we work closely with our new employees and stakeholders at Candelaria in order to unlock additional value from this high quality asset.”
Total cash consideration paid at closing by the Company was approximately US$1,852 million, consisting of a US$1,800 million base purchase price plus approximately US$52 million for cash and non-cash working capital and other agreed adjustments. In addition, contingent consideration of up to US$200 million is also payable calculated as 5% of net copper revenue in any annual period over the next five years if the realized average copper price exceeds US$4.00 per pound. The acquisition was funded by the US$1.0 billion senior secured note financing, the CAD$674 million (US$600 million) subscription receipt equity financing and the US$648 million upfront payment under the stream agreement with a subsidiary of Franco-Nevada Corporation. The Company also repaid its existing US$250 million term loan with the proceeds from the financings and has executed an amendment to its US$350 million revolving credit facility which will remain in place under existing terms.
About Lundin Mining
Lundin Mining is a diversified base metals mining company with operations and projects in Portugal, Sweden, Spain and the U.S.A. producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.
On Behalf of the Board,
Paul Conibear, President and CEO
Forward Looking Information
This news release includes “forward-looking information,” within the meaning of applicable Canadian securities laws (collectively referred to herein as “forward-looking statements” or “forward-looking information”). All statements other than statements of historical facts included in this news release, including, without limitation, the Company’s plans and business strategy may constitute forward-looking statements. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates as well as beliefs and assumptions made by the Company’s management. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, these statements, by their nature, involve risks and uncertainties and are not guarantees of future performance. Such statements are also subject to assumptions concerning, among other things, the Company’s anticipated business strategies and anticipated trends in the Company’s business. The Company can give no assurance that these estimates and expectations will prove to have been correct. Actual outcomes and results may, and often do, differ from what is expressed, implied or projected in such forward-looking statements, and such differences may be material. Some important factors that could cause actual results to differ materially from those expressed in these forward-looking statements include, but are not limited to: risks and uncertainties relating to the Company’s ability to integrate Candelaria and realize the anticipated benefits of the Acquisition; risks and uncertainties relating to the estimated cash costs, timing and amount of production, cost estimates, foreign currency fluctuations; risks inherent in mining including environmental hazards, industrial accidents, unusual or unexpected geological formations, ground control problems and flooding; risks associated with the estimation of mineral resources and reserves and the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations; actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations; uncertain political and economic environments; changes in laws or policies, foreign taxation, delays or the inability to obtain necessary governmental permits; and litigation risks. Forward-looking information may also be based on other various assumptions including, without limitation: the expectations and beliefs of management, the assumed long term price of copper, gold or silver; and that the Company can access financing, appropriate equipment and sufficient labour and that the political environment where the Company operates will continue to support the development and operation of mining projects. Accordingly readers are cautioned that the above list of cautionary statements is not exhaustive. These and other factors could cause actual results to differ materially from the Company’s expectations expressed in the forward-looking statements included in this news release, and further details and descriptions of these and other factors are disclosed in the Company’s annual information form and other public filings which are available on SEDAR at www.sedar.com. The Company will not update these statements unless applicable securities laws require the Company to do so.