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Lundin Mining to Acquire High Grade Eagle Nickel/Copper Mine

Lundin Mining to Acquire High Grade Eagle Nickel/Copper Mine 
TORONTO, ONTARIO -- (Marketwired) -- 06/12/13 -- Lundin Mining
Corporation (TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company") is
pleased to announce that it has entered into a definitive agreement
with Rio Tinto Nickel Company, a subsidiary of Rio Tinto plc ("Rio
Tinto") to purchase its 100% ownership stake in Rio Tinto Eagle Mine,
LLC, which owns the high grade Eagle nickel/copper underground mine
located in northern Michigan, U.S.A. The agreed purchase price is
approximately US$325 million, consisting of a US$250 million purchase
amount plus project expenditures from January 1, 2013 until
transaction closing of approximately $75 million, payable in cash,
and subject to customary adjustments.  
Paul Conibear, President and CEO commented, "The acquisition of the
Eagle Mine fits ideally within Lundin Mining's asset base and is the
result of the disciplined approach we have been focused on for some
time to acquire high quality, advanced stage assets in low risk,
mining oriented jurisdictions. The Eagle Mine represents a very
unique opportunity to acquire a high-grade project which is under
construction and expected to begin generating significant levels of
metal production and cash flow prior to the end of next year.
Northern Michigan has an outstanding iron ore, gold and base metals
mining history and consequently excellent regional power, road and
rail infrastructure, with extensive mining expertise within local
communities to support and staff Eagle Mine."  
The Eagle Mine is located in Marquette County in the Upper Peninsula
of Michigan. Project construction is slightly more than 50% complete
with initial production expected to commence in Q4 2014. Annual
production over the first three full years (2015 - 2017) is expected
to average approximately 23,000 tonnes of nickel and 20,000 tonnes of
copper per annum, with additional by-product credits of precious
metals and cobalt. Due to the high nickel grades and strong
by-product credits, C1 cash costs for the first three years are
expected to average approximately $2.00/lb nickel, thereby strongly
positioning the asset in the lowest quartile of the nickel producer
cost curve.  
Key Investment Highlights 


 
--  High grade nickel/copper deposit in a low-risk jurisdiction 
--  High quality nickel and copper concentrates with low technical and
    processing risk 
--  Project construction is just over 50% completed 
--  Production expected to commence Q4 2014 
--  Expected to be lowest quartile cost nickel producer 
--  Short payback period and strong cash flows 
--  Exploration upside with potential for increase in resources

 
Eagle Mine Overview 
The Eagle Mine is a high grade nickel/copper deposit with Probable
Ore Reserves estimated in accordance with JORC of 5.18 million tonnes
at 2.93% nickel and 2.49% copper anticipated to produce on average
approximately 17,000 tonnes per annum nickel and 17,000 tonnes per
annum copper, with gold, cobalt, platinum and palladium by-products
over the current life of mine of approximately 8 years. In close
proximity to the Eagle Mine deposit, several exploration targets have
been identified. Exploration efforts will be advanced in this highly
prospective area of interest to identify additional resources.  
Rio Tinto discovered the Eagle deposit in 2002 and after completion
of pre-feasibility (2005) and feasibility studies (2007), a decision
to build was announced in July 2010. Construction of the project is
now slightly more than 50% completed, with first production expected
to occur in Q4 2014. Total project capex is estimated at $770 million
of which approximately $355 million has already been spent as of the
end of May 2013. In addition to the total acquisition price of
approximately $325 million, remaining investment by Lundin Mining for
the balance of 2013 and 2014 to bring Eagle Mine into production is
estimated at $400 million.  
The Eagle assets being acquired comprise the in-development Eagle
nickel-copper underground mine, the historic Humboldt mill site and
mineral, water, access and surface rights around the mine. The Eagle
deposit is an ultramafic-intrusive-hosted Ni-Cu deposit, with cobalt,
platinum group metals (PGMs) and gold. The mine is located 45 km
north west of the city of Marquette, Michigan and served by good
infrastructure in a region with a long history and local support of
mining activities.  
The underground mine, which is in an advanced stage of development,
is served by a mine ramp, with some 3,000 m of total development
having been completed as of the end of May. The planned mine
production rate is 2,000 tonnes per day from long-hole open stopes
with cemented rock backfill. Ore will be transported from the mine to
the Humboldt mill site on upgraded existing roads (approximately 105
km) by truck.  
Mill facilities are under construction as a brownfields project by
refurbishing the Humboldt mill buildings and infrastructure.
Processing at a rate of 2,000 tonnes per day, will comprise
conventional crushing, grinding and flotation to produce separate
nickel and copper concentrates. The concentrates will be transported
by existing rail infrastructure from the mill site to final smelter
or port destinations. Tailings will be deposited sub-aqueously in the
adjacent flooded Humboldt open pit. Power is supplied from the grid
already connected to the site.  
Transaction Overview 
The purchase price will be paid in cash and is subject to certain
adjustments dependent on the exact time of closing. The purchase
price will be funded from Lundin Mining's current net cash balance of
approximately $250 million and a portion of its existing $350 million
revolving credit facility. The remaining balance of project capital
to be spent will be funded by the Company's existing credit facility,
from ongoing cash flow and if necessary from an expanded debt
facility or similar flexible funding instrument. The transaction is
not conditional upon financing.  
The purchase agreement includes typical closing conditions, including
regulatory approvals. The transaction is expected to be completed in
July 2013. 
Probable Ore Reserves  
As reported by Rio Tinto, Probable Ore Reserves, estimated in
accordance with JORC as of 31 December 2012 (using a cut-off of
NSRgreater than $118/tonne) are shown below. Lundin Mining intends to
file a NI 43-101 Technical Report on the Eagle project within 45
days. 


