VANCOUVER, BC, Jan. 15,
2025 /CNW/ - (TSX: LUN) (Nasdaq Stockholm:
LUMI) Lundin Mining Corporation ("Lundin Mining" or the
"Company") is pleased to announce the completion of the joint
acquisition (the "Filo Acquisition") of Filo Corp. ("Filo") with
BHP Investments Canada Inc. ("BHP").
Concurrently, Lundin Mining and BHP have formed a 50/50 joint
arrangement, Vicuña Corp. (the "Joint Arrangement" or "Vicuña"),
holding the Filo del Sol project ("FDS") and the Josemaria project.
On completion, BHP paid Lundin Mining a cash consideration of
US$690 million for a 50% interest in
the Josemaria project.
Vicuña will create a long-term strategic alliance between Lundin
Mining and BHP to jointly develop an emerging copper district with
the potential to support a globally ranked mining complex. The
proximity of the FDS and Josemaria projects allows for greater
economies of scale and increased optionality for staged expansions,
as well as the incorporation of future exploration as the district
matures.
Jack Lundin, Lundin Mining
President and CEO, commented "Thanks to the strong
collaboration between BHP and Lundin Mining, today we announce the
formation of the newly formed Joint Arrangement, Vicuña Corp.
and now enter an exciting new chapter of growth that has the
potential to transform Lundin Mining into a top-tier copper
producer. Vicuña's newly formed team, with support from its board
that is comprised equally of both Lundin Mining and BHP
representatives, will work towards several key milestones during
the year.
"Vicuña is targeting a mineral resource estimate for both
the Filo del Sol and Josemaria deposits within the first half of
2025. This resource estimate will form the basis of an integrated
technical report which will outline the development plan for the
phased construction of the district.
"The district represents an opportunity to deliver on the
world's growing copper needs in a meaningful way, both in terms of
scale and operational excellence. The Joint Arrangement is
committed to applying international industry standards to each
facet of the business, from innovation in technology to the
commitment of sustainability and capacity building."
Filo Acquisition
The Filo Acquisition was approved by Filo shareholders on
September 26, 2024 and the final
court order for the plan of arrangement was subsequently
obtained.
The total consideration for the Filo Acquisition was
approximately C$4.0 billion,
excluding the Filo shares already held by Lundin Mining and BHP
respectively.
Lundin Mining's share of the consideration for the Filo
Acquisition was approximately C$877.8
million in cash and 94.1 million Lundin Mining Shares to
Filo shareholders, along with its existing 1.7% interest in Filo
(prior to completion). The issuance of 94.1 million Lundin Mining
shares to the Filo shareholders, represents a dilution to the
existing shareholders of Lundin Mining of approximately 11% based
on the issued and outstanding shares of the Company as of
December 31, 2024. BHP will pay a
cash consideration for its interest in Filo of C$2.0 billion at C$33.00 per Filo share, along with its existing
7.0% interest in Filo (prior to completion).
Formation and Management of the Joint Arrangement
The Joint Arrangement is governed by a joint venture
shareholders' agreement. Vicuña will be the operator, acting
independently from Lundin Mining and BHP, and will be responsible
for the development, operation and management of the projects.
Lundin Mining and BHP have equal voting rights on the Board of
Vicuña that will govern the Joint Arrangement. The Board will be
comprised of Jack Lundin (President
& CEO Lundin Mining), Teitur
Poulsen (EVP & CFO Lundin
Mining), Brandon Craig
(President Americas BHP), and Carlos
Ramirez (VP Vicuña JV BHP). Carlos
Ramirez has been appointed as Chair of the Board of Vicuña
Corp.
Vicuña will be led by Dave
Dicaire, the former Executive Vice President, Josemaria Project for Lundin Mining. The
employees from the Josemaria project team and FDS project team are
expected to transition over to maintain continuity and knowledge of
the projects.
Dave Dicaire, General Manager
Vicuña Corp.
Dave Dicaire has over 40 years of
mining, engineering and construction experience gained on a variety
of global projects leading both the Owners and Engineering,
Procurement, and Construction Management (EPCM) teams and has led
the Josemaria project as Executive Vice President since August of
2022. His experience covers all facets of project management across
several types of mining projects ranging from managing
pre-feasibility studies to large EPC/EPCM projects. Dave's previous
roles include Vice President, Projects at Lundin Gold where he
oversaw construction of the Fruta del Norte project in Ecuador and prior to that Project Director at
Freeport-McMoRan for the highly successful multi-billion-dollar
Cerro Verde Expansion Project in Peru. Before moving to Freeport McMoRan, he
was the General Manager, Project Development for South America for Xstrata Copper based in
Santiago, Chile.
