Lumina Copper Corp. to Be Acquired by First Quantum Minerals, Cash
and Share Transaction Valued at Approximately $470 Million
Conference Call Scheduled for 12:15pm (EST) on Tuesday June 17,
2014
VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jun 17, 2014) -
(All dollar
amounts are in Canadian dollars, except where noted otherwise)
First Quantum Minerals Ltd. ("First Quantum" or "the Company")
(TSX:FM)(LSE:FQM) and Lumina Copper Corp. ("Lumina")
(TSX-VENTURE:LCC) announced today that they have entered into a
definitive agreement pursuant to which First Quantum will acquire,
by way of a court-approved plan of arrangement (the "Arrangement"),
all of the outstanding securities of Lumina. Based upon the
consideration, the total value of 100% of the fully diluted common
shares of Lumina is approximately $470 million. First Quantum
currently owns 2.5 million of Lumina's outstanding common
shares.
Lumina is the 100% owner of the Taca Taca copper deposit located
in the Puna region of Salta Province in northwest Argentina,
approximately 120 kilometres east of the Escondida, the world's
largest producing copper mine. Taca Taca currently has a reported
National Instrument 43-101 compliant indicated mineral resource
estimate of approximately 21.15 billion pounds of copper (9.6
million tonnes of copper) contained in 2.17 billion tonnes grading
0.44% copper, 0.08g/t gold and 0.013% molybdenum (0.57% copper
equivalent) and an inferred mineral resource estimate of
approximately 7.55 billion pounds of copper (3.4 million tonnes of
copper) contained in 921 million tonnes grading 0.37% copper,
0.05g/t gold and 0.012% molybdenum (0.47% copper equivalent), using
a 0.3% copper equivalent cut-off.(1) These estimates are defined by
148,000 metres of drilling. The deposit remains open in some areas
to depth and along the southern boundary of the northeastern
limb.
Commenting on the proposed transaction, Mr. Ross Beaty, Lumina's
founder and largest shareholder said, "I am very pleased with First
Quantum's proposed acquisition of our company. First Quantum is an
outstanding mining company with a significant and growing portfolio
of copper operations. In our view, they are the most capable
company in the world to develop Taca Taca into a major copper mine.
This transaction provides Lumina shareholders with the option to
retain exposure to Taca Taca's future development in the hands of a
world class mine development and operating team through ownership
of First Quantum's shares. I encourage all Lumina shareholders to
vote in favour of this transaction."
Mr. Philip Pascall, Chairman and Chief Executive Officer of
First Quantum said, "The acquisition of Lumina is another step in
First Quantum's long-stated objective of geographical
diversification through the acquisition of world class, early-stage
copper assets. Taca Taca will significantly add to First Quantum's
development pipeline and is at the stage where we can apply our
resources and development expertise to realize its full potential
and further add to First Quantum's copper production profile. Once
the acquisition of Lumina has been completed we will immediately
review the Taca Taca project to determine the most efficient and
economical timing for its development in the context of the
projects that we are currently developing."
About the Transaction
The transaction will be carried out by way of a statutory plan
of arrangement pursuant to the Business Corporations Act
(British Columbia), and must be approved by the Supreme Court of
British Columbia and the affirmative vote of 662/3% of Lumina
shareholders.
The completion of the transaction is subject to customary
closing conditions, including the receipt of any required
regulatory approvals.
Under the Arrangement, Lumina shareholders may elect to receive,
in exchange for each common share of Lumina held:
- $5.00 in cash and 0.2174 of a First Quantum common share;
- 0.4348 of a First Quantum common share and $0.01 in cash,
subject to proration as to the number of First Quantum common
shares if the total number of First Quantum common shares Lumina
shareholders elect to receive exceeds 9,669,182 First Quantum
common shares; or
- $10.00 in cash, subject to proration as to the amount of cash
if the total cash Lumina shareholders elect to receive exceeds
$222,391,175.
Lumina shareholders who do not elect any of the three options
above shall be deemed to have elected to receive the cash
alternative in respect of all of their Lumina common shares.
The $10.00 cash consideration for each common share of Lumina
represents a 34% premium to the volume-weighted average trading
price of the common shares of Lumina on the TSX Venture Exchange of
$7.44 for the 20 trading days ended June 16, 2014 and a 28% premium
to the closing price of the common shares of Lumina on the TSX
Venture Exchange of $7.80 on June 16, 2014.
The Boards of Directors of both companies have unanimously
approved the transaction.
