Equinox announces takeover offer for Lundin

TORONTO, ON and PERTH, Australia, Feb. 28 /CNW/ - Equinox Minerals Limited (TSX and ASX: EQN) ("Equinox" or the "Company") announced today that it will make an offer to acquire Lundin Mining Corporation ("Lundin") for approximately C$4.8 billion in cash and shares (the "Offer").

Under the terms of the Offer, Equinox proposes to acquire all of the outstanding common shares of Lundin for a combination of cash and Equinox shares for a total consideration value of C$8.10 per Lundin share. Each Lundin shareholder can elect to receive consideration per Lundin share of either C$8.10 in cash or 1.290
3 Equinox shares plus $0.01 for each Lundin share, subject to a pro-ration based on a maximum cash consideration of approximately C$2.4 billion and maximum number of Equinox shares issued of approximately 380 million. The Offer reflects a 26% premium to the closing price of C$6.45 per Lundin share on the TSX on February 25, 2011.

The Offer is consistent with Equinox's strategy of becoming the leading global pure copper growth company. Equinox believes that the combination of Equinox's and Lundin's world-class asset portfolios will position the combined company to deliver significant value to its shareholders through its superior leverage to near-term strength in copper prices and strong growth profile. The combined group will have an outstanding production growth profile relative to the global copper sector, with a targeted 23% compound annual growth rate in production over the next six years, culminating in planned production of approximately 500,000 tonnes of copper per annum by 2016. Growth would be delivered entirely from lower risk expansions of existing operations and a project currently under construction.

The combination of Equinox and Lundin will also deliver a significantly higher copper production profile over the next six years compared to the profile of a combined Lundin and Inmet Mining Corporation ("Inmet"), delivering approximately 500,000 tonnes of incremental copper over this period. This allows shareholders of both companies to increase their leverage to the anticipated near term strength in copper prices.

Equinox President and Chief Executive Officer, Craig Williams, said "This Offer is clearly superior to the nil-premium merger proposed between Lundin and Inmet. We also believe that our Offer presents an attractive option for Lundin shareholders to elect to receive cash or retain exposure to what we believe would be one of the strongest and lowest risk production and growth profiles in the copper sector today."

Highlights of the transaction

  • A fully funded C$4.8 billion cash and share Offer for Lundin that demonstrates Equinox's capability to identify and pursue opportunities that deliver on our goal of becoming the leading global pure copper company.

  • The Offer reflects a 26% premium over the closing price for Lundin shares on February 25, 2011, and therefore represents a clearly superior offer for Lundin shareholders than the recommended Lundin and Inmet nil-premium merger.

  • Shareholders of both companies benefit from superior leverage to the near-term copper price cycle.

  • Cements Equinox's position as a leading global pure copper company with a diversified portfolio of world class assets and an outstanding growth pipeline.

  • The transaction will be immediately accretive for Equinox shareholders on a cash flow and earnings per share basis.

Equinox Chairman, Peter Tomsett, said "The Offer which seeks to combine the world class assets of the two companies demonstrates Equinox's capability to identify and pursue opportunities that present a strong strategic fit with our goal to become the world's leading pure play copper company."

Having taken Lumwana from an exploration project to one of the world's most significant new copper mines over the last 10 years and having successfully acquired the Citadel Resource Group, Equinox strives to continue to deliver shareholder value by building a portfolio of quality assets with embedded growth.

Equinox President and Chief Executive Officer, Craig Williams, said "The combination of the assets of Equinox and Lundin will constitute one of the most attractive and highest quality asset portfolios in the copper sector. The combination of those assets plus the significant near term expansion potential within the portfolio and the highly prospective exploration upside in the world's key emerging copper regions constitutes a combined company that will be one of the world's premier copper companies".

The combined company will consist of five substantial producing operations by mid 2012, providing significant geographic and copper production diversity. Equinox operates the Lumwana mine in Zambia (100%) and is currently constructing the Jabal Sayid project in Saudi Arabia (100%). Lundin's assets include the Tenke Fungurume copper mine (24%) in the Democratic Republic of the Congo, Neves-Corvo in Portugal (100%) and Zinkgruvan in Sweden (100%).

Equinox strongly believes that the Offer will be very attractive to Lundin shareholders and clearly preferable to a nil-premium merger which carries increased development and financing risk. Accordingly, the Equinox board determined to announce the Offer to enable Lundin's shareholders to consider this highly attractive alternative prior to the proposed shareholder vote on the nil-premium merger with Inmet scheduled for March 14, 2011.

