News
Proposed Merger Of Lundin Mining Corporation And Arcon International Resources P.L.C.
March 18, 2005
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NEWS RELEASE TRANSMITTED BY CCNMatthews
FOR: LUNDIN MINING CORPORATION
TSX SYMBOL: LUN
MARCH 18, 2005 - 02:53 ET
Proposed Merger Of Lundin Mining Corporation And Arcon
International Resources P.L.C.
TORONTO, ONTARIO--(CCNMatthews - March 18, 2005) - NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION IN OR INTO, THE UNITED STATES, AUSTRALIA,
SOUTH AFRICA OR JAPAN
Lundin Mining Corporation ("Lundin Mining") (TSX:LUN)(O-list
Stockholmsborsen:LUMI) is pleased to announce that the attached
announcement under Rule 2.5 of the Irish Takeover Rules (the "2.5
Announcement") was issued in Ireland today. The 2.5 Announcement sets
out the terms and conditions of the previously announced proposed merger
of Lundin Mining and Arcon International Resources P.L.C. ("Arcon")
agreed by Lundin Mining and the Independent Directors of Arcon. The
merger will be effected by means of a recommended merger offer to be
made by Lundin Mining to acquire the entire issued and to be issued
capital of Arcon on the terms and conditions set forth in the attached
2.5 Announcement and to be more particularly described in an offer
document (the "Offer Document") to be circulated to Arcon shareholders
on or about March 21, 2005.
/T/
ON BEHALF OF THE BOARD
"Edward F. Posey"
President
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, THE UNITED
STATES, AUSTRALIA, SOUTH AFRICA OR JAPAN
18 March 2005
PROPOSED MERGER OF
LUNDIN MINING CORPORATION ("LUNDIN MINING") AND
ARCON INTERNATIONAL RESOURCES P.L.C. ("ARCON")
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/T/
Merger will create diversified European base metals producer
Further to the announcement made by Lundin Mining and ARCON on 3 March
2005, the Board of Directors of Lundin Mining and the Independent
Directors of ARCON are pleased to announce that they have reached
agreement on the terms of a recommended Merger of the two companies (the
"Merger").
Under the terms of the Merger Offer, each holder of 100 ARCON Shares
will be entitled to receive US$36.2198 in cash (the "Cash Component")
and 3.2196 Lundin Mining Swedish Depository Receipts ("Lundin Mining
SDRs") (the "Securities Component") and so on in proportion for any
greater or lesser number of ARCON Shares held, such that 32 ARCON Shares
will entitle the holder to approximately US$11.59 in cash and 1 Lundin
Mining SDR. Fractions of Lundin Mining SDRs will not be distributed but
will be aggregated and sold in the market for the benefit of the
relevant ARCON Shareholders.
The terms of the Merger Offer also contain a limited cash alternative
(the "Cash Alternative") whereby all ARCON Shareholders may elect to
receive an amount of cash equivalent to the full value of the Merger
Offer per ARCON Share in respect of the first 1,000 ARCON Shares
registered in each ARCON Shareholder's name. ARCON Shareholders owning
1,000 or less ARCON Shares will be entitled to elect to receive this
Cash Alternative in respect of their entire ARCON Shareholding. The
value of this Cash Alternative per ARCON Share will represent the Cash
Component of the Merger Offer for an ARCON Share plus an amount of cash
equivalent to the value of the Securities Component of the Merger Offer
for an ARCON Share as at the date the Merger Offer becomes or is
declared unconditional in all respects.
Based on the Closing Price of SEK71 per Lundin Mining SDR on the O-list
of the Stockholm Stock Exchange on 16 March 2005, the last practicable
date prior to the issue of this announcement ("Announcement"), and based
on the prevailing US$/EUR and SEK/EUR exchange rates on 16 March 2005,
the Merger Offer values each ARCON Share at EUR 0.522 (the "Current
Merger Value per ARCON Share") and the entire issued share capital of
ARCON (assuming the exercise of all outstanding options under the ARCON
Share Option Schemes) at approximately EUR 93.4 million as at that date.
This represents a premium of approximately 14% over the Closing Price of
EUR 0.46 per ARCON Shares on 16 March 2005 (the last practicable date
prior to the issue of this Announcement).
The Merger will create a diversified European base metals producer with
aggregate annual zinc production of approximately 152,000 MT of metal in
concentrate and annual lead production of approximately 46,000 MT of
metal in concentrate (each based on year ended 31 December 2004), as
well as copper and silver production and a substantial exploration
portfolio. The Enlarged Group will have the ability to commit financial
and technical resources for investment in, and exploration around, the
Galmoy mine making it possible to seek to both enhance operational
efficiencies and extend Galmoy's mine life.
Commenting on the Merger, Mr. Lukas Lundin, Chairman of Lundin Mining,
said:
"This Merger will create a premier zinc mining investment choice for
investors. With three low-cost mines focused in Europe, the Enlarged
Group will generate substantial cash flow which will be used to further
enhance the Enlarged Group's growth strategy. The Merger will combine
two quality management teams who can invest immediately in the Galmoy
mine to further enhance operational performance and to seek to expand
the Galmoy mine life through a substantially enhanced exploration
program. The Enlarged Group will continue to have the backing of the
Lundin family, with its track record of adding shareholder value, and
the involvement of Sir Anthony O'Reilly, ARCON's principal shareholder,
who, following completion of the Merger, will have a significant
interest in the share capital of the Enlarged Group (approximately 9% on
an undiluted basis)."
Mr. Patrick Hayes, Chairman of the Independent Committee of ARCON
Directors established, following consultation with, and the agreement
of, the Irish Takeover Panel, for the purposes of considering the Merger
Offer, said:
"This Merger Offer allows ARCON Shareholders to realise both a cash
value for part of their investment in ARCON which reflects the current
favourable sentiment towards base metal equities, and also facilitates
their retention of part of their investment through a shareholding in
the Enlarged Group that maintains exposure (while diversifying risk) to
future production and exploration opportunities in both Ireland and
Sweden."
This summary should be read in conjunction with the full text of the
attached Announcement.
/T/
For further information, contact:
Lundin Mining Corporation
Karl-Axel Waplan +46 705 104 239
Sophia Shane +1 604 689 7842
ARCON International Resources P.l.c.
Peter Kidney +353 1 667 3063
(Independent Director)
James McCarthy +353 1 283 7144
(Director)
Macquarie Bank Limited
(Financial Adviser to Lundin Mining)
Richard Gannon +44 20 7065 2173
Davy Corporate Finance Limited
(Financial Adviser to the Independent Directors of ARCON)
Eugenee Mulhern +353 1 679 6363
Murray Consultants
(Public relations adviser to ARCON)
Pauline McAlester +353 1 498 0300
/T/
Macquarie Bank Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
Lundin Mining and no one else in connection with the Merger Offer for
ARCON and will not be responsible to anyone other than Lundin Mining for
providing the protections afforded to clients of Macquarie Bank Limited
or for giving advice in relation to the Merger Offer, the contents of
this Announcement or any transaction or arrangement referred to herein.
Davy Corporate Finance Limited, which is regulated in Ireland by the
Irish Financial Services Regulatory Authority, is acting for the
Independent Directors and for no one else in relation to the matters
described in this Announcement and will not be responsible to anyone
other than the Independent Directors for providing the protections
afforded to clients of Davy Corporate Finance Limited or for giving
advice in relation to the matter referred to in this Announcement.
This Announcement has been approved, solely for the purposes of section
21 of the Financial Services and Markets Act 2000 of the UK, by
Macquarie Bank Limited of Levels 29 & 30, CityPoint, One Ropemaker
Street, London EC2Y 9HD, which is authorised and regulated in the United
Kingdom by the Financial Services Authority.
The full text of the conditions and reference to certain further terms
of the Merger are set out in Appendix I and form part of this
Announcement.
The Directors of Lundin Mining accept responsibility for the information
contained in this Announcement, other than that relating to ARCON, the
ARCON Group, the Directors of ARCON and members of their immediate
families, related trusts and persons connected with them and other than
the recommendation and related opinions of the Independent Directors. To
the best of the knowledge and belief of the Directors of Lundin Mining,
who have taken all reasonable care to ensure that such is the case, the
information contained in this Announcement for which they accept
responsibility is in accordance with the facts and, does not omit
anything likely to affect the import of such information.
The Directors of ARCON, other than Mr. W. James Tilson, accept
responsibility for the information contained in this Announcement, other
than that relating to Lundin Mining, the Lundin Mining Group, the
Directors of Lundin Mining and members of their immediate families,
related trusts and persons connected with them except for the
recommendation and related opinions of the Independent Directors. To the
best of the knowledge and belief of the Directors of ARCON other than
Mr. W. James Tilson, who have taken all reasonable care to ensure that
such is the case, the information contained in this Announcement for
which they accept responsibility is in accordance with the facts and,
does not omit anything likely to affect the import of such information.
The Independent Directors accept responsibility for the recommendation
and the related opinions of the Independent Directors contained in this
Announcement. To the best of the knowledge and belief of the Independent
Directors, who have taken all reasonable care to ensure that such is the
case, the information contained in this Announcement for which they
accept responsibility is in accordance with the facts and, does not omit
anything likely to affect the import of such information.
Any person who is the holder of 1% or more of the Shares of ARCON may
have disclosure obligations under Rule 8.3 of the Irish Takeover Panel
Act, 1997, Takeover (Amendment) Rules 2002, effective from the date of
the commencement of the offer period in respect of the Merger Offer.
This Announcement does not constitute an offer or an invitation to
purchase or subscribe for any securities and does not constitute an
offer of Lundin Mining Securities.