The Board of Directors of Lumina, after consultation with its
financial and legal advisors and based, in part, upon the unanimous
recommendation of an independent committee of the Board of
Directors of Lumina, has determined unanimously that the
Arrangement is fair to the Lumina shareholders and is in the best
interest of Lumina. Lumina's Board of Directors unanimously
recommends that the Lumina shareholders vote in favour of the
Arrangement. Raymond James Ltd. has been engaged to provide an
opinion that the transaction is fair, from a financial point of
view, to the Lumina shareholders (other than First Quantum). Borden
Ladner Gervais LLP is acting as legal counsel to Lumina.
First Quantum's financial advisor is RBC Capital Markets and its
legal advisor is Fasken Martineau DuMoulin LLP.
Holders of approximately 33.6% of Lumina's issued and
outstanding common shares (on a fully diluted basis), including all
of Lumina's directors, officers and certain major shareholders,
have signed voting support agreements pursuant to which they have
agreed to vote in favour of the Arrangement.
In the event that the transaction is not completed, Lumina has
agreed to pay First Quantum a termination fee of approximately
$16.25 million, under certain circumstances. Lumina has also
provided First Quantum with certain other customary rights,
including a right to match any superior offers.
First Quantum intends to fund the cash portion of the
transaction from its existing cash resources. The transaction is
not contingent on any financing condition.
Full details of the transaction will be included in an
information circular to be mailed to Lumina shareholders in
accordance with applicable securities laws. The transaction is
expected to close on or before August 30, 2014. All shareholders
are urged to read the proxy circular once it becomes available as
it will contain additional important information concerning the
transaction.
Qualified Person
Andrew Carstensen, CPG, Lumina's Vice President, Exploration and
a Qualified Person as defined by National Instrument 43-101
Standards of Disclosure for Mineral Projects has reviewed
and approved the contents of this news release as they relate to
the mineral resource estimate and technical disclosure on the Taca
Taca project.
Scientific and Technical Disclosure
For complete disclosure of Lumina's mineral resource estimate
refer to the Preliminary Economic Assessment Report on the Taca
Taca Copper/Gold Molybdenum Project dated May 24, 2013, prepared by
Ausenco Solutions Canada Inc. with an effective date of April 9,
2013, which is available under Lumina's profile at
www.sedar.com.
(1) Copper equivalent calculated using US$2.00/lb Cu, US$800/oz
Au and US$12.00/lb Mo and is not adjusted for mining and
metallurgical recoveries as these remain uncertain. The formula
used is as follows: CuEQ = Cu% + (Au g/t x 0.583) + (Mo% x 6).
Conference Call Details |
First Quantum and Lumina will host a conference call to discuss
the transaction. |
Date: June 17, 2014 |
Time: 12:15 pm (EST); 5:15 pm (BST) |
Dial in: 416-340-8527 / 800-766-6630 (North American toll
free) |
|
Instant Replay |
Dial in: 905-694-9451 / 800-408-3053 (North American toll
free) |
Pass Code: 6198300 |
End Date: July 1, 2014 |
About Lumina
Lumina is a Vancouver based copper exploration company that
controls the Taca Taca copper, gold, and molybdenum project in
Argentina. Lumina's common shares trade on the TSX Venture Exchange
under the symbol LCC. Lumina has 44,007,402 common shares issued
and outstanding and 46,978,235 common shares issued and outstanding
on a fully diluted basis.
About First Quantum
First Quantum Minerals Ltd. is an established and rapidly
growing mining and metals company operating seven mines and
developing five projects worldwide. The Company produces copper,
nickel, gold, zinc and platinum group elements.
First Quantum's current operations are the Kansanshi copper-gold
mine in Zambia, the Las Cruces copper mine in Spain, the Guelb
Moghrein copper-gold mine in Mauritania, the Ravensthorpe
nickel-cobalt mine in Western Australia, the Kevitsa
nickel-copper-PGE mine and the Pyhäsalmi copper-zinc mine in
Finland and the Çayeli copper-zinc mine in Turkey.
First Quantum's market capitalization was approximately $12.8
billion based on the closing price of its common shares on the TSX
on June 16, 2014.
On Behalf of the Board of Directors of First Quantum Minerals
Ltd.
G. Clive Newall, President
12g3-2b-82-4461
Listed in Standard and Poor's
Neither the TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this news
release.
Cautionary statement
on forward-looking information
Certain statements and information herein, including all
statements that are not historical facts, contain forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. Such forward-looking statements or
information include but are not limited to statements or
information with respect to the completion of the Arrangement, the
anticipated benefits from the Arrangement, the estimation of
mineral resources, First Quantum's exploration and development
program, and First Quantum's capabilities, goals and strategies.