Funding

The cash consideration of Equinox's Offer is financed through a US$3.2 billion bridge facility being led by Goldman Sachs Lending Partners and Credit Suisse Securities. Equinox expects the financial strength of the combined company to allow it to return to a net cash position within four years based on current analyst consensus copper price forecasts.

Equinox intends to refinance the bridge facility through a combination of medium and long term debt instruments. Equinox has no plans to undertake an equity raising as part of the refinancing of the bridge.

The Offer

Full details of the Offer will be included in the formal offer and take-over bid circular to be mailed to Lundin shareholders. Equinox expects to formally commence the Offer and mail the offer and circular to shareholders in the coming days.

The Offer will be subject to certain conditions including, without limitation, termination of the existing Lundin-Inmet Arrangement Agreement in accordance with its terms, and a simple majority approval of Equinox shareholders of the issuance of the Equinox shares to be issued under the Offer at a meeting of Equinox shareholders that Equinox expects to occur in early to mid April. Other conditions will include acceptance of the Offer by Lundin shareholders owning not less than two-thirds of Lundin's shares outstanding on a fully-diluted basis, and receipt of applicable regulatory approvals, and other customary unsolicited offer conditions.

Advisors and counsel

Goldman, Sachs & Co. is acting as lead financial advisor to Equinox and TD Securities Inc. is acting as joint financial advisor to Equinox.  Equinox's legal counsel is Osler, Hoskin & Harcourt LLP.

North American/European Investment market call and webcast

Equinox will host an analyst and investor conference call and webcast on February 28, 2011 at 10:00am Canadian/US Eastern Standard Time, 3:00pm London Time and 4:00pm Stockholm Time.

Australian/Asian Investment market call and webcast

Equinox will host an analyst and investor conference call and webcast on March 1, 2011 at 9:30am Australian Eastern Daylight Savings Time and 6:30am Perth and Hong Kong Time.

For dial in details please see Appendix A to this announcement.

About Equinox

Equinox Minerals Limited is an international mining company dual-listed on the Canadian (Toronto) and Australian stock exchanges.

The Company is currently focused on operating its 100% owned large scale Lumwana Copper Mine in Zambia and construction of the Jabal Sayid Copper-Gold project in Saudi Arabia.

Equinox acquired the Lumwana project in 1999 and following nearly 10 years of feasibility, financing and construction, commissioned the mine, plant and infrastructure in December 2008. Situated 220 kilometres northwest of the Zambian Copperbelt, Lumwana is now a major copper mine which has established Equinox as one of the world's top 20 copper producing companies.

Equinox recently acquired the Jabal Sayid project as the project entered the construction phase with first production scheduled for 2012. Jabal Sayid is located within the Arabian Shield minerals province, 350 kilometres north-east of the Red Sea port city of Jeddah, the commercial capital of Saudi Arabia, and 120 kilometres south-east of Medina.

For information on Equinox and technical details on the Lumwana and Jabal Sayid projects please refer to the company website at www.equinoxminerals.com


Cautionary Notes

Forward-Looking Statements
Certain information contained or incorporated by reference in this press release, including any information as to the Company's strategy, projects, plans, prospects, future outlook, anticipated events or results or future financial or operating performance, constitutes "forward-looking statements" within the meaning of Canadian securities laws. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements can often, but not always, be identified by the use of words such as "plans", "expects", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "predicts", "potential", "continue" or "believes", or variations (including negative variations) of such words; or statements that certain actions, events or results "may", "could", "would", "should", "might", "potential to", or "will" be taken, occur or be achieved or other similar expressions concerning matters that are not historical facts. All statements regarding production estimates or expectations constitute forward-looking statements. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made or incorporated in this press release are qualified by these cautionary statements.

Forward-looking statements are necessarily based on a number of factors, estimates and assumptions that, while considered reasonable by Equinox (the "Company") as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Such factors, estimates and assumptions of the Company contained in this news release include, but are not limited to: (i) the assumption that the Company will acquire 100% interest in Lundin through the Offer (ii) the accuracy of management's assessment of the successful integration of the combined companies upon completion of the Offer; (iii) the accuracy of management's expectations of growth and production upon completion of the Offer; (iv) the viability of Lundin's assets and projects on a basis consistent with the management's current expectations; (vi) management's expectation of there being no significant risks relating to the Company's or Lundin's mining operations, including political risks and instability and risks related to international operations; (vii) management's expectations of permitting, development and expansion at the Company's existing properties; (viii) the Company's ability to secure the necessary financing on acceptable terms to the Company; and (ix) copper prices remaining at or above current analyst consensus estimates for the next four years. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Readers are also cautioned that forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Equinox and/or its subsidiaries to differ materially from those expressed or implied in the forward-looking statements, including the risk that the Offer will not be completed for any reason. Certain of these risks and uncertainties are described in more detail in the Company's Annual Information Form dated March 15, 2010 and in the Company's most recently filed Management's Discussion and Analysis, to which readers are referred and which are incorporated by reference in this news release. The Company's Annual Information Form and its most recently filed Management's Discussion and Analysis are available on SEDAR at www.sedar.com and on the Company's website at www.equinoxminerals.com.

