Vancouver-based Quadra Mining Ltd. (TSX:QUA) will merge with Toronto's FNX Mining Company Inc. (TSX:FNX) in a $1.69 billion deal.
The two copper producers stated in a release that the newly-formed company, Quadra FNX Mining Ltd., will have the critical mass required to grow further through acquisitions.
The new company will have a market capitalization of $3.5 billion, roughly $580 million in cash and investments and $50 million in bank debt.
Each FNX share will be exchanged for $0.87 Quadra shares.
Existing Quadra and FNX shareholders will own approximately 52% and 48% of the combined company respectively on a fully diluted basis.
The two companies anticipate that Quadra FNX will produce 300 million pounds of copper and 150,000 ounces of precious metals in 2011 from properties near Sudbury, Ontario and in the U.S. and Chile.
Based on consensus analyst estimates, that would result in 2011 revenue of $1.5 billion and EBITDA of $765 million.
Following completion of the merger, which is expected to occur in May pending shareholder approval, Quadra FNX's board will be comprised of five directors from each company plus a representative from State Grid International Development Ltd., which bought a $150 million stake in Quadra earlier this month.
The new company will have offices in Toronto and Vancouver.
Quadra's share price range during the past week: $17.12 and $17.74; 52-week high: $18.57; 52-week low: $4.85.