Lundin Mining Corporation (TSX: LUN) (Nasdaq Stockholm: LUMI) (“Lundin Mining” or the “Company”) is pleased to announce the closing of the acquisition of an 80% ownership stake in the Candelaria/Ojos del Salado copper mining operations and supporting infrastructure (together, “Candelaria”) from Freeport-McMoRan Inc. (“Freeport”), previously announced on October 6, 2014.
Paul Conibear, President and CEO stated "The completion of the Candelaria acquisition adds another cornerstone asset to the Company that will deliver excellent value to shareholders and contribute significantly to growth in production, cash flow and earnings. We look forward to establishing an excellent reputation in Chile over many years to come as we work closely with our new employees and stakeholders at Candelaria in order to unlock additional value from this high quality asset."
Total cash consideration paid at closing by the Company was approximately US$1,852 million, consisting of a US$1,800 million base purchase price plus approximately US$52 million for cash and non-cash working capital and other agreed adjustments. In addition, contingent consideration of up to US$200 million is also payable calculated as 5% of net copper revenue in any annual period over the next five years if the realized average copper price exceeds US$4.00 per pound. The acquisition was funded by the US$1.0 billion senior secured note financing, the CAD$674 million (US$600 million) subscription receipt equity financing and the US$648 million upfront payment under the stream agreement with a subsidiary of Franco-Nevada Corporation. The Company also repaid its existing US$250 million term loan with the proceeds from the financings and has executed an amendment to its US$350 million revolving credit facility which will remain in place under existing terms.