Unless otherwise determined by Lundin Mining, the Merger Offer will not
be made directly or indirectly in, into or from Australia, Japan, South
Africa, the United States or any other jurisdiction where it would be
unlawful to do so, or by the use of the mails, or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce, or by any facility of
a national securities exchange of Australia, Japan, South Africa, the
United States or any other jurisdiction where it would be unlawful to do
so, and the Merger Offer will not be capable of acceptance by any such
means, instrumentality or facility from within Australia, Japan, South
Africa, the United States or any jurisdiction where it would be unlawful
to do so. Accordingly, unless otherwise determined by Lundin Mining,
neither copies of this Announcement nor any other documents related to
the Merger Offer are being, or may be, mailed or otherwise distributed
or sent in, into or from Australia, Japan, South Africa, the United
States or any other jurisdiction where it would be unlawful to do so and
persons receiving such documents (including custodians, nominees and
trustees) must not distribute or send them in, into or from Australia,
Japan, South Africa, the United States or any other jurisdiction where
it would be unlawful to do so, as doing so may invalidate any purported
acceptance of the Merger Offer. Notwithstanding the foregoing
restrictions, Lundin Mining reserves the right to permit the Merger
Offer to be accepted, if in its sole discretion, it is satisfied that
the transaction in question is exempt from or not subject to the
legislation or regulation giving rise to the restrictions in question.
/T/
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, THE UNITED
STATES, AUSTRALIA, SOUTH AFRICA OR JAPAN
18 March 2005
PROPOSED MERGER OF
LUNDIN MINING CORPORATION ("LUNDIN MINING") AND
ARCON INTERNATIONAL RESOURCES P.L.C. ("ARCON")
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/T/
1. Introduction
Further to the announcement made by Lundin Mining and ARCON on 3 March
2005, the Board of Directors of Lundin Mining and the Independent
Directors of ARCON are pleased to announce that they have reached
agreement on the terms of a recommended Merger of the two companies (the
"Merger").
2. Terms and Structure of the Merger Offer
The Merger will be effected by means of a recommended Merger Offer to be
made by Lundin Mining to acquire the entire issued and to be issued
share capital of ARCON (other than ARCON Shares in the beneficial
ownership of Lundin Mining as at the date of despatch of the Offer
Document) and will be made on the terms and subject to the conditions
set out in Appendix I and certain further terms set out in the Offer
Document.
Under the terms of the Merger Offer, each holder of 100 ARCON Shares
will be entitled to receive:
- US$36.2198 in cash (the "Cash Component"); and
- 3.2196 Lundin Mining Swedish Depository Receipts ("Lundin Mining
SDRs") (the "Securities Component")
and so on in proportion for any greater or lesser number of ARCON Shares
held, such that 32 ARCON Shares will entitle the holder to approximately
US$11.59 in cash and 1 Lundin Mining SDR. Fractions of Lundin Mining
SDRs will not be created or distributed but will be aggregated and sold
in the market for the benefit of the relevant ARCON Shareholders.
Therefore ARCON Shareholders holding less than 32 ARCON Shares will
receive US$0.362198 in cash per ARCON Share as the consideration under
the Cash Component of the Merger Offer plus the pro rata net proceeds of
the sale of aggregated Lundin Mining SDRs in respect of the Securities
Component of the Merger Offer.
The terms of the Merger Offer also contain a limited cash alternative
(the "Cash Alternative") whereby all ARCON Shareholders may elect to
receive an amount of cash equivalent to the full value of the Merger
Offer per ARCON Share in respect of the first 1,000 ARCON Shares
registered in each ARCON Shareholder's name. ARCON Shareholders owning
1,000 or less ARCON Shares will be entitled to elect to receive this
Cash Alternative in respect of their entire ARCON Shareholding. The
value of this Cash Alternative per ARCON Share will represent the Cash
Component of the Merger Offer for an ARCON Share plus an amount of cash
equivalent to the value of the Securities Component of the Merger Offer
for an ARCON Share, which shall be determined on the basis of the
Closing Price of Lundin Mining SDRs on the date the Merger Offer becomes
or is declared unconditional in all respects. Further details of the
Cash Alternative will be set out in the Offer Document. Where any ARCON
Shareholder splits their holding of ARCON Shares after the date of this
Announcement by transferring ARCON Shares to persons connected with them
(as defined by section 10 of the Taxes Consolidation Act 1997), then the
ARCON Shares held by such connected persons shall be treated as a single
holding of ARCON Shares for the purposes of any election under the Cash
Alternative received from those connected persons. The provisions
relating to the settlement currency shall apply to the Cash Alternative.
Based on the Closing Price of SEK71 per Lundin Mining SDR on the O-list
of the Stockholm Stock Exchange on 16 March 2005, the last practicable
date prior to the issue of this announcement ("Announcement"), and based
on the prevailing US$/EUR and SEK/EUR exchange rates on 16 March 2005,
the Merger Offer values each ARCON Share at EUR 0.522 (the "Current
Merger Value per ARCON Share") and the entire issued share capital of
ARCON (assuming the exercise of all outstanding options under the ARCON
Share Option Schemes) at approximately EUR 93.4 million as at that date.
This represents a premium of approximately 14% over the Closing Price of
EUR 0.46 per ARCON Share on 16 March 2005 (the last practicable date
prior to the issue of this Announcement).
The expressed value of the Merger Offer will fluctuate in accordance
with movements in the price per Lundin Mining SDR and with movements in
the US$/EUR exchange rate (which affects the Cash Component of the
Merger Offer) and the SEK/EUR exchange rate (which affects the
Securities Component of the Merger Offer).
While the value per ARCON Share under the Merger Offer at the date of
the Initial Announcement of EUR 0.538 (based on the prevailing exchange
rates and the Closing Price of Lundin Mining Shares on the Toronto Stock
Exchange on 2 March 2005) (the "2 March 2005 Value per ARCON Share")
represented a small discount to the Closing Price per ARCON Share of EUR
0.57 on 2 March 2005, the 2 March 2005 Value per ARCON Share and the
Current Merger Value per ARCON Share represent premia of approximately
32% and 28% over the average Closing Prices per ARCON Share in the 12
month period prior to the commencement of the Offer Period,
approximately 35% and 31% over the average Closing Price per ARCON Share
in the 6 month period prior to the commencement of the Offer Period, and
approximately 30% and 26% over the average Closing Price per ARCON Share
in the 3 month period prior to the commencement of the Offer Period.
Following the compulsory acquisition of the remaining shares in NAN not
owned by Lundin Mining, Lundin Mining will have issued approximately
1,313,396 Lundin Mining SDRs to shareholders in NAN. Allowing for this
dilution and assuming full acceptance of the Merger Offer, and ignoring
the effect of the issue, if any, of ARCON Shares pursuant to the ARCON
Share Option Schemes, and ignoring elections, if any, for the Cash
Alternative, ARCON Shareholders will own approximately 14% of the entire
issued share capital of Lundin Mining (on an undiluted basis)
immediately following completion of the Merger Offer.
Settlement currency
ARCON Shareholders will have the ability under the Merger Offer to elect
to receive cash consideration (that is, the Cash Component in respect of
their ARCON Shares and any amount they are entitled to pursuant to an
election for the Cash Alternative) in euro or sterling (if resident in a
Participating State or the United Kingdom respectively). In default of
election, the cash consideration will be paid in euro to ARCON
Shareholders resident in a Participating State and in sterling to ARCON
Shareholders resident in the United Kingdom. ARCON Shareholders resident
elsewhere will receive cash consideration in US dollars. The amount
payable will be calculated by reference to the relevant prevailing
US$/EUR , SEK/EUR , SEK/Pounds Sterling and US$/Pounds Sterling exchange
rates as determined by the Receiving Agent at the latest practicable
time for the relevant payment date. Further details in relation to this
facility will be contained in the Offer Document.
Swedish Depository Receipts
The Securities Component of the consideration under the Merger Offer
will be satisfied by the creation of Lundin Mining SDRs, which will be
quoted on the O-list of the Stockholm Stock Exchange and which will rank
pari passu in all respects with existing Lundin Mining SDRs. Details of
the rights and restrictions attaching to the Lundin Mining SDRs will be
contained in the Offer Document.
3. Conditions
The Merger Offer will be made on the terms and subject to the conditions
set out in Appendix I of this Announcement and certain further terms set
out in the Offer Document.
4. Cash Alternative
In considering the terms of the Merger Offer, the Independent Directors
recognised that a number of ARCON Shareholders with relatively small
shareholdings in ARCON will have an entitlement under the Merger Offer
to only a small number of Lundin Mining SDRs. Accordingly, in order to
alleviate disadvantages suffered by smaller shareholders due to higher
transactional costs as a percentage of the value of their holdings and
difficult administrative hurdles in trading of small holdings, Lundin
Mining has agreed to provide the Cash Alternative.
5. Background to and reasons for the Merger Offer
The Board of ARCON has considered a strategy of diversifying both
production and exploration risk as a means of optimising shareholder
value, and the Independent Directors believe that the Merger Offer
delivers these objectives.
The Merger Offer presents ARCON Shareholders with the opportunity to
participate in an enlarged group with three significant operating assets
instead of just one at Galmoy and a targeted expansion of the Galmoy
mine life through a substantially enhanced exploration program as well
as other exploration opportunities in Sweden.
Furthermore, the Merger Offer allows ARCON Shareholders to realise a
cash value for part of their investment in ARCON which reflects the
current favourable sentiment towards base metals equities.
In considering the Merger Offer, the Independent Directors have had
regard to the risks facing ARCON as a standalone company with a single
and maturing producing asset, notwithstanding the significant
exploration and production progress made by ARCON over recent years. The
following factors have been of relevance in the deliberations of the
Independent Committee with respect to the Merger Offer:
- The combination of ARCON and Lundin Mining mine interests delivers
risk diversification by exposing ARCON Shareholders to a broader asset
portfolio comprising zinc, lead, copper and silver mineralisation and
provides ARCON Shareholders with the ability to capitalise on the
currently prevailing high commodity price environment.
