to Become Canada's Newest Senior Copper Producer With Financial Strength and
Track Record to Execute Leading Copper-Growth Strategy
CANADA--(Marketwire - Jan. 12, 2011) - Inmet Mining Corporation ("Inmet")
(TSX:IMN) and Lundin Mining Corporation ("Lundin")
(TSX:LUN)(OMX:LUMI) today announced that they have entered into an
arrangement agreement (the "Arrangement Agreement") to merge, and
create Symterra Corporation ("Symterra"), a leading international
copper producer. The transaction is valued at approximately C$9 billion.
the terms of the Arrangement Agreement, each Inmet shareholder will receive
3.4918 shares of Symterra, and each Lundin shareholder will receive 0.3333
shares of Symterra for each share held. The number of issued and
outstanding shares of each party that will be exchanged for common shares of
Symterra at closing is expected to be 61,549,172 for Inmet and 580,745,911
for Lundin. The exchange ratio represents no premium to either party
based on the 30 day volume weighted average price (VWAP) on the Toronto Stock
Exchange ("TSX") for each of Inmet and Lundin to January 11,
dollar figures are in US$, unless otherwise specified.
base of low cost, long life mines: Five low-cost, long-life mines located in
Europe. Substantial pro forma cash flow generation ensures future growth
world class copper development projects: With development of Cobre Panama and attributable
copper from possible expansions at Tenke Fungurume, Symterra will have the
potential to produce over 500,000 tonnes of copper annually1 by
2017 at costs within the lowest quartile.
Robust cash flow generation
in a company with substantial opening cash: Symterra
will have a pro forma cash balance of $1.3 billion2, substantial
cash flow generation, and no debt.
Diversified metal production:
with the added attraction of exposure to zinc and other base
metal markets from existing operations and through the existing asset
Shared commitment to
corporate responsibility: Both Inmet and Lundin
recognize the ability to develop the necessary social license to operate
through a commitment to social responsibility and sustainable development as
a key to success. The shared values, systems and experience in this area will
be a competitive advantage in creating long term value for shareholders.
Doubling of market
capitalization to C$9 billion: should enhance trading
liquidity, supported by listings on both the TSX and the OMX Nordic exchange.
Inmet and Lundin have respected and successful management teams. This
will enable Symterra to select a very strong team with an excellent track
record of acquiring, developing and operating mines.
Lukas Lundin, Chairman of Lundin commented "The long-term
fundamentals for copper are compelling. With solid operating assets and
the ability to fund its world class growth projects, Symterra provides one of
the best growth profiles for copper amongst major mining
companies, combined with attractive exposure to zinc and other
metals. I am excited about the value that will be generated for our
Jochen Tilk, President and CEO of Inmet stated "By
merging Lundin and Inmet, we diversify our production base, and significantly
strengthen earnings and our capital base, enabling us to grow the
"Symterra will have a series of long-life, low cost mines
in favourable mining jurisdictions and two world class growth projects in
Cobre Panama and the expanded Tenke Fungurume. The increased critical
mass enables us to not only develop our current projects, but also to compete
for future opportunities as they arise.
"I am proud to say that, by merging these two great
companies, we're up to the challenge of being a leader in the copper business
in the next decade," Mr. Tilk said.
MANAGEMENT TEAM and BOARD OF
Mr. Lukas Lundin will become non-executive Chairman and Mr.
Jochen Tilk will be the President and CEO of Symterra.
The Board will initially comprise ten directors, who are
nominated as follows:
Lukas H. Lundin,
Jochen Tilk, President and
David R. Beatty, Vice Chair
Paul E. Gagné
Thomas E. Mara
William A. Rand
The proposed merger will be effected by way of a Plan of
Arrangement completed under the Canada Business Corporations Act. It
will feature a common share exchange through which Inmet common shareholders
will receive 3.4918 common shares of the merged company for each common share
of Inmet they own and each Lundin common shareholder will receive 0.3333
common shares of the merged company for each common share of Lundin they
own. The exchange ratio represents no premium to either party based on
the 30 day volume weighted average price (VWAP) on the TSX for each of Inmet
and Lundin to January 11, 2011.
There is significant overlap between shareholders of Inmet and
shareholders of Lundin so that continuing shareholders of both companies
represent well in excess of 50% of the merged entity.
Completion of the proposed merger is conditional on approval
of Inmet and Lundin shareholders, and satisfaction of other customary
approvals including regulatory, stock exchange, and court approvals. The
required shareholder approval will be two thirds of the votes cast by each of
the holders of Inmet and Lundin common shares at shareholder meetings held to
consider the proposed merger. Shareholder meetings for Inmet and Lundin
are expected to be held on or about March 14, 2011.
