Boliden Agrees to Acquire Neves-Corvo and Zinkgruvan Mines from Lundin Mining

December 09, 2024 01:40 AM PST | By Team Kalkine Media

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Boliden Agrees to Acquire Neves-Corvo and Zinkgruvan Mines from Lundin Mining — Image source: shutterstock

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Highlights

Acquisition Details: Boliden has entered a definitive agreement with Lundin Mining to acquire the Neves-Corvo mine in Portugal and the Zinkgruvan mine in Sweden for USD 1.3 billion in upfront cash, with additional contingent payments of up to USD 150 million.

Strategic Fit: The acquisition strengthens Boliden’s zinc and copper concentrate production, with an expected 95% increase in zinc and a 43% increase in copper production.

Financing and Share Issue: The upfront payment will be funded via a bridge loan, which will be refinanced with a share issue in 2025, subject to market conditions.

Boliden has entered into a definitive agreement to acquire Lundin Mining's Neves-Corvo mine in Portugal and Zinkgruvan mine in Sweden for an upfront cash payment of USD 1.3 billion, with additional contingent payments of up to USD 150 million. The transaction, which is subject to customary regulatory approvals, is expected to significantly enhance Boliden’s mine production and internal supply of zinc and copper concentrates.

Strategic Impact:

The acquisition will increase Boliden's zinc concentrate production from 35% to 70% of its zinc smelting capacity, and copper concentrate production from 30% to 40% of its copper smelting capacity.
Based on 2023 production data, the transaction will result in a 95% increase in zinc and a 43% increase in copper production in Boliden’s Business Area Mines.
The mines are expected to contribute USD 300-350 million annually in EBITDA over the next five years, assuming consensus pricing.

Financing and Future Plans:

The transaction will be initially funded through a bridge loan, which Boliden plans to refinance via a share issue, either as a directed share issue or a fully underwritten rights issue, expected in the first half of 2025, subject to market conditions.
The acquisition is anticipated to be immediately accretive to Boliden's earnings per share upon completion, which is expected in mid-2025, pending regulatory approvals and other customary closing conditions.

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