Lundin Mining Corporation (TSX: LUN; OMX:LUMI), a subsidiary of Vancouver-based The Lundin Group of Companies, and Inmet Mining Corp. (TSX: IMN) announced Wednesday a plan to merge and create Symterra Corp., a deal valued at approximately $9 billion.
According to Lundin’s news release, the merger highlights include: five low-cost, long-life mines in Europe; two copper development projects with a potential to produce 500,000 tonnes of copper annually by 2017; a pro forma cash balance of US$1.3 billion; exposure to zinc and other base metal markets from existing operations and through existing asset expansions; and a doubling of market capitalization to $9 billion.
“The long-term fundamentals for copper are compelling,” chairman Lukas Lundin commented in the release. “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.”
“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,” Jochen Tilk, president and CEO of Inmet, also stated in the release. “The increased critical mass enables us to not only develop our current projects, but also to compete for future opportunities as they arise.”
The news was issued Wednesday after market close. On Thursday Lundin’s stock was down 1.5% to $7.78, and Inmet’s stock was up 6.5% to $79.62 at press time.
Calls to Lundin weren’t returned by press time.