- The production life of the Enlarged Group will be significantly
extended relative to that of Galmoy alone. While the Galmoy mine now
has, following the discovery of the R-Zone ore body, a commercial life
of approximately 5 years (assuming no further discoveries), the
Zinkgruvan mine has a significantly longer remaining commercial life,
currently having an estimated 11-year reserve life with additional
resources that could support mining for a further 8 years, and the
Storliden mine now has an estimated remaining commercial life of
approximately 3 years, with exploration also in progress which, if
successful, would extend its mine life further.
- The greater financial scale and resources of the Enlarged Group can
facilitate accelerated further development of the Galmoy mine. This
would be achieved by investing in operations and exploration with a view
to optimising the use of the mine facilities and potentially extending
the mine life through successful exploration. While increases in
concentrate production volumes from approximately 100,000 MT in 2002 to
approximately 160,000 MT in 2004 at the Galmoy mine have been achieved,
further investment is expected to result in enhanced production volumes.
- The Enlarged Group will also have increased and diversified
exploration potential, with areas of initial focus likely to be around
Galmoy and on acreage held by Lundin Mining in Skellefte, Bergslagen and
Norrbotten districts (three major Swedish mining districts) offering
prospects for zinc, lead and silver plus prospects for gold, copper and
nickel.
- The technical expertise and experience of both companies and their
respective management teams would be available to the Enlarged Group.
- Share price liquidity in the equity of the Enlarged Group is expected
to be greater relative to that of ARCON since the Enlarged Group would
immediately after the Merger Offer have a more diverse institutional and
retail shareholder base.
The Merger Offer terms were negotiated with the objective of achieving
terms that reflect the progress made by ARCON in developing Galmoy since
the 2002 refinancing, and capturing and delivering value for ARCON
Shareholders in the prevailing high zinc price environment. The
Independent Directors believe that this has been successfully achieved
and that implementation of the Merger Offer will create a group with a
combination of improved cash flows, experienced management and a greater
diversity of mines and growth opportunities over a wider geographic area.
6. Membership of Independent Committee
The Initial Announcement advised that Mr. Tony O'Reilly Jnr,
non-executive Chairman of ARCON, is expected to be appointed to the
Board of Lundin Mining following completion of the Merger Offer. This
will be a non-executive position. For this reason, while Mr. Tony
O'Reilly Jnr participated in the initial assessment of the Merger Offer,
he exempted himself from consideration of the initial determination by
the Board of ARCON as a whole as to whether it would be able to
recommend an offer, if made, on the terms detailed in the Initial
Announcement.
The Board of ARCON also advised in the Initial Announcement that an
independent committee of the Board of ARCON would be established for the
purposes of considering the offer if and when it was made. This
Independent Committee has, following consultation with the Panel, been
duly formed and comprises Mr. Patrick Hayes, Mr. Kevin Ross, Mr. James
S. McCarthy, Mr. William A. Mulligan and Mr. Peter Kidney.
Mr. Tony O'Reilly Jnr is not a member of the Independent Committee, for
the reasons set out above.
Mr. James S. D. McCarthy is a director of Corporate Finance Ireland
Limited, which acts as an adviser to Fairfield, a provider of financing
facilities to ARCON, as referred to in section 12 below. Mr. David
Roxburgh is a director of Fitzwilton Limited (a company ultimately
controlled by Sir Anthony O'Reilly and Mr. Peter John Gouldandris),
which is a shareholder in ARCON. Because of the potential benefit
receivable under the Merger Offer by each of these companies, in their
respective capacities as a creditor and a shareholder of ARCON, the
Panel requested (on the basis of the information provided to it) that
Messrs McCarthy and Roxburgh consider exempting themselves from
membership of the Independent Committee. Both Mr. McCarthy and Mr.
Roxburgh have so exempted themselves. Therefore, while they participated
in the initial assessment of the Merger Offer, they did not participate
in the deliberations of the Independent Committee with respect to the
decision to recommend the Merger Offer.
Due to ill health, Mr. W. James Tilson has not participated in the
deliberations of either the Board of ARCON or the Independent Directors
with respect to the Merger Offer and he has also been exempted by the
Panel from the requirement to take responsibility for the information in
this Announcement for which the Board of ARCON and/or the Independent
Directors have taken respective responsibility.
The Independent Committee appointed Davy Corporate Finance to advise it
with respect to the Merger Offer.
7. Recommendation
The Independent Directors of ARCON, who have been so advised by Davy
Corporate Finance, consider the terms of the Merger Offer to be fair and
reasonable. In providing its advice, Davy Corporate Finance has taken
into account the commercial assessments of the Independent Directors of
ARCON. Accordingly, the Independent Directors intend unanimously to
recommend that ARCON Shareholders accept the Merger Offer. The
Independent Directors of ARCON intend to accept the Merger Offer in
respect of all of their own beneficial shareholdings of 308,717 ARCON
Shares in aggregate, representing approximately 0.18% of the existing
issued share capital of ARCON.
8. Irrevocable Undertakings and Letters of Intent
Lundin Mining has received an irrevocable undertaking from ARCON's
largest shareholder, Sir Anthony O'Reilly, to accept or procure the
acceptance of the Merger Offer, in respect of 64.11% of ARCON's existing
issued share capital. This irrevocable undertaking will cease to have
any effect (its other conditions which related to the making of the
Merger Offer and the timing thereof now having been satisfied) if the
Merger Offer has not become or been declared unconditional by 10 June
2005 or if the Merger Offer lapses or is withdrawn.
Lundin Mining has also received an irrevocable undertaking from Mr. Tony
O'Reilly Jnr to accept, or procure the acceptance of the Merger Offer,
in respect of 0.39% of ARCON's existing issued share capital. This
irrevocable undertaking will cease to have any effect (its other
conditions which related to the making of the Merger Offer and the
timing thereof now having been satisfied) if the Merger Offer has not
become or been declared unconditional by 10 June 2005 or if the Merger
Offer lapses or is withdrawn.
The other Directors of ARCON other than Mr. W. James Tilson who hold
ARCON Shares have signed non-binding letters of intent to accept the
Merger Offer in respect of all of the ARCON Shares owned or controlled
by them, representing approximately 0.18% of the existing issued share
capital of ARCON.
9. Information on ARCON
ARCON is an Irish mining and exploration company that is listed on the
Official Lists and admitted to trading on the Stock Exchanges. The main
asset of the company is the Galmoy mine located in County Kilkenny,
Ireland. The Galmoy mine, for the year ended 31 December 2004, produced
approximately 69,000 MT of zinc in concentrate and approximately 15,000
MT of lead in concentrate.
As announced in the unaudited Preliminary Results, which were released
today, as at 31 December 2004, ARCON Group cash was approximately EUR 4
million and total debt was approximately EUR 12.8 million. ARCON
reported turnover of approximately EUR 37.3 million and profit before
tax of approximately EUR 1.4 million for the year ended 31 December 2004.
10. Information on Lundin Mining
Overview of Lundin Mining
Lundin Mining Shares are listed on the Toronto Stock Exchange and
existing Lundin Mining SDRs are listed on the O-list of the Stockholm
Stock Exchange. Lundin Mining is a Canadian mining and exploration
company with a primary focus in Europe. As at 31 December 2004, Lundin
Mining had cash of approximately C$105 million and investments with a
market value approaching US$30 million.
The principal asset of Lundin Mining is the Zinkgruvan mine in Sweden.
The Zinkgruvan mine has been producing zinc, lead and silver on a
continuous basis since 1857, and currently has an estimated 11-year
reserve life with additional resources that could support mining for a
further 8 years. Lundin Mining also holds approximately 96.4% of the
shares in North Atlantic Natural Resources (NAN), a mining and
exploration company listed on the O-list of the Stockholm Stock
Exchange. NAN's primary asset is the Storliden copper and zinc mine in
Northern Sweden. Following a recent public offer made for the shares of
NAN not already owned by Lundin Mining (which, upon settlement, will
increase Lundin Mining's shareholding in NAN from 74% to 96.4%), Lundin
Mining intends to compulsorily acquire the outstanding shares in NAN.
For the year ended 31 December 2004, the Zinkgruvan mine produced
approximately 61,547 tonnes of zinc in concentrate at cash costs of
approximately US$0.23/lb of zinc, while Storliden produced 22,348 tonnes
of zinc in concentrate at cash costs of approximately US$0.11/lb zinc
(both net of by-product credits). Lundin Mining also holds a large
copper/gold exploration project in the Norrbotten Mining District in
northern Sweden.
In December 2004, Lundin Mining entered into an agreement with Silver
Wheaton Corporation ("Silver Wheaton"), whereby Lundin Mining agreed to
sell all of its silver production from the Zinkgruvan mine to Silver
Wheaton for an upfront cash payment of US$50 million, in addition to 6
million (post-consolidation) Silver Wheaton shares (ticker symbol: SLW
on the Toronto Stock Exchange), and 30 million Silver Wheaton warrants
(ticker symbol: SLW-W on the Toronto Stock Exchange), plus a per ounce
payment at a price equal to the lesser of (a) US$3.90 (subject to a
consumer price adjustment after three years) and (b) the prevailing
market price per ounce of silver. Each 5 warrants plus a payment of
CAD$4.00 entitles the holder to purchase one Silver Wheaton common share
up to and including 5 August 2009. As part of this arrangement Lundin
Mining has committed to a minimum of 40 million ounces of silver to be
delivered to Silver Wheaton over a 25-year period. If at the end of the
25-year period, Lundin Mining has not delivered the agreed 40 million
ounces, then it has agreed to pay to Silver Wheaton US$1.00 per ounce of
silver not delivered.
Lundin Mining's strategy
Lundin Mining's mission is to explore for and extract minerals in a
cost-efficient and environmentally responsible way, through wholly-owned
subsidiaries and affiliated companies. A balance between exploration and
producing assets will be achieved and maintained through internally
developed and acquired assets. Lundin Mining's vision is to maximise
shareholder value through building a significant mineral exploration and
mining company primarily focused on the Nordic region and Europe.