2025 Budget, Work Program and Next Steps
The development of the Vicuña District envisions an integrated
project plan, incorporating both the Filo del Sol and Josemaria
projects through a phased development strategy.
Capital expenditures for the Joint Arrangement are forecast to
total $312 million on a 100% basis
for 2025. The workplan will focus on FDS drilling, FDS mineral
resource estimation, Josemaria mineral resource estimation update,
mine planning, metallurgy, hydrology wells and studies,
commencement of access road construction, and exploration at the
Cumbre Verde target. In parallel, engineering studies and trade off
analysis will be completed in preparation for future permitting and
a technical report outlining an integrated project.
Drilling is currently underway at FDS and Cumbre Verde and will
continue throughout the year. The drill program at FDS will focus
on resource growth with multiple step-out targets in all directions
from zones of known mineralization, including both the Bonita and
Aurora Zones along with infill drilling to support an initial
sulphide mineral resource estimate. Drilling at Cumbre Verde will
follow up on the initial results from last year and target the same
mineralized system and structures discovered to the north of the
project.
The advancement of Vicuña aims to line up with the
application window of the Incentive Regime for Large Investments
("RIGI") in Argentina. The
incentive regime provides a clear fiscal stability framework for
the overall operation during the initial construction period and
future phased expansions.
About Lundin Mining
Lundin Mining is a diversified Canadian base metals mining
company with operations or projects in Argentina, Brazil, Chile, and the
United States of America, primarily producing copper, gold
and nickel. In December 2024 the
Company announced the sale of its European assets to Boliden. The
transaction is expected to close in mid-2025 subject to customary
conditions and regulatory approvals.
The information was submitted for publication, through the
agency of the contact persons set out below on January 15, 2025 at 9:30
PDT.
Cautionary Statement on Forward-Looking
Information
Certain of the statements made and information contained
herein are "forward-looking information" within the meaning of
applicable Canadian securities laws. All statements other than
statements of historical facts included in this document constitute
forward-looking information, including but not limited to
statements regarding the Company's plans, prospects and business
strategies; the establishment and operation of a new joint
arrangement with BHP; the realization of synergies and economies of
scale in the Vicuña district; the estimated capital expenditures;
the timing and expectations for studies and updated estimates; the
Joint Arrangement's application under the RIGI regime and the
approval and timing thereof; the completion of the sale of the
Company's European assets and the timing thereof; the conditions to
close the sale of the Company's European assets; the identification
of additional value creation opportunities; the Company's guidance
on the timing and amount of future production and its expectations
regarding the results of operations; expected costs; permitting
requirements and timelines; the results of any Preliminary Economic
Assessment, Pre-Feasibility Study, Feasibility Study, or Mineral
Resource and Mineral Reserve estimations, the Company's ability to
comply with contractual and permitting or other regulatory
requirements; anticipated exploration and development activities at
the Company's projects; expansion projects and the realization of
additional value; the Company's integration of acquisitions and
expansions and any anticipated benefits thereof; the Company's
ability to become a top tier copper producer; and expectations for
other economic, business, and/or competitive factors. Words such as
"believe", "expect", "anticipate", "contemplate", "target", "plan",
"goal", "aim", "intend", "continue", "budget", "estimate", "may",
"will", "can", "could", "should", "schedule" and similar
expressions identify forward-looking information.