Although Equinox has attempted to identify statements containing important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein are made as of the date of this document based on the opinions and estimates of management on the date statements containing such forward looking information are made, and Equinox disclaims any obligation to update any forward-looking information, whether as a result of new information, estimates or opinions, future events or results or otherwise. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward looking information.

The information in this announcement concerning Lundin and Lundin's assets and projects is based on publicly available information and has not been independently verified by Equinox.


APPENDIX A - INVESTMENT MARKET CALLS & WEBCASTS

North American/European Investment market call and webcast

Date:    Monday, 28 February, 2011
   
Time:    10:00 HRS (Canadian/US Eastern Standard Time)
  15:00 HRS (London time)
  16:00 HRS (Stockholm time)
  02:00 HRS (Sydney / Melbourne time - Tuesday, 1 March 2011)
   
Webcast:   The Company's website at www.equinoxminerals.com
A replay of the webcast will be available until February 28, 2012.
   
Dial-in Canada:   1 866-605-3851 (Toll-free)
   
Dial-in US:   1 877-872-0720 (Toll-free)
   
Dial-in UK:   080-8238-9063 (Toll-free)
   
Dial-in Sweden:   020-089-6823 (Toll-free)
   
Dial-in Australia:  1 800-288-277 (Toll-free)
   
Dial-in International:  +1 412-317-0778
   
Call Instructions:  Please call in 10 minutes prior to the call and use Elite Entry Code 7900240.  An operator will be available to assist you.
   
Replay:  A replay of the telephone conference will be available approximately one hour after the completion of the conference and until 9:00 hrs EST on 29 March 2011.
   
Replay Dial-in:   +1-412-317-0088 (Canada / International) and +1-877-344-7529 (US Toll-free). To access the recording, please enter Conference # 448984.  An archived transcript of the call will also be available on the Company's website.

Australian/Asian Investment market call and webcast

Date:    Tuesday, 1 March, 2011
   
Time:    09:30 HRS (Sydney / Melbourne time)
  06:30 HRS (Hong Kong time)
  17:30 HRS (Toronto/New York time - Monday, 28 February 2011)
   
Webcast:   The Company's website at www.equinoxminerals.com
A replay of the webcast will be available until February 28, 2012.
   
Dial-in Australia:  1 800-288-277 (Toll-free)
   
Dial-in Hong Kong:  +1 412-317-0778
   
Dial-in Canada:   1 866-605-3851 (Toll-free)
   
Dial-in US:   1 877-872-0720 (Toll-free)
   
Dial-in International:  +1 412-317-0778
   
Call Instructions:  Please call in 10 minutes prior to the call and use Elite Entry Code 7900240.  An operator will be available to assist you.
   
Replay:  A replay of the telephone conference will be available approximately one hour after the completion of the conference and until 9:00 hrs EST on 29 March 2011.
   
Replay Dial-in:   +1-412-317-0088 (International) and +1-877-344-7529 (US Toll-free). To access the recording, please enter Conference # 448985.  An archived transcript of the call will also be available on the Company's website.

SOURCE Equinox Minerals Limited

For further information:

For further information please contact:

Investors and analysts       Media - Australia
Craig R Williams
President and Chief Executive

Carl Hallion
VP Business Development

Len Eldridge
Head of Investor Relations

Phone:
   Canada:  +1 416 865 3393
   Australia: +61 8 9322 3318
Email: equinox@equinoxminerals.com

The Information Agent:
Kingsdale Shareholder Services Inc.
North America Phone: 1-888-518-1558
Outside North America call collect +1 416 867 2272
Email: contactus@kingsdaleshareholder.com
      Michael Vaughan/Andrew Stokes
FD
Phone +61 (0) 2 8298 6100
Email: michael.vaughan@fd.com
andrew.stokes@fd.com

Media - North America
John Lute
Lute and Company
Phone: +1 416 929 5883
Email: jlute@luteco.com

Media - Zambia
Nathan Chishimba
Lumwana Mining Company
Phone: +260 211 257 643
Email: nathan.chishimba@lumwanamine.com

Organization Profile

Equinox Minerals Limited

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