In order to realise Lundin Mining's vision, the Board of Lundin Mining
has decided to pursue the following strategy:
- Evaluate existing exploration projects as efficiently as possible.
- Acquire exploration rights for land areas known to contain mineral
deposits.
- Become a joint venture partner in exploration and producing projects
deemed commercially viable.
- Lundin Mining's ability to increase annual production of base metals
is mainly dependent on its capacity to commence new production based on
successful exploration, increase production from existing mines as well
as to improve current mining and production methods. Lundin Mining's
objective is growth through development of exploration deposits into
commercial operations and acquisition of profitable production assets
that meet Lundin Mining's focus. Lundin Mining's operations are carried
out with the ambition that all exploration and production are managed in
order to minimise the effect on the environment.
- Lundin Mining's positive cash flows combined with the fact that it
does not hold any significant long term debt supports its objective to
expand operations through acquisitions as well as development of
existing assets.
- Lundin Mining is aiming for an equity ratio of 65 percent and intends
to, as far as possible, finance future investments through internally
generated funds once this equity ratio has been reached.
Commercial logic of the Merger
The Board of Lundin Mining considers that there is strong commercial
logic in combining the businesses of Lundin Mining and ARCON, and that
the Enlarged Group will enjoy the following particular benefits:
- Enhanced position in base metals mining and increased exposure to base
metals prices going forward.
- Increased market position and purchasing power.
- Further diversification of mining operations.
- Increased and diversified exploration potential.
- Achieving efficiencies from sharing of technical experience and
expertise across the Enlarged Group, plus reducing the costs of some
overheads.
- The ability to provide employees with the benefits of being part of an
enlarged organisation with increased operational and financial resources.
11. Release of Guarantees / Security
Lundin Mining has agreed to procure the release of certain guarantees
and security provided by Sir Anthony O'Reilly and Indexia Holdings
Limited (a company controlled by Sir Anthony O'Reilly), which were
granted to ICC Bank (now Bank of Scotland) in connection with the Galmoy
mine compensation bond and mine closure bond issued by that bank.
Further information in relation to these arrangements, which have been
considered by the Panel, will be set out in the Offer Document.
12. Refinancing of Debt from Fairfield / Indexia
Facilities advanced by companies (Fairfield and Indexia) controlled by
Sir Anthony O'Reilly totalling approximately US$17.5 million (as at 31
December 2004) including accrued interest will be assumed by Lundin
Mining following completion of the Merger Offer.
Further information in relation to these arrangements, which have been
considered by the Panel, will be set out in the Offer Document.
13. Financing of the Merger Offer
The financing of the Merger Offer is being made from Lundin Mining's own
cash resources.
14. Directors, management and employees
Lundin Mining has given assurances to the Directors of ARCON that the
existing employment rights, including pension rights, of the employees
of the ARCON Group will be fully safeguarded.
Mr. Tony O'Reilly Jnr, non-executive Chairman of ARCON, will join the
Board of Lundin Mining as a non-executive director following completion
of the Merger.
All of the other Directors of ARCON, other than Mr. Peter Kidney who
will remain on the Board of ARCON, have agreed that, following the
Merger Offer becoming or being declared unconditional in all respects,
they will resign from the Board of ARCON.
15. Support Agreement
ARCON has entered into a Support Agreement with Lundin Mining dated 17
March 2005. Under this agreement, ARCON has agreed, inter alia, to pay
all of Lundin Mining's quantifiable third party costs and expenses
(inclusive of VAT) up to a maximum of one per cent of the value of the
Merger Offer. The expenses shall be payable if, having given their
recommendation of the Merger Offer, any of the Independent Directors
subsequently withdraws or adversely modifies their recommendation of the
Merger Offer in the event of a competing offer for ARCON and in such
event the Merger Offer lapses or is withdrawn. Other than in these
circumstances, in the event that the Independent Directors of ARCON
withdraw their recommendation, which they are entitled to do, no
financial penalty arises from such withdrawal under the terms of the
expense reimbursement arrangement. The terms of the expense
reimbursement arrangement have been approved by the Panel.
Davy Corporate Finance, the independent financial adviser to the
Independent Directors of ARCON, and the Independent Directors, have
confirmed in writing to the Panel, in accordance with Note 1 of Rule
21.2 of the Irish Takeover Rules, that in the respective opinions of the
Independent Directors of ARCON and Davy Corporate Finance, in the
context of the Merger Offer, the expense reimbursement arrangement is in
the best interests of ARCON Shareholders.
The Support Agreement contains a non-solicitation undertaking from ARCON
whereby ARCON has accepted certain restrictions on its ability to
solicit, encourage or otherwise seek to procure an approach from any
other potential offerors until the day on which the Merger Offer closes,
lapses or is withdrawn.
16. ARCON Share Option Schemes
The Merger Offer will extend to any ARCON Shares allotted or issued
pursuant to the exercise of options under the ARCON Share Option Schemes
while the Merger Offer remains open for acceptance. Appropriate
proposals will be made in due course to holders of options over ARCON
Shares.
17. Disclosure of Interests in ARCON
As at close of business on 17 March 2005 being the last practicable date
for this purpose prior to the date of this Announcement, Lundin Mining
and parties acting in concert with Lundin Mining did not own or control
any ARCON Shares nor do they hold any options to purchase any ARCON
Shares, nor do they have any arrangements in relation to any ARCON
Shares, nor have they entered into any derivative referenced to ARCON
Shares which remains outstanding.
18. Compulsory acquisition, de-listing and cancellation of trading
If the Merger Offer becomes or is declared unconditional in all respects
and sufficient acceptances have been received, Lundin Mining intends to
apply the provisions of section 204 of the Companies Act, 1963 to
acquire compulsorily any ARCON Shares not acquired or agreed to be
acquired pursuant to the Merger Offer or otherwise on the same terms as
the Merger Offer.
It is intended that, subject to and following the Merger Offer being
declared unconditional in all respects, and subject to any applicable
requirements of the Stock Exchanges or the UK Listing Authority, Lundin
Mining will procure that ARCON applies for cancellation of the listing
of the ARCON Shares on the Official Lists and for cancellation of
trading of ARCON Shares on the markets of the Stock Exchanges. It is
expected that such cancellations will take effect no earlier than 20
Business Days after the Merger Offer becomes or is declared
unconditional in all respects. De-listing would significantly reduce the
liquidity and marketability of any ARCON Shares in respect of which
acceptances of the Merger Offer are not submitted.
19. Consideration
The Cash Component of the consideration will, in relation to ARCON
Shareholders who validly accept the Merger Offer up to the time the
Merger Offer becomes or is declared unconditional in all respects, be
despatched not later than 14 days after the Merger Offer becomes or is
declared unconditional in all respects, or thereafter, so long as the
Merger Offer remains capable of acceptance, within 14 days of receipt of
acceptance of the Merger Offer.
Entitlements to Lundin Mining SDRs in respect of the Securities
Component of the consideration will, in relation to ARCON Shareholders
who validly accept the Merger Offer up to the time the Merger Offer
becomes or is declared unconditional in all respects, be credited not
later than 14 days after the Merger Offer becomes or is declared
unconditional in all respects, or thereafter, so long as the Merger
Offer remains capable of acceptance, within 14 days of receipt of
acceptance of the Merger Offer.
ARCON Shareholders will have the ability under the Merger Offer to elect
to receive cash consideration (that is, the Cash Component in respect of
their ARCON Shares and any amount they are entitled to pursuant to an
election for the Cash Alternative) in euro or sterling (if resident in a
Participating State or the United Kingdom respectively). In default of
election, the cash consideration will be paid in euro to ARCON
Shareholders resident in a Participating State and in sterling to ARCON
Shareholders resident in the United Kingdom. ARCON Shareholders resident
elsewhere will receive cash consideration in US dollars. The amount
payable will be calculated by reference to the relevant prevailing
US$/EUR , SEK/EUR , SEK/Pounds Sterling and US$/Pounds Sterling exchange
rates as determined by the Receiving Agent at the latest practicable
time for the relevant payment date. Further details in relation to this
facility will be contained in the Offer Document.
20. General
This Announcement does not constitute an offer or an invitation to offer
to purchase or subscribe for any securities and does not constitute an
offer of Lundin Mining Securities.
This Announcement is being made pursuant to Rule 2.5 of the Irish
Takeover Rules.
The Merger Offer will be subject to the applicable requirements of the
Irish Takeover Rules, the Irish Stock Exchange, the UK Listing Authority
and the London Stock Exchange.
Any person who is the holder of one per cent or more of ARCON Shares may
have disclosure obligations under Rule 8.3 of the Irish Takeover Panel
Act, 1997, Takeover (Amendment) Rules 2002, effective from the
commencement of the offer period in respect of the Merger Offer.
Macquarie Bank Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
Lundin Mining and no one else in connection with the Merger Offer for
ARCON and will not be responsible to anyone other than Lundin Mining for
providing the protections afforded to clients of Macquarie Bank Limited
or for giving advice in relation to the Merger Offer, the contents of
this Announcement or any transaction or arrangement referred to herein.
Davy Corporate Finance Limited, which is regulated in Ireland by the
Irish Financial Services Regulatory Authority, is acting for the
Independent Directors and for no one else in relation to the matters
described in this Announcement and will not be responsible to anyone
other than the Independent Directors for providing the protections
afforded to clients of Davy Corporate Finance Limited or for giving
advice in relation to the Merger Offer, the contents of this
Announcement or any transaction or arrangement referred to herein.
This Announcement has been approved, solely for the purposes of section
21 of the Financial Services and Markets Act 2000 of the UK, by
Macquarie Bank Limited of Levels 29 & 30, CityPoint, One Ropemaker
Street, London EC2Y 9HD, which is authorised and regulated in the United
Kingdom by the Financial Services Authority.