The Arrangement Agreement includes customary reciprocal deal
protections. Each party has agreed not to solicit any alternative
transactions. Each company has agreed to pay the other a break fee of
C$120 million in certain circumstances. In addition, each company has
granted the other a right to match any competing offer.
Both Boards of Directors have determined that the proposed
merger is in the best interest of their respective companies based on a
number of factors, including fairness opinions received from their financial
advisors, and have unanimously approved the terms of the proposed merger and
recommend that their respective shareholders vote in favour of the proposed
The largest shareholder of each of Inmet (Leucadia,
representing 17.94% of Inmet) and Lundin (Lukas Lundin and Lundin family
trusts, representing 12.32% of Lundin) has executed an agreement to vote
their shares in favour of the proposed merger subject to customary fiduciary
waivers in the case of a superior offer. The directors of each company
have agreed to vote their shares in favour of the merger.
Full details of the proposed transaction will be included in
the Arrangement Agreement and joint management information circular to be
filed with the regulatory authorities and mailed to Inmet and Lundin
shareholders in accordance with applicable securities laws.
ADVISORS AND COUNSEL
Inmet's financial advisors are CIBC World Markets Inc. and
Rothschild Inc. and its legal counsel is Torys LLP. CIBC provided an
opinion to Inmet's Board of Directors and Dundee Securities Corporation
provided an opinion to the Special Committee of Inmet's Board of Directors
that, as of the date thereof and subject to the assumptions, limitations and
qualifications set out therein, the exchange ratio is fair, from a financial
point of view, to the shareholders of Inmet.
Lundin's financial advisor to management is Scotia Capital
Inc. and it legal counsel is Cassels Brock and Blackwell LLP. Scotia
provided an opinion to Lundin's Board and Haywood Securities Inc. provided an
opinion to Lundin's Special Committee of the Board of Directors that, as of
the date thereof and subject to the assumptions, limitations and
qualifications set out therein, the exchange ratio is fair, from a financial
point of view, to the shareholders of Lundin.
CONFERENCE CALL AND WEBCAST
Inmet and Lundin will host a joint conference call and webcast
tomorrow, January 13, 2011, at 8:00 am EST, for members of the investment
community to discuss the merger. Details are as follows:
+1 416-340-2216, Toll Free
(North America) 1-866-226-1792
+1 905-694-9451, Toll Free
(North America) 1-800-408-3053
Pass code: # 7608600
Webcasts will be available at http://events.digitalmedia.telus.com/inmet/011311/index.php
and on both the Inmet and Lundin websites (www.inmetmining.com and www.lundinmining.com) with the
presentation to be posted immediately before the webcast. Webcasts will be
archived on the websites consistent with company disclosure policy.
include Lundin 24% equity interest in Tenke Fungurume, and are based on
Lundin forecast expansion; Inmet production estimates assume 80% of Cobre
Panama production, as per the Front End Engineering and Design (FEED) study
(AMEC Americas Limited, March 2010).
Pro-forma cash based on
financial statements dated September 30th, 2010, does not include any
assumption of Temasek private placement. Other adjustments were made to
reflect publicly disclosed transactions involving Las Cruces, Ok Tedi and
the sale of shares in Premier Gold.
Inmet is a Canadian-based global mining company that produces
copper, zinc and gold. Inmet has interests in four mining operations in
locations around the world: Çayeli, Las Cruces, Pyhäsalmi and Ok
Tedi. Inmet also has a 100 percent interest in Cobre Panama, a
development property in Panama.
Lundin is a diversified base metals mining company with
operations in Portugal, Spain and Sweden, producing copper, nickel, lead and
zinc. In addition, Lundin holds a development project pipeline which includes
expansion projects at its Zinkgruvan and Neves Corvo mines along with its
equity stake in the world class Tenke Fungurume copper/cobalt project in the
Democratic Republic of Congo.
Securities regulators encourage companies to disclose
forward-looking information to help investors understand a company's future
prospects. This press release contains forward-looking
information. These are "forward-looking" because we have used
what we know and expect today to make a statement about the future.
Forward-looking statements usually include words such as may, expect,
anticipate, and believe or other similar words. Capital and operating cost
estimates, production estimates, and other estimates are forward-looking
statements, and are based on assumptions that we believe to be
reasonable. However, actual events and results could be substantially
different because of the risks and uncertainties associated with our
respective business or events that happen after the date of this press release.
You should not place undue reliance on forward-looking statements.
Phil Wright, President and
President and Chief
INFORMATION PLEASE CONTACT:
+1 (416) 361-4808