Eurozinc Mining and Lundin Mining to merge to create premier CuZn producer

first_imgEuroZinc Mining Corp and Lundin Mining Corp today announced that they have entered into a definitive agreement to merge the two companies to create a new global mining company. The combined company will be called Lundin Mining Corp and will have a market capitalization of some $3.0 billion, creating one of the North American and European markets’ premier, diversified copper and zinc producers. The combined company, upon closing, will remain listed on the Toronto, OMX (Stockholm) and AMEX (application required) stock exchanges.The merger creates a diversified copper/zinc producer with four profitable mines in Portugal, Sweden and Ireland; with a fifth, Aljustrel, to commence production in the second half of 2007. IM, recently visited the Portuguese operations of Neves-Corvo and Aljustrel and will report on them in January.Annual production will be about 205,000 t of contained zinc, 90,000 t of contained copper, 80,000 t of contained lead and 6 Moz of contained silver.Colin K. Benner, Vice-Chairman and CEO of EuroZinc, stated: “This merger adds significantly to both EuroZinc and Lundin Mining’s operating bases. By combining the two companies, our collective strengths will allow us to further improve the significant operating cash flow from each of the operations. The combined financial strength and collective expertise of our talented personnel will allow the new company to pursue global growth opportunities and fill the market void in the mid-tier mining sector. This combination of companies will increase shareholder value and provide greater sustainability for the future. We are very pleased and excited about the possibilities this merger affords our collective shareholders and see this as a major step in building a world-class mining house.”Karl-Axel Waplan, President and CEO of Lundin Mining, added: “The combined strengths of Lundin Mining and EuroZinc will allow an acceleration of both companies’ aggressive growth strategies. The combined company will have a world-class portfolio of mining projects, the support of extensive shareholder bases in both North America and Europe, a very strong financial position with excellent cash flow, and a highly motivated management team – creating an exciting, powerful platform for rapid growth. We have a clear vision of where we want the combined company to go and we intend to both maximize our existing assets and also continue to pursue other world-class opportunities globally with the clear objective of creating value for our shareholders in both the short and the long term.”All of the combined company’s mines are located in stable European jurisdictions: Portugal, Sweden, and Ireland. The combined company will directly employ approximately 1,500 people. In addition to its breadth of operations, the combined company will have an extensive exploration and development portfolio. Each of the existing mines is located within large land packages in prolific base metal belts. Furthermore, through the proposed addition of the Metropol joint venture in Russia, the combined company will own or have an ownership interest in four of the world’s fifteen largest zinc deposits. The combined management team is highly confident in the combined company’s ability to grow from its present portfolio through both acquisitions and organic opportunities.Benner will become Vice Chairman and CEO of the combined company and remain based in Vancouver. Waplan will become President and COO of the combined company and remain based in Stockholm. Both EuroZinc and Lundin Mining will be equally represented on the board of the combined company which, along with Benner, will include Lukas Lundin as Chairman.last_img read more