Lundin Mining (LUN-T) to Sell Interest in TF Holdings for US$1.136 Billion
Nov 15, '16 - NR
Lundin Mining is pleased to announce that it has entered into a definitive agreement to sell its indirect interest in TF Holdings Limited (“TF Holdings”) to an affiliate of BHR Partners, a Chinese private equity firm, for $1.136 billion in cash and contingent consideration of up to $51.4 million, consisting of $25.7 million if the average copper price exceeds $3.50 per pound and $25.7 million if the average cobalt price exceeds $20 per pound, both during a 24-month period beginning on January 1, 2018 (the “Transaction”). The consideration to be received by Lundin Mining is equal to the implied value of the Company’s stake in TF Holdings based on the transaction between Freeport-McMoRan Inc. (“Freeport”) and China Molybdenum Co., Ltd. (“CMOC”) announced on May 9, 2016.
TF Holdings is a Bermuda holding company that owns an 80 percent interest in Tenke Fungurume Mining S.A. ("Tenke"). Lundin Mining has an indirect 30 percent interest in TF Holdings and therefore, an effective 24 percent interest in Tenke.
In connection with the Transaction, Lundin Mining has waived its right of first offer to acquire Freeport’s indirect interest in TF Holdings. The Transaction is subject to the receipt of certain regulatory approvals, the completion of Freeport’s sale of its interest in TF Holdings to CMOC and other customary closing conditions. A termination fee of $100 million, which has been secured by a letter of credit that has been received by the Company, is payable to Lundin Mining in certain circumstances, including upon termination of the Transaction due to the failure to obtain necessary regulatory approvals.
Mr. Paul Conibear, President and CEO commented: “The decision to sell our minority interest in Tenke has been arrived at following a careful and lengthy consideration of all options open to us. It was a difficult decision, respecting the 20 years of Lundin involvement in Tenke, and the special nature of this world class asset. The sale will enable Lundin Mining to advance its strategy to incrementally grow the company with projects and operations we control, while maintaining a strong balance sheet.
We want to thank our long standing partners, Freeport and Gécamines, who have been instrumental in the development of Tenke into a world class operation to be proud of. We are confident that the new Tenke partners will continue to build on Tenke’s highly successful record and realize the future development potential of the properties.”
The Transaction is expected close in the first half of 2017.
BMO Capital Markets is acting as financial advisor to Lundin Mining. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Cassels Brock & Blackwell LLP are acting as legal advisors to Lundin Mining.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the USA, Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, Lundin Mining holds an indirect 24% equity stake in the world-class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.
Mark Turner
Director, Business Valuations and Investor Relations
+1-416-342-5565
Sonia Tercas
Senior Associate, Investor Relations
+1-416-342-5583
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
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