 | Lundin Mining Corporation - LUN.t is a diversified base metals mining company with operations and projects in Portugal, Sweden, Spain and the U.S.A producing copper, zinc, lead and nickel. Lundin Mining holds a 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the DRC. |  |
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Lundin Mining Corporation (TSX:LUN) (OMX:LUMI) ("Lundin Mining", "Lundin" or the "Company") is pleased to announce that it has entered into a purchase agreement with an affiliate of Freeport-McMoRan Inc. ("Freeport") to purchase an interest in Freeport's stake in the Timok project located in Serbia. The high grade copper-gold Cukaru Peki deposit is situated on one of the four mineral licenses comprising the Timok project. The project partners are currently Freeport, who is operator of the project, and an affiliate of Reservoir Minerals Inc. ("Reservoir") which holds a minority stake in the project and has certain transfer rights as a result of the proposed transaction.Total consideration of up to US$262,500,000 is payable in stages upon the achievement of key development milestones defined under the purchase agreement, as more particularly described below.
The transaction is subject to Reservoir's right of first offer ("ROFO"), as well as other customary closing conditions. Prior to entry into the purchase agreement, a ROFO notice was provided today by Freeport to Reservoir, and is open for acceptance by Reservoir for 60 days from the receipt of notice. If the ROFO is not exercised by Reservoir, the transaction is expected to close in the second quarter of 2016.
Mr. Paul Conibear, President and CEO commented, "The acquisition of an interest in the Timok project is consistent with our growth criteria that we have rigorously followed over the last few years. This high quality copper/gold project fits ideally within our overall asset base of operations in the Americas and Europe. This transaction enables the existing Freeport/Reservoir partnership to leverage our proven underground base metals development, construction and operating skill sets to advance the Timok project into operation in a timely manner. The Timok project is expected to enhance the Company's long term copper growth pipeline, while preserving our strong balance sheet. We are very pleased to be able to extend our partnership with Freeport and we intend to advance a meaningful and cooperative relationship with Reservoir to the benefit of all stakeholders including those in Serbia."
Transaction Terms
Under the purchase agreement, and subject to Reservoir's ROFO, Lundin will acquire (1) 100% of Freeport's interest in the upper zone of the Cukaru Peki deposit which is characterized by high grade massive and semi-massive sulphide mineralization (the "Upper Zone"), as well as Freeport's interest in all the mineral licenses comprising the Timok project, and (2) 28% of Freeport's interest in the lower zone of the Cukaru Peki deposit which is characterized by porphyry-style mineralization (the "Lower Zone"). Freeport will retain the remaining interest in the Lower Zone. In addition, Freeport has the option to have any new large mineral deposit containing at least four million tonnes of contained copper equivalent characterized in the same manner as the Lower Zone upon the payment to Lundin of two times drilling, study and other similar costs plus other direct costs such as land acquisition costs.
As part of the transaction, Lundin will be appointed as operator of the Timok project until the occurrence of certain events and Lundin will advance the development of both the Upper Zone and the Lower Zone in accordance with approved budgets and work programs. Lundin will have the sole right to propose budgets and work programs relating to the Upper Zone and for certain agreed Lower Zone work, and Freeport will have the sole right to propose budgets and work programs relating to the Lower Zone, subject to specified exceptions.
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http://canadastockjournal.blogspot.com/2016/03/lundin-mining-corporation-lunt.html
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