Often, but not always, forward-looking statements or information
can be identified by the use of words such as "plans", "expects" or
"does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not
anticipate" or "believes" or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be
achieved.
With respect to forward-looking statements and information
contained herein, First Quantum and Lumina have made numerous
assumptions including among other things, assumptions about general
business and economic conditions, the price of copper, gold,
nickel, zinc, pyrite, PGE, cobalt and sulphuric acid, interest
rates, anticipated costs and expenditures, production and
productivity levels, market competition, receipt of necessary
approvals and First Quantum's and Lumina's ability to achieve their
goals. The foregoing list of assumptions is not exhaustive.
Although management of First Quantum and Lumina believe that the
assumptions made and the expectations represented by such
statements or information are reasonable, there can be no assurance
that a forward-looking statement or information herein will prove
to be accurate. Forward-looking statements and information by their
nature are based on assumptions and involve known and unknown
risks, uncertainties and other factors which may cause Lumina's
and/or First Quantum's actual results, performance or achievements,
or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements or information. These factors include,
but are not limited to: risks and costs to Lumina and/or First
Quantum if the Arrangement is not completed, including the adverse
effects on Lumina's ability to execute another transaction or
stand-alone business strategy; Lumina's obligation to pay a break
fee if the Arrangement is terminated under certain circumstances,
which might deter other parties from making a competing offer to
acquire Lumina; the investment of executive management time to the
Arrangement, which may delay or prevent Lumina and/or First Quantum
from exploiting business opportunities that may arise pending
completion of the Arrangement; the restrictions on the conduct of
Lumina's business prior to completion of the Arrangement, which may
delay or prevent Lumina from exploiting business opportunities that
may arise pending completion of Arrangement; the interests of
management and other related parties in the Arrangement, which may
differ from those of Lumina shareholders in certain respects; risks
associated with the business of First Quantum; risks related to the
approval of applicable governmental authorities and the
satisfaction or waiver of certain other conditions contemplated by
the definitive agreement in respect of the Arrangement; risk
related to the interpretation of historic results at Lumina's Taca
Taca project and certain of First Quantum's mineral projects; risks
related to reliance on technical information provided by Lumina as
related to the Taca Taca project; risks relating to exploration and
potential development of Lumina's and First Quantum's projects;
business and economic conditions in the mining industry generally;
the supply and demand for labour and other project inputs; prices
for commodities to be produced and changes in commodity prices;
changes in interest and currency exchange rates; risks relating to
inaccurate geological and engineering assumptions (including with
respect to the tonnage, grade and recoverability of reserves and
resources); risks relating to unanticipated operational
difficulties (including failure of plant, equipment or processes to
operate in accordance with specifications or expectations, cost
escalation, unavailability of materials and equipment, government
action or delays in the receipt of government approvals, industrial
disturbances or other job action, and unanticipated events related
to health, safety and environmental matters); risks relating to
adverse weather conditions; political risk and social unrest;
changes in general economic conditions or conditions in the
financial markets; and other risk factors as detailed from time to
time in Lumina's and First Quantum's continuous disclosure
documents filed with the Canadian securities administrators.
See First Quantum's Annual Information Form and Lumina's public
filings with the Canadian securities administrators for additional
information on risks, uncertainties and other factors relating to
the forward-looking statements and information. Although First
Quantum and Lumina have attempted to identify factors that would
cause actual actions, events or results to differ materially from
those disclosed in the forward-looking statements or information,
there may be other factors that cause actual results, performances,
achievements or events not to be anticipated, estimated or
intended. Also, many of the factors are beyond First Quantum's and
Lumina's control. Accordingly, readers should not place undue
reliance on forward-looking statements or information. Neither
First Quantum nor Lumina undertakes any obligation to reissue or
update forward-looking statements or information as a result of new
information or events after the date hereof except as may be
required by law. All forward-looking statements and information
made herein, are qualified by this cautionary statement.
First Quantum MineralsNorth American contact:Sharon Loung,
Director, Investor Relations(647) 346-3934 or Toll Free: 1 (888)
688-6577sharon.loung@fqml.comUnited Kingdom contact:Clive Newall,
President+44 140 327 3484+44 140 327
3494clive.newall@fqml.comwww.first-quantum.comLumina Copper
Corp.David Strang, President & CEO(604)
646-1880dstrang@luminacopper.comwww.luminacopper.com
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