The full text of the conditions and reference to certain further terms
of the Merger Offer are set out in Appendix I and form part of this
Announcement and will be set out in full in the Offer Document. Appendix
II contains definitions of certain terms used in this Announcement. The
Offer Document will be despatched to ARCON Shareholders and, for
information only, to holders of options under the ARCON Share Option
Schemes, as soon as reasonably practicable and in any event within 28
days of the date of this Announcement.
The Directors of Lundin Mining accept responsibility for the information
contained in this Announcement, other than that relating to ARCON, the
ARCON Group, the Directors of ARCON and members of their immediate
families, related trusts and persons connected with them and other than
the recommendation and related opinions of the Independent Directors. To
the best of the knowledge and belief of the Directors of Lundin Mining,
who have taken all reasonable care to ensure that such is the case, the
information contained in this Announcement for which they accept
responsibility is in accordance with the facts and, does not omit
anything likely to affect the import of such information.
The Directors of ARCON, other than Mr. W. James Tilson, accept
responsibility for the information contained in this Announcement, other
than that relating to Lundin Mining, the Lundin Mining Group, the
Directors of Lundin Mining and members of their immediate families,
related trusts and persons connected with them except for the
recommendation and related opinions of the Independent Directors. To the
best of the knowledge and belief of the Directors of ARCON other than
Mr. W. James Tilson, who have taken all reasonable care to ensure that
such is the case, the information contained in this Announcement for
which they accept responsibility is in accordance with the facts and,
does not omit anything likely to affect the import of such information.
The Independent Directors accept responsibility for the recommendation
and the related opinions of the Independent Directors contained in this
Announcement. To the best of the knowledge and belief of the Independent
Directors, who have taken all reasonable care to ensure that such is the
case, the information contained in this Announcement for which they
accept responsibility is in accordance with the facts and, does not omit
anything likely to affect the import of such information.
Unless otherwise determined by Lundin Mining, the Merger Offer will not
be made directly or indirectly in, into or from Australia, Japan, South
Africa, the United States or any other jurisdiction where it would be
unlawful to do so, or by the use of the mails, or by any means or
instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce, or by any facility of
a national securities exchange of Australia, Japan, South Africa, the
United States or any other jurisdiction where it would be unlawful to do
so, and the Merger Offer will not be capable of acceptance by any such
means, instrumentality or facility from within Australia, Japan, South
Africa, the United States or any jurisdiction where it would be unlawful
to do so. Accordingly, unless otherwise determined by Lundin Mining,
neither copies of this Announcement nor any other documents related to
the Merger Offer are being, or may be, mailed or otherwise distributed
or sent in, into or from Australia, Japan, South Africa, the United
States or any other jurisdiction where it would be unlawful to do so and
persons receiving such documents (including custodians, nominees and
trustees) must not distribute or send them in, into or from Australia,
Japan, South Africa, the United States or any other jurisdiction where
it would be unlawful to do so, as doing so may invalidate any purported
acceptance of the Merger Offer. Notwithstanding the foregoing
restrictions, Lundin Mining reserves the right to permit the Merger
Offer to be accepted, if in its sole discretion, it is satisfied that
the transaction in question is exempt from or not subject to the
legislation or regulation giving rise to the restrictions in question.
APPENDIX I
Part A: Conditions of the Merger Offer
The Merger Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. (Dublin time) on the initial
closing date (or such later time(s) and/or date(s) as Lundin Mining may,
subject to the Irish Takeover Rules, decide) in respect of not less than
80 per cent (or such lower percentage as Lundin Mining may decide) in
nominal value of the ARCON Shares Affected, provided that this condition
shall not be satisfied unless Lundin Mining shall have acquired or
agreed to acquire (whether pursuant to the Merger Offer or otherwise)
ARCON Shares carrying in aggregate more than 50 per cent of the voting
rights then exercisable at a general meeting of ARCON.
For the purposes of this condition:
(i) any ARCON Shares which have been unconditionally allotted shall be
deemed to carry the voting rights they will carry upon their being
entered in the register of members of ARCON; and
(ii) the expression "ARCON Shares Affected" shall mean:
A. ARCON Shares which have been issued or unconditionally allotted on or
before the date the Merger Offer is made, excluding any ARCON Shares
which have been cancelled after the date on which the Merger Offer is
made; and
B. ARCON Shares which have been issued or unconditionally allotted after
the date the Merger Offer is made but before the time at which the
Merger Offer closes, or such earlier date as Lundin Mining may, subject
to the Irish Takeover Rules, decide (not being earlier than the date on
which the Merger Offer becomes unconditional as to acceptances or, if
later, the initial closing date), excluding any ARCON Shares which have
been cancelled after the date on which the Merger Offer is made;
but excluding any ARCON Shares which, on the date the Merger Offer is
made, are already in the beneficial ownership of Lundin Mining within
the meaning of section 204 of the Companies Act 1963;
(b) unless or to the extent otherwise agreed with the Panel, Admission
becoming effective or (if determined by Lundin Mining and subject to the
consent of the Panel) becoming effective subject only to (i) the
creation of such Lundin Mining SDRs and/or (ii) the Merger Offer
becoming or being declared unconditional in all respects;
(c) all of the ARCON Mining Licences, Access Rights or ARCON Planning
Permissions remaining in full force and effect, or, if applicable, being
obtained and there being no notice in writing of an intention to revoke
or adversely modify or not to renew the same at the time at which the
Merger Offer becomes otherwise unconditional or any adverse action being
taken thereunder by any ministerial or local authority (other than
adverse action which would not be material (in value terms or otherwise)
in the context of the Wider ARCON Group taken as a whole) and none of
the ARCON Mining Licences or ARCON Planning Permissions being terminated
or adversely modified and there being no material breach of the terms or
conditions of any of the ARCON Mining Licences or ARCON Planning
Permissions at the date on which the Merger Offer becomes otherwise
unconditional (except where the consequence of the material breach of
any such ARCON Mining Licence or ARCON Planning Permission would not be
material (in value terms or otherwise) in the context of the Wider ARCON
Group taken as a whole) provided that where any ARCON Planning
Permission is not in full force and effect, or there has been a notice
in writing of an intention to revoke or adversely modify or not to renew
the same at the time at which the Merger Offer becomes otherwise
unconditional (a "Default Event") then this condition will be treated as
satisfied unless the Default Event is material (in value terms or
otherwise) in the context of the Wider ARCON Group taken as a whole;
(d) no central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative body, including
any national anti-trust or merger control authorities, court, tribunal,
trade agency, professional association, environmental body, any
analogous body whatsoever or tribunal in any jurisdiction (each a "Third
Party") having decided to take, institute or implement any action,
proceeding, suit, investigation, enquiry or reference or having made,
proposed or enacted any statute, regulation or order or having withheld
any consent or having done or decided to do anything which would or
might reasonably be expected to:
(i) make the Merger Offer or its implementation, or the acquisition or
the proposed acquisition by Lundin Mining of any shares in, or control
of, ARCON, or any of the material assets of ARCON void, illegal or
unenforceable under the laws of any jurisdiction, or otherwise, directly
or indirectly, restrain, revoke, prohibit, materially restrict or
materially delay the same or impose additional or different conditions
or obligations with respect thereto (except for conditions or
obligations that would not be material (in value terms or otherwise) in
the context of the Wider ARCON Group taken as a whole) or otherwise
challenge or interfere therewith (except where the result of such
challenge or interference would not have, or would not reasonably be
expected to have, a material adverse effect on the Wider ARCON Group
taken as a whole);
(ii) result in a material delay in the ability of Lundin Mining, or
render Lundin Mining unable, to acquire some or all of the ARCON Shares
or require a divestiture by any member of the Wider Lundin Mining Group
of any shares in ARCON;
(iii) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group taken
as a whole) require, prevent or delay the divestiture by any member of
the Wider Lundin Mining Group or by any member of the Wider ARCON Group
of all or any portion of their respective businesses, assets (including,
without limitation, the shares or securities of any other member of the
ARCON Group) or property or (except where the consequences thereof would
not be material (in value terms or otherwise) in the context of the
Wider ARCON Group taken as a whole) impose any limitation on the ability
of any of them to conduct their respective businesses (or any of them)
or own their respective assets or properties or any part thereof;
(iv) impose any material limitation on or result in a material delay in
the ability of Lundin Mining to acquire, or to hold or to exercise
effectively, directly or indirectly, all or any rights of ownership of
shares (or the equivalent) in, or to exercise voting or management
control over, ARCON or (to the extent ARCON has such rights) any member
of the Wider ARCON Group which is material in the context of the Wider
ARCON Group taken as a whole or (except where the consequences thereof
would not be material (in value terms or otherwise) in the context of
the Wider ARCON Group taken as a whole) on the ability of any member of
the Wider ARCON Group to hold or exercise effectively, directly or
indirectly, rights of ownership of shares (or the equivalent) in, or to
exercise rights of voting or management control over, any member of the
Wider ARCON Group which is material in the context of the Wider ARCON
Group taken as a whole;
(v) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group, taken
as a whole) require any member of the Wider Lundin Mining Group or any
member of the Wider ARCON Group to acquire or offer to acquire any
shares or other securities (or the equivalent) in, or any interest in
any asset owned by, any member of the Wider ARCON Group owned by any
third party;
(vi) impose any limitation on the ability of any member of the ARCON
Group to integrate or co-ordinate its business, or any part of it, with
the businesses of any member of the Wider ARCON Group (except where the
consequences thereof would not be material (in value terms or otherwise)
in the context of the Wider ARCON Group taken as a whole);
(vii) result in any member of the Wider ARCON Group ceasing to be able
to carry on business in any jurisdiction in which it presently does so
(except where the consequences thereof would not be material (in value