Forward-looking information is necessarily based upon various
estimates and assumptions including, without limitation, the
expectations and beliefs of management, including that the Company
can access financing, appropriate equipment and sufficient labour;
assumed and future price of copper, zinc, nickel, gold and other
metals; anticipated costs; that the conditions to close the sale of
the Company's European assets will be satisfied; the ability to
achieve goals and identify and realize opportunities; the prompt
and effective integration of acquisitions, including the completion
of each of the acquisition of Filo, the establishment of the joint
arrangement with BHP and the realization of synergies and economies
of scale in connection therewith; the prompt and effective
integration of acquisitions; that the Joint Arrangement's RIGI
regime application will be approved; that the political environment
in which the Company operates will continue to support the
development and operation of mining projects; and assumptions
related to the factors set forth below. While these factors and
assumptions are considered reasonable by Lundin Mining as at the
date of this document in light of management's experience and
perception of current conditions and expected developments, these
statements are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking information and undue reliance
should not be placed on such information. Such factors include, but
are not limited to: the failure to obtain required approvals for
the sale of the Company's European assets; global financial
conditions, market volatility and inflation, including pricing and
availability of key supplies and services; risks inherent in mining
including but not limited to risks to the environment, industrial
accidents, catastrophic equipment failures, unusual or unexpected
geological formations or unstable ground conditions, and natural
phenomena such as earthquakes, flooding or unusually severe
weather; uninsurable risks; volatility and fluctuations in metal
and commodity demand and prices; significant reliance on assets in
Chile; reputation risks related to
negative publicity with respect to the Company or the mining
industry in general; delays or the inability to obtain, retain or
comply with permits; risks relating to the development of the Filo
del Sol project and the Josemaria project by the Joint Arrangement;
health and safety laws and regulations; risks associated with
climate change; risks relating to indebtedness; economic, political
and social instability and mining regime changes in the Company's
operating jurisdictions, including but not limited to those related
to permitting and approvals, nationalization or expropriation
without fair compensation, environmental and tailings management,
labour, trade relations, and transportation; inability to attract
and retain highly skilled employees; risks inherent in and/or
associated with operating in foreign countries and emerging
markets, including with respect to foreign exchange and capital
controls; project financing risks, liquidity risks and limited
financial resources; health and safety risks; compliance with
environmental, unavailable or inaccessible infrastructure,
infrastructure failures, and risks related to ageing
infrastructure; changing taxation regimes; the inability to
effectively compete in the industry; risks associated with
acquisitions and related integration efforts, including the joint
acquisition of Filo with BHP; the joint arrangement with BHP;
expansions and related integration efforts, including the ability
to achieve anticipated benefits, unanticipated difficulties or
expenditures relating to integration and diversion of management
time on integration; risks relating to the realization of benefits
under the RIGI regime the impact on cost estimates and economic
analysis related thereto; risks related to mine closure activities,
reclamation obligations, environmental liabilities and closed and
historical sites; reliance on key personnel and reporting and
oversight systems, as well as third parties and consultants in
foreign jurisdictions; information technology and cybersecurity
risks; risks associated with the estimation of Mineral Resources
and Mineral Reserves and the geology, grade and continuity of
mineral deposits including but not limited to models relating
thereto; actual ore mined and/or metal recoveries varying from
Mineral Resource and Mineral Reserve estimates, estimates of grade,
tonnage, dilution, mine plans and metallurgical and other
characteristics; ore processing efficiency; community and
stakeholder opposition; regulatory investigations, enforcement,
sanctions and/or related or other litigation; financial
projections, including estimates of future expenditures and cash
costs, and estimates of future production may not be reliable;
enforcing legal rights in foreign jurisdictions; risks associated
with the use of derivatives; risks relating to joint ventures,
joint arrangements and operations; environmental and regulatory
risks associated with the structural stability of waste rock dumps
or tailings storage facilities; exchange rate fluctuations;
compliance with foreign laws; potential for the allegation of
fraud and corruption involving the Company, its
customers, suppliers or employees, or the allegation of improper or
discriminatory employment practices, or human rights violations;
risks relating to dilution; risks relating to payment of dividends;
counterparty and customer concentration risks; activist
shareholders and proxy solicitation matters; estimation of asset
carrying values; relationships with employees and contractors, and
the potential for and effects of labour disputes or other
unanticipated difficulties with or shortages of labour or
interruptions in production; conflicts of interest; existence of
significant shareholders; challenges or defects in title; internal
controls; risks relating to minor elements contained in concentrate
products; the threat associated with outbreaks of viruses and
infectious diseases; mining rates and rehabilitation projects; mill
shut downs; and other risks and uncertainties, including but not
limited to those described in the " Risks and Uncertainties"
section of the Company's MD&A for the three and nine months
ended September 30, 2024 and the
"Risks and Uncertainties" section of the Company's Annual
Information Form for the year ended December
31, 2023, which are available on SEDAR+ at
www.sedarplus.com under the Company's profile.
All of the forward-looking information in this document are
qualified by these cautionary statements. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated, forecasted or intended
and readers are cautioned that the foregoing list is not exhaustive
of all factors and assumptions which may have been used. Should one
or more of these risks and uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in forward-looking information.
Accordingly, there can be no assurance that forward-looking
information will prove to be accurate and forward-looking
information is not a guarantee of future performance. Readers are
advised not to place undue reliance on forward-looking information.
The forward-looking information contained herein speaks only as of
the date of this document. The Company disclaims any intention or
obligation to update or revise forward‐looking
information or to explain any material difference between such and
subsequent actual events, except as required by applicable
law.
SOURCE Lundin Mining Corporation
