Equinox Rejects a Bid That Appears Substantially More Favourable Than Its Offer
posted on
Apr 12, 2011 04:34PM
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Breaking News
16:30 EDT Tuesday, April 12, 2011
TORONTO, ONTARIO--(Marketwire - April 12, 2011) - Lundin Mining Corporation (TSX:LUN)(OMX:LUMI) ("Lundin Mining" or the "Company") today commented on Equinox Minerals Limited's ("Equinox") reaction to the announcement by Minmetals Resources Limited ("MMR"), of their intention to make an all cash offer of C$7.00 per share for Equinox.
On April 3, 2011 MMR announced its intention to make an all cash takeover offer for Equinox of C$7.00 per share, being a 33% premium to the 20 trading day VWAP of Equinox Shares on the TSX to April 1, 2011.
This offer was described by Equinox as being "opportunistic" and "Such a low premium is a fraction of premiums paid in recent acquisitions of base metal mining companies".
Commenting on this, Mr. Phil Wright, Chief Executive Officer of Lundin Mining, said, "This response by Equinox seems very hypocritical seeing that they are urging Lundin Mining shareholders to accept an offer that is significantly worse than what has been offered to Equinox's shareholders by MMR."
"MMR is offering a much better economic proposition than Equinox is offering Lundin Mining shareholders and without the significant risks involved in the Equinox bid, which include a huge debt burden, an overhang from significant equity issuance and prospect of further dilution through issuance of convertible debt," Mr. Wright said.
Equinox's offer to Lundin Mining shareholders purported to represent a premium of around 16% compared to the 20-day VWAP of Lundin Mining shares ending February 25, 2011, the last day of trading prior to the announcement by Equinox. This had fallen to around 3% immediately prior to the MMR bid.
Lundin Mining is actively engaged in a strategic review process and continues to recommend shareholders reject the Equinox offer as being completely inadequate.
Lundin Mining Position
The Board recommends to Lundin Mining shareholders that they REJECT the Unsolicited Offer and DO NOT TENDER their Lundin Mining shares for the following reasons:
Shareholders do not need to take any action in response to Equinox's proposed offer at this time.
About Lundin Mining
Lundin Mining Corporation is a diversified base metals mining company with operations in Portugal, Sweden, Spain and Ireland, producing copper, zinc, lead and nickel. In addition, Lundin Mining holds a development project pipeline which includes an expansion project at its NevesāCorvo mine along with its equity stake in the world class Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo.
On Behalf of the Board,
Phil Wright, 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 or "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 of the United States. 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 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Sophia Shane Lundin Mining Corporation Investor Relations North America +1-604-689-7842
OR
John Miniotis Lundin Mining Corporation Senior Business Analyst +1-416-342-5560
OR
Robert Eriksson Lundin Mining Corporation Investor Relations Sweden +46 8 545 015 50 www.lundinmining.com