terms or otherwise) in the context of the Wider ARCON Group taken as a
whole);
(viii) cause any member of the Wider ARCON Group to cease to be entitled
to any Authorisation (as defined in paragraph (e) below) used by it in
the carrying on of its business (except where the consequences thereof
would not be material (in value terms or otherwise) in the context of
the Wider ARCON Group, taken as a whole); or
(ix) otherwise materially adversely affect the business, profits,
assets, liabilities, financial or trading position of any member of the
Wider ARCON Group (except where the consequences thereof would not be
material (in value terms or otherwise) in the context of the Wider ARCON
Group taken as a whole);
(e) all necessary notifications and filings having been made, all
necessary waiting and other time periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction in which ARCON or any subsidiary or subsidiary undertaking
of ARCON which is material in the context of the ARCON Group taken as a
whole (a "Material Subsidiary") is incorporated or carries on business
which is material in the context of the Wider ARCON Group taken as a
whole having expired, lapsed or having been terminated (as appropriate)
(save to an extent which would not be material (in value terms or
otherwise) in the context of the Wider ARCON Group taken as a whole) and
all statutory or regulatory obligations in any jurisdiction in which
ARCON or a Material Subsidiary shall be incorporated or carry on
business which is material in the context of the Wider ARCON Group taken
as a whole having been complied with (save to an extent which would not
be material (in value terms or otherwise) in the context of the Wider
ARCON Group taken as a whole), in each case, in connection with the
Merger Offer or its implementation and all authorisations, orders,
recognitions, grants, consents, clearances, confirmations, licences,
permissions and approvals in any jurisdiction ("Authorisations" and each
an "Authorisation") reasonably deemed necessary by Lundin Mining for or
in respect of the Merger Offer having been obtained on terms and in a
form reasonably satisfactory to Lundin Mining from all appropriate Third
Parties, (except where the consequence of the absence of any such
Authorisation would not be material (in value terms or otherwise) in the
context of the Wider ARCON Group taken as a whole) all such
Authorisations remaining in full force and effect, there being no
written notice of an intention to revoke or vary or not to renew the
same at the time at which the Merger Offer become otherwise
unconditional and all necessary statutory or regulatory obligations in
any such jurisdiction having been complied with (except where the
consequence of the absence of any such Authorisation would not be
material (in value terms or otherwise) in the context of the Wider ARCON
Group taken as a whole);
(f) all applicable waiting periods and any other time periods during
which any Third Party could, in respect of the Merger Offer or the
acquisition or proposed acquisition of any shares or other securities
(or the equivalent) in, or control of, ARCON or any member of the Wider
ARCON Group by Lundin Mining, institute or implement any action,
proceedings, suit, investigation, enquiry or reference under the laws of
any jurisdiction which would be reasonably expected adversely to affect
(to an extent which would be material (in value terms or otherwise) in
the context of the Wider ARCON Group taken as a whole) any member of the
ARCON Group, having expired, lapsed or been terminated;
(g) except as disclosed, there being no provision of any arrangement,
agreement, licence, permit, franchise, facility, lease or other
instrument to which any member of the Wider ARCON Group is a party or by
or to which any such member or any of its respective assets may be
bound, entitled or be subject and which, in consequence of the Merger
Offer or the acquisition or proposed acquisition by Lundin Mining of any
shares or other securities (or the equivalent) in or control of, ARCON
or any member of the ARCON Group or because of a change in the control
or management of ARCON or otherwise, would or would be reasonably
expected to result (except where, in any of the following cases, the
consequences thereof would not be material (in value terms or otherwise)
in the context of the Wider ARCON Group taken as whole) in:
(i) any monies borrowed by, or any indebtedness or liability (actual or
contingent) of, or any grant available to any member of the Wider ARCON
Group becoming, or becoming capable of being declared, repayable
immediately or prior to their or its stated maturity;
(ii) the creation or enforcement of any mortgage, charge or other
security interest wherever existing or having arisen over the whole or
any part of the business, property or assets of any member of the Wider
ARCON Group or any such mortgage, charge or other security interest
becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise,
facility, lease or other instrument or the rights, liabilities,
obligations or interests of any member of the Wider ARCON Group
thereunder, or the business of any such member with, any person, firm or
body (or any arrangement or arrangements relating to any such interest
or business) being terminated or adversely modified or any adverse
action being taken or any obligation or liability arising thereunder;
(iv) any material assets or interests of, or any material asset the use
of which is enjoyed by, any member of the Wider ARCON Group being or
falling to be disposed of or charged, or ceasing to be available to any
member of the Wider ARCON Group or any right arising under which any
such asset or interest would be required to be disposed of or charged or
would cease to be available to any member of the Wider ARCON Group
otherwise than in the ordinary course of business;
(v) any member of the Wider ARCON Group ceasing to be able to carry on
business;
(vi) the value of, or financial or trading position of any Material
Subsidiary being prejudiced or adversely affected; or
(vii) the creation of any liability or liabilities (actual or
contingent) by any member of the Wider ARCON Group;
unless, if any such provision exists, such provision shall have been
waived, modified or amended on terms satisfactory to Lundin Mining;
(h) except as disclosed and/or save as publicly announced (by the
delivery of an announcement to the Irish Stock Exchange or the London
Stock Exchange or otherwise publicly disclosed in the ARCON Group annual
report for the year ended 31 December 2003) by ARCON, no member of the
Wider ARCON Group having, since 31 December 2003:
(i) issued or agreed to issue additional shares of any class, or
securities convertible into or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares or convertible or
exchangeable securities (except for (A) issues to ARCON or wholly-owned
subsidiaries of ARCON, or (B) upon any exercise of options under the
ARCON Share Option Schemes);
(ii) recommended, declared, paid or made any bonus, dividend or other
distribution other than bonuses, dividends or other distributions
lawfully paid or made to another member of the Wider ARCON Group;
(iii) (save for transactions between two or more members of the ARCON
Group ("intra-ARCON Group transactions")) made or authorised, proposed
or announced any change in its loan capital (save in respect of loan
capital which is not material (in value terms or otherwise) in the
context of the ARCON Group taken as a whole);
(iv) save for intra-ARCON Group transactions, implemented, authorised,
proposed or announced its intention to propose any merger, demerger,
reconstruction, amalgamation, scheme or (except in the ordinary and
usual course of trading) acquisition or disposal of (or of any interest
in) material assets or shares (or the equivalent thereof) in any
undertaking or undertakings (except in any such case where the
consequences of any such merger, demerger, reconstruction, amalgamation,
scheme, acquisition or disposal would not be material (in value terms or
otherwise) in the context of the ARCON Group taken as a whole);
(v) except in the ordinary and usual course of business entered into or
materially improved, or made any offer (which remains open for
acceptance) to enter into or improve, the terms of the employment
contract with any director of ARCON or any person occupying one of the
senior executive positions in the ARCON Group or permitted a variation
in the terms or rules governing the ARCON Share Option Schemes;
(vi) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the ARCON Group, taken as a
whole) issued or agreed to issue any loan capital or (save in the
ordinary course of business and save for intra-ARCON Group transactions)
debentures or incurred any indebtedness or contingent liability;
(vii) purchased, redeemed or repaid or announced any offer to purchase,
redeem or repay any of its own shares or other securities (or the
equivalent) or reduced or made any other change to any part of its share
capital;
(viii) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group taken
as a whole) (A) merged with any body corporate, partnership or business,
or (B) and save for intra-ARCON Group transactions acquired or disposed
of, transferred, mortgaged or encumbered any material assets or any
right, title or interest in any asset (including shares and trade
investments);
(ix) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group taken
as a whole), entered into or varied any contract, transaction,
arrangement or commitment or announced its intention to enter into or
vary any contract, transaction, arrangement or commitment (whether in
respect of capital expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude or which is or would be
materially restrictive on the business of any member of the Wider ARCON
Group;
(x) waived or compromised any claim which would be material (in value
terms or otherwise) in the context of the Wider ARCON Group taken as a
whole;
(xi) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group, taken
as a whole) been unable, or admitted in writing that it is unable, to
pay its debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or (except where the
consequences thereof would not be material (in value terms or otherwise)
in the context of the Wider ARCON Group taken as a whole) ceased or
threatened to cease to carry on all or a substantial part of any
business;
(xii) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group taken
as a whole) made or agreed to any significant change to the terms of the
trust deeds constituting the pension schemes established for its
directors and/or employees and/or their dependants or to the benefits
which accrue, or to the pensions which are payable thereunder, or to the
basis on which qualification for or accrual or entitlement to such
benefits or pensions are calculated or determined, or to the basis upon
which the liabilities (including pensions) of such pension schemes are
funded or made, or agreed or consented to any change to the trustees
involving the appointment of a trust corporation;
(xiii) (except where the consequences thereof would not be material (in
value terms or otherwise) in the context of the Wider ARCON Group taken
as a whole) and save for voluntary solvent liquidations, taken any
corporate action or had any legal proceedings instituted against it in
respect of its winding-up, dissolution, examination or reorganisation or
for the appointment of a receiver, examiner, administrator,
administrative receiver, trustee or similar officer of all or any part
of its assets or revenues, or (A) any analogous proceedings in any
jurisdiction, or (B) appointed any analogous person in any jurisdiction
in which ARCON or any Material Subsidiary shall be incorporated or carry
on any business which is material in the context of the ARCON Group
taken as a whole;
(xiv) entered into any agreement, contract or binding commitment or
passed any resolution or made any offer or announcement with respect to,
or to effect any of the transactions, matters or events set out in this