 
----------------------------------------------------------------------------
                  Metric                                                    
JORC              Tonnes  Nickel  Copper   Gold  Platinum  Palladium  Cobalt
Category         (000's)     (%)     (%)  (g/t)     (g/t)      (g/t)       %
----------------------------------------------------------------------------
Probable Ore                                                                
 Reserves          5,181    2.93    2.49   0.25      0.64       0.43    0.08
----------------------------------------------------------------------------

 
The reserve estimates reported in this release have been prepared by
Rio Tinto, using accepted industry practice and have been classified
in accordance with the JORC Code. There are no material differences
between the definitions of Proven and Probable Mineral Reserves under
the applicable definitions adopted by the Canadian Institute of
Mining, Metallurgy and Petroleum (the "CIM Definition Standards") and
the corresponding equivalent definitions in the JORC Code for Proven
and Probable Ore Reserves. 
The Probable Ore Reserves have been calculated using Net Smelter
Return (NSR) values. The NSR is calculated on a recovered payable
basis taking into account nickel, copper, gold, platinum and
palladium grades, metallurgical recoveries, prices and realization
costs.  
Qualified Person 
The Qualified Person for the scientific and technical information
contained herein is Stephen Gatley, Vice President Technical
Services, Lundin Mining. Mr. Gatley has reviewed and approved the
contents of this news release. Mr. Gatley has verified the Probable
Ore Reserves prepared by Rio Tinto and believes that the assumptions
and parameters are reasonable and that there is sufficient data to
support the estimate. 
Eagle Conference Call and Webcast 
Lundin Mining will hold a conference call and webcast on Thursday
June 13th, 2013 at 8:45 am Eastern time. Details of the call are
provided below: 
Please call in 10 to 15 minutes before the conference starts and stay
on the line (an operator will be available to assist you).  
Call-in number for the conference call (North America):
+1416-340-8527  
Call-in number for the conference call (North America Toll Free): +1
877-240-9772  
Call-in number for the conference call (Europe Toll Free): +00
800-2787-2090 
To take part in the interactive presentation, please log on using
this direct link:
http://www.investorcalendar.com/IC/CEPage.asp?ID=171118 
The presentation slideshow will also be available in PDF format for
download from the Lundin Mining website www.lundinmining.com before
the conference call. 
A replay of the telephone conference will be available approximately
one hour after the completion of the conference call until June 20,
2013.  
Replay number in North America: +1 905 694 9451  
North America (Toll Free) is: +1 800 408 3053  
Europe (Toll Free) is: +00 800 3366 3052 
The pass code for the replay is: 5231720 
About Lundin Mining 
Lundin Mining Corporation is a diversified base metals mining company
with operations in Portugal, Sweden and Spain, producing copper,
zinc, lead and nickel. In addition, Lundin Mining holds a 24% equity
stake in the world-class Tenke Fungurume copper/cobalt mine in the
Democratic Republic of Congo and in the Kokkola cobalt refinery
located in Finland. 
On Behalf of the Board,  
Paul Conibear, President and CEO 
Forward Looking Statements 
Certain of the statements made and information contained herein is
"forward-looking information" within the meaning of the Ontario
Securities Act. Forward-looking statements are subject to a variety
of risks and uncertainties which could cause actual events or results
to differ from those reflected in the forward-looking statements,
including, without limitation, risks and uncertainties relating to
the estimated purchase price of the proposed transaction, the timing
of closing the proposed transaction, estimated cash costs, the timing
and amount of production from the Eagle Mine, the cost estimates for
the Eagle Mine, foreign currency fluctuations; risks inherent in
mining including environmental hazards, industrial accidents, unusual
or unexpected geological formations, ground control problems and
flooding; risks associated with the estimation of mineral resources
and reserves and the geology, grade and continuity of mineral
deposits; the possibility that future exploration, development or
mining results will not be consistent with the Company's
expectations; the potential for and effects of labour disputes or
other unanticipated difficulties with or shortages of labour or
interruptions in production; actual ore mined varying from estimates
of grade, tonnage, dilution and metallurgical and other
characteristics; the inherent uncertainty of production and cost
estimates and the potential for unexpected costs and expenses,
commodity price fluctuations; uncertain political and economic
environments; changes in laws or policies, foreign taxation, delays
or the inability to obtain necessary governmental permits; and other
risks and uncertainties, including those described under Risk Factors
Relating to the Company's Business in the Company's Annual
Information Form and in each management discussion and analysis.
Forward-looking information is in addition based on various
assumptions including, without limitation, the expectations and
beliefs of management, the assumed long term price of copper, nickel,
lead and zinc; that the Company can access financing, appropriate
equipment and sufficient labour and that the political environment
where the Company operates will continue to support the development
and operation of mining projects. 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 statements. Accordingly, readers are advised not to
place undue reliance on forward-looking statements.
Contacts:
Lundin Mining Corporation
Sophia Shane
Investor Relations North America
+1-604-689-7842 
Lundin Mining Corporation
John Miniotis
Senior Business Analyst
+1-416-342-5565 
Lundin Mining Corporation
Robert Eriksson
Investor Relations Sweden
+46 8 545 015 50
www.lundinmining.com
 
 
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