condition; or
(xv) except in the case of amendments to the memoranda or articles of
association of subsidiaries which are not material, amended its
memorandum or articles of association;
(i) except as disclosed and/or save as publicly announced by ARCON (by
delivery of an announcement to the Irish Stock Exchange or the London
Stock Exchange or otherwise publicly disclosed in the ARCON Group annual
report for the year ended 31 December 2003) on or prior to the issue of
this Announcement:
(i) there not having arisen any adverse change or deterioration in the
business, assets, financial or trading position or profits of ARCON or
any member of the Wider ARCON Group (save to an extent which would not
be material (in value terms or otherwise) in the context of the Wider
ARCON Group taken as a whole);
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider ARCON Group is or would
reasonably be expected to become a party (whether as plaintiff or
defendant or otherwise) and no investigation by any Third Party against
or in respect of any member of the Wider ARCON Group having been
instituted or remaining outstanding by, against or in respect of any
member of the ARCON Group (save where the consequences of such
litigation, arbitration proceedings, prosecution or other legal
proceedings or investigation are not or would not be material (in value
terms or otherwise) in the context of the Wider ARCON Group taken as a
whole);
(iii) no contingent or other liability existing or having arisen which
would reasonably be expected to affect adversely any member of the Wider
ARCON Group (save where such liability is not or would not be material
(in value terms) in the context of the Wider ARCON Group taken as a
whole); and
(iv) no steps having been taken which are likely to result in the
withdrawal, cancellation, termination or modification of any licence,
consent, permit, Access Right or authorisation held by any member of the
Wider ARCON Group which is necessary for the proper carrying on of its
business and which is material in the context of the Wider ARCON Group;
(j) except as disclosed, Lundin Mining not having discovered that any
financial, business or other information concerning the Wider ARCON
Group which is material in the context of the Wider ARCON Group taken as
a whole and which has been publicly disclosed, is materially misleading,
contains a material misrepresentation of fact or omits to state a fact
necessary to make the material information contained therein not
misleading (save where the consequences thereof would not be material
(in value terms or otherwise) in the context of the Wider ARCON Group
taken as a whole);
(k) except as disclosed and/or save as publicly announced (by delivery
of an announcement to the Irish Stock Exchange or the London Stock
Exchange or otherwise publicly disclosed in the ARCON Group annual
report for the year ended 31 December 2003) by ARCON on or prior to the
issue of this Announcement, Lundin Mining not having discovered:
(i) that any member of the Wider ARCON Group or any partnership, company
or other entity in which any member of the Wider ARCON Group has an
interest and which is not a subsidiary undertaking of ARCON is subject
to any liability, contingent or otherwise (save where such liability is
not or would not be material (in value terms or otherwise) in the
context of the Wider ARCON Group taken as whole);
(ii) in relation to any release, emission, discharge, disposal or other
fact or circumstance which has caused or reasonably might impair the
environment or harm human health, that any past or present member of the
Wider ARCON Group has acted in material violation of any laws, statutes,
regulations, notices or other legal or regulatory requirements of any
Third Party (except where the consequences thereof would not be material
(in value terms or otherwise) in the context of the ARCON Group, taken
as a whole);
(iii) that there is, or is likely to be, any liability, whether actual
or contingent, to make good, repair, reinstate or clean up any property
now or previously owned, occupied or made use of by any past or present
member of the Wider ARCON Group or any other property or any controlled
waters under any environmental legislation, regulation, notice,
circular, order or other lawful requirement of any relevant Authority
(whether by formal notice or order or not) or Third Party or otherwise
(save where such liability is not or would not be material (in value
terms or otherwise) in the context of the ARCON Group taken as a whole);
and
(iv) except as disclosed, that circumstances exist at the date the offer
is made which are likely to result in any actual or contingent liability
to any member of the Wider ARCON Group under any applicable legislation
referred to in sub-paragraph (iii) above to improve or modify existing
or install new plant, machinery or equipment or to carry out any changes
in the processes currently carried out (save where such liability is not
or would not be material (in value terms or otherwise) in the context of
the ARCON Group taken as a whole);
(l) except as disclosed, no member of the ARCON Group being in default
under the terms or conditions of any material facility or agreement or
arrangement for the provision of loans, credit or drawdown facilities,
or of any security, surety or guarantee in respect of any facility or
agreement or arrangement for the provision of loans, credit or drawdown
facilities to any member of the ARCON Group (save where such default is
not or would not be so material (in value terms or otherwise) in the
context of the ARCON Group taken as a whole);
(m) for the purposes of the conditions set out above:
(i) "ARCON Group" means ARCON and its subsidiaries and subsidiary
undertakings;
(ii) "disclosed" means fairly disclosed by or on behalf of ARCON in
writing (or in written form), to Lundin Mining or Macquarie or its
respective employees, officers or advisers at any time up to 18 March
2005 (being the date of this Announcement) or orally at formal due
diligence meetings between representatives of Lundin Mining and ARCON;
(iii) "initial closing date" means 3.00 p.m. (Dublin time) on the date
fixed by Lundin Mining as the first closing date of the Merger Offer,
unless and until Lundin Mining in its discretion shall have extended the
initial offer period, in which case the term "initial closing date"
shall mean the latest time and date at which the initial offer period,
as so extended by Lundin Mining, will expire or, if earlier, the date on
which the Merger Offer become or are declared unconditional in all
respects;
(iv) "initial offer period" means the period from the date of the Merger
Offer Document to and including the initial closing date;
(v) "parent undertaking", "subsidiary undertaking", "associated
undertaking" and "undertaking" have the meanings given by the European
Communities (Companies: Group Accounts) Regulations, 1992;
(vi) "substantial interest" means an interest in 20 per cent or more of
the voting equity capital of an undertaking;
(vii) "Wider ARCON Group" means ARCON or any of its subsidiaries or
subsidiary undertakings or associated companies (including any joint
venture, partnership, firm or company or undertaking in which any member
of the Lundin Mining Group (aggregating their interests) is interested)
or any company in which any such member has a substantial interest; and
(viii) "Wider Lundin Mining Group" means Lundin Mining or any of its
subsidiaries or subsidiary undertakings or associated companies
(including any joint venture, partnership, firm or company or
undertaking in which any member of the Lundin Mining Group (aggregating
their interests) is interested) or any company in which any such member
has a substantial interest.
Subject to the requirements of the Panel, Lundin Mining reserves the
right (but shall be under no obligation) to waive, in whole or in part,
all or any of the above conditions apart from conditions (a) and (b).
The Merger Offer will lapse unless all of the conditions set out above
have been fulfilled or (if capable of waiver) waived or, where
appropriate, have been determined by Lundin Mining to be or to remain
satisfied on the day which is 21 days after the later of: (i) the
initial closing date, (ii) the date on which condition (a) is fulfilled
or (iii) such later date as Lundin Mining may, with the consent of the
Panel (to the extent required) decide. Except for condition (a), Lundin
Mining shall not be obliged to waive (if capable of waiver) or treat as
satisfied any condition by a date earlier than the latest day for the
fulfilment of all conditions referred to in the previous sentence,
notwithstanding that any other condition of the Merger Offer may at such
earlier date have been waived or fulfilled or that there are at such
earlier dates no circumstances indicating that the relevant condition
may not be capable of fulfilment.
Part B: Illustrative Financial Effects of Acceptance of the Merger Offer
The following table sets out, FOR ILLUSTRATIVE PURPOSES ONLY AND ON THE
BASES AND ASSUMPTIONS SET OUT BELOW, the potential financial effects of
acceptance of the Merger Offer on capital value and gross income for an
accepting ARCON Shareholder if the Merger Offer becomes or is declared
unconditional in all respects.
/T/
(a) Increase in capital value Notes
Market value of 100 ARCON Shares (i) EUR 46.00
Cash Consideration for every 100
ARCON Shares (ii) EUR 27.08
Value of 3.2196 Lundin Mining SDRs (iii),(iv) EUR 25.15
Total value of consideration EUR 52.23
Increase in capital value EUR 6.23
This represents an increase in capital value
of approximately 13.54%
(b) Increase in gross income Notes
Gross income on 100 ARCON Shares (v) Nil
Gross income from 3 Lundin Mining SDRs (vi) Nil
Gross income from reinvestment of cash
consideration (vii) EUR 0.95
Total gross income from consideration EUR 0.95
Increase in gross income EUR 0.95
/T/
Notes:
(i) The value of one ARCON Share is based on the Closing Price per ARCON
Share of EUR 0.46 on 16 March 2005 (being the latest practicable date
prior to the issue of this Announcement).
(ii) The cash consideration is based on the euro equivalent per ARCON
Share of US$0.362198 in cash per ARCON Share based on the US$/EUR
exchange rate of US$1: EUR 0.74778 on 16 March 2005.
(iii) The value for the Lundin Mining SDRs is based on the Closing Price
per Lundin Mining SDR of SEK71 on 16 March 2005 (being the latest
practicable date prior to the issue of this Announcement) converted to
euro based on the SEK1/EUR 0.11001 exchange rate on 16 March 2005).
(iv) This includes the value of any fractional entitlements to Lundin
Mining SDRs which, under the terms of the Merger Offer, will be
aggregated and sold in the market for the benefit of the relevant ARCON
Shareholders.
(v) ARCON has paid no dividends.
(vi) Lundin Mining has paid no dividends. Fractional entitlements to
Lundin Mining SDRs will not be allocated under the Merger Offer.
(vii) This is an illustrative reinvestment assumption only. The gross
income from the re-investment of the cash consideration has been
calculated on the assumption that the cash is re-invested so as to yield
3.51% per annum, being the longest dated euro-denominated Irish
Government bond with a maturity of April 2013, as obtained from the
Financial Times on 16 March 2005 (the last practicable date prior to the
issue of this Announcement).
(viii) No account has been taken of any potential liability to taxation.
(ix) No assumption has been made with respect to the Cash Alternative.
BASES AND SOURCES
(a) The information on the Lundin Mining Group in this announcement is
extracted from the Annual Report and Accounts of Lundin Mining for the
five years ended 31 December 2003 and the interim results for the twelve
months ended 31 December 2004.
(b) The audited financial information on the ARCON Group is extracted
from the Annual Report and Accounts of ARCON for the three financial
years ended 31 December 2003 and the unaudited financial information on
the ARCON Group is extracted from the preliminary results for the twelve
months ended 31 December 2004.
(c) The value of the Merger Offer is based upon there being 173,938,282
ARCON Shares in issue and 4,883,844 ARCON Shares issuable to holders of
options under the ARCON Share Option Schemes in issue in each case as at
16 March 2005 (being the last practicable date prior to the issue of
this Announcement).
(d) As at 16 March 2005, there are 34,732,667 existing Lundin Mining
Shares in issue. Following the compulsory acquisition of the remaining
shares in NAN not owned by Lundin Mining, Lundin Mining is expected to
have issued approximately 1,313,396 Lundin Mining SDRs to shareholders
in NAN.
(e) The prices of existing Lundin Mining SDRs are sourced from the
O-list of the Stockholm Stock Exchange, unless otherwise stated, and the
prices of Lundin Mining Shares are sourced from the Toronto Stock
Exchange, unless otherwise stated.
(f) The prices of ARCON Shares are sourced from the Official List of the
Irish Stock Exchange, unless otherwise stated.
(g) All US$/SEK/StgPounds Sterling/EUR exchange rates for a particular
time and/or date prior to the date of this Announcement are European
Central Bank Euro Foreign Exchange Reference Rates, sourced from
www.ecb.int.
(h) Amounts referred to in this Announcement as having been converted to
euro as at 16 March 2005 have been converted at the following exchange
rates:
US$1: EUR 0.74778; and
SEK1: EUR 0.11001.
APPENDIX II
Definitions
In this Announcement, unless the context otherwise requires the
following expressions have the following meaning:
/T/
"Admission" the admission of the Lundin Mining SDRs
created in connection with the Merger Offer to
the O-list of the Stockholm Stock Exchange and
the admission of the underlying Lundin Mining
Shares to the Toronto Stock Exchange becoming
effective;
"Access Rights" all rights of access which are required by
ARCON to exploit the ARCON Mining Licences;
"ARCON" ARCON International Resources P.l.c.;
"ARCON Group" ARCON, its subsidiaries and associated
undertakings;
"ARCON Mining
Licences" the mining licences under which ARCON operates
at Galmoy mine, details of the principal terms
of which will be set out in the Offer Document;
"ARCON Planning
Permissions" the planning permissions granted to ARCON;
"ARCON Shareholders" holders of ARCON Shares;
"ARCON Shareholding" the ARCON Shares owned by an ARCON
Shareholder;
"ARCON Shares" the existing issued and unconditionally
allotted, fully paid ordinary shares of EUR
0.10 each in the capital of ARCON and any such
further shares which may be issued and
unconditionally allotted prior to the date on
which the Merger Offer closes or, subject to
the Irish Takeover Rules, such earlier date as
Lundin Mining may decide and each an "ARCON
Share";
"ARCON Share Option
Schemes" means the ARCON 1986 Share Option Scheme
(which has now expired) and the ARCON 1997
Share Option Scheme;
"ARCON Share Options" means options granted under the ARCON Share
Option Schemes;
"Australia" the Commonwealth of Australia, its
possessions, territories and all areas
subject to its jurisdiction and political sub-
divisions thereof;
"Business Day" a day, not being a Saturday or Sunday, on
which the banks in Dublin and London are
open for business;
"CAD$" Canadian dollars;
"Cash Alternative" means the cash alternative facility referred
to in this Announcement whereby all ARCON
Shareholders may elect to receive an amount in
cash equivalent to the full value of the
Merger Offer per ARCON Share in respect of the
first 1,000 ARCON Shares registered in each
ARCON Shareholder's name;
"Cash Component" US$36.2198 in cash which each holder of 100
ARCON Shares, who validly accepts the Merger
Offer, shall be entitled to receive under the
terms of the Merger Offer and so on in
proportion for any greater or lesser number of
ARCON Shares held;
"Closing Price" the official closing price or closing middle
market quotation, as appropriate, of a ARCON
Share as derived from the Official List or an
Lundin Mining Share as derived from the
official list of the Toronto Stock Exchange or
an existing Lundin Mining SDR as derived from
the O-list of the Stockholm Stock Exchange;
"Common Share" a common share without par or nominal value in
the capital of Lundin Mining;
"Davy Corporate
Finance" Davy Corporate Finance Limited, a private
limited company incorporated in Ireland;
"Directors" the directors of ARCON or of Lundin Mining, as
the context so requires;
"Enlarged Group" Lundin Mining Group as enlarged by the Merger
following completion of the Merger Offer;
"Euro" or "EUR"
"cent" or "c" the currency introduced on 1 January 1999
pursuant to the treaty establishing the
European Community;
"Fairfield" Fairfield Holdings Limited, a private
company incorporated in Cyprus and wholly
owned and controlled by Sir Anthony
O'Reilly;
"FSMA" the Financial Services and Markets Act 2000 of
the United Kingdom;
"Independent
Committee" the committee of the Board of ARCON, comprises
of the Independent Directors, established for
the purposes of considering and, if
appropriate, recommending the Merger Offer;
"Independent
Directors" the directors of ARCON other than Mr. Tony
O'Reilly Jnr, Mr. James S. D. McCarthy, Mr.
David Roxburgh and Mr. W. James Tilson;
"Indexia" Indexia Holdings Limited, a private company
wholly owned and controlled by Sir Anthony
O'Reilly;
"Initial
Announcement" the announcement made by Lundin Mining and
ARCON relating to a possible offer, dated
3 March 2005;
"Ireland" Ireland, excluding Northern Ireland;
"Irish Stock
Exchange" The Irish Stock Exchange Limited;
"Irish Takeover
Rules" the Irish Takeover Panel Act 1997, Takeover
(Amendment) Rules 2002 and the Irish Takeover
Panel Act 1997, Substantial Acquisition
Rules, 2001 or any of them as the context may
require;
"Japan" Japan, its cities and prefectures, territories
and possessions;
"Listing Rules" means the Irish Listing Rules and the Listing
Rules of the UK Listing Authority;
"London Stock
Exchange" London Stock Exchange plc;
"Lundin Mining" Lundin Mining Corporation;
"Lundin Mining Group" Lundin Mining, its subsidiaries and associated
undertakings;
"Lundin Mining SDRs" Lundin Mining Swedish Depository Receipts,
each of which represents one Common Share in
Lundin Mining;
"Lundin Mining
Securities" Lundin Mining Shares and Lundin Mining SDRs;
"Lundin Mining Share" a Common Share;
"Macquarie" Macquarie Bank Limited;
"Merger" the proposed merger of Lundin Mining and
ARCON;
"Merger Offer" the recommended offer by Lundin Mining for the
ARCON Shares and (where the context so
requires) any revision, variation or renewal
thereof and extension thereto;
"MT" metric tonnes;
"NAN" North Atlantic Natural Resources AB (publ);
"Offer Document" the document detailing the terms and
conditions of the Merger Offer to be
circulated to ARCON Shareholders and for
information to holders of ARCON Share
Options;
"Offer Period" means the period commencing on 3 March 2005
(the date of the announcement of the possible
offer for ARCON by Lundin Mining) and ending
on the initial closing date (as defined in
paragraph (m)(iii) of Appendix I) or, if
later, the time at which the Merger Offer
becomes unconditional as to acceptances or
lapses, whichever occurs first;
"Official Lists" means the Official List of the Irish Stock
Exchange and/or the Official List of the UK
Listing Authority as the context so requires;
"Panel" the Irish Takeover Panel established under the
Irish Takeover Panel Act 1997;
"Participating
States" participating member states of the European
Union as defined in Recital (2) of Council
Regulation 974/98/EC;
"Preliminary
Results" the unaudited consolidated results of ARCON
for the twelve months ended 31 December 2004
announced on the date of this Announcement;
"Receiving Agent" Capita Corporate Registrars Plc;
"SDRs" Swedish Depository Receipts;
"Securities
Component" the 3.2196 Lundin Mining SDRs which each
holder of 100 ARCON Shares, who validly
accepts the Merger Offer, shall be entitled
to receive under the terms of the Merger Offer
and so on in proportion for any greater or
lesser number of ARCON Shares held;
"SEK" Swedish kronor;
"StgPounds Sterling" the lawful currency of the United Kingdom;
"Stock Exchanges" the Irish Stock Exchange and the London Stock
Exchange;
"Stockholm Stock
Exchange" Stockholmborsen;
"Support Agreement" the agreement dated 17 March 2005 between
ARCON and Lundin Mining in relation to expense
reimbursement, the principal terms of which
are summarised in section 15 of this
Announcement;
"UK Listing
Authority" the Financial Services Authority of the United
Kingdom acting in its capacity as competent
authority for the purposes of Part VI of FSMA;
"United Kingdom "
or "UK" the United Kingdom of Great Britain and
Northern Ireland;
"United States"
or "US" the United States of America, its territories
and possessions, any state of the United
States of America and the District of Columbia
and all other areas subject to its
jurisdiction or any political subdivision
thereof;
"US$" US dollars;
"US Securities Act" the United States Securities Act of 1933, as
amended, updated and superseded from time to
time;
/T/
Any references to "subsidiary undertaking", "associated undertaking" and
"undertaking" have the meanings given by the European Communities
(Companies: Group Accounts) Regulations, 1992.
Any reference to "subsidiary" has the meaning given to it by section 155
of the Companies Act, 1963.
Any references to any provision of any legislation shall include any
amendment, modification, re-enactment or extension thereof. Any
reference to any legislation is to Irish legislation unless specified
otherwise.
Words importing the singular shall include the plural and vice versa and
words importing the masculine shall include the feminine or neuter
gender.
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FOR FURTHER INFORMATION PLEASE CONTACT: Lundin Mining Corporation Karl-Axel Waplan Exec. V.P. Operations +46 705 104 239 +46 8 545 074 71 (FAX) Website: www.lundinmining.com or Lundin Mining Corporation Sophia Shane Investor Relations +1 604 689 7842 +1 604 689 4250 (FAX) |
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