Lundin Mining has agreed to divest its Neves-Corvo and the Zinkgruvan zinc-copper mines in Portugal and Sweden, respectively, to Boliden in a deal worth up to $1.52bn.
The transaction includes an upfront cash payment of $1.37bn based on a cash-free and debt-free enterprise value of $1.3bn. It also includes contingent payments of up to $150m subject to certain conditions, as outlined in the terms of the definitive agreement.
Contingent payments linked to the Neves-Corvo mine could reach up to $100m. Meanwhile, contingent payments up to $50m for the Zinkgruvan mine will depend on zinc price thresholds and production targets set for 2025 through 2027.
Boliden will take full ownership of Somincor–Sociedade Mineira de Neves-Corvo and Zinkgruvan Mining Aktiebolag, alongside North Atlantic Natural Resources Aktiebolag.
The deal is set to strengthen Lundin Mining’s balance sheet and support its growth plans in the Vicuña District.
Lundin Mining president and CEO Jack Lundin said: “Neves-Corvo and Zinkgruvan have played a significant role in catalysing the Company to become a multi-asset base metals producer of global scale.
“I want to thank the teams for their dedication and hard work over the years; the Company would not be where it is today without these two long-life mining operations.”
Located in the western part of the Iberian Pyrite Belt, the Neves-Corvo project is an underground zinc-copper-lead-silver mine with on-site processing facilities. Last year, it produced 108,812 tonnes of zinc and 33,823 tonnes of copper along with some lead and silver.
The Zinkgruvan mine produced 76,349 tonnes of zinc, 4,434 tonnes of copper, 26,284 tonnes of lead, and 2.3 million ounces of silver last year. This underground zinc-copper-lead-silver mine also features on-site processing facilities.
Following the acquisition, Boliden’s concentrate production for zinc and copper is expected to significantly increase. The company’s zinc and copper concentrate production is anticipated to grow from 35% to 70% of zinc smelting capacity and 30% to 40% of copper smelting capacity.
Boliden’s production of metals concentrate in its business area mines is expected to increase by 95% for zinc and 43% for copper upon the closing of the deal.
In addition, the deal is expected to boost Boliden’s earnings per share and generate an estimated annual EBITDA contribution of $300m to $350m over the next five years.
Boliden president and CEO Mikael Staffas said: “The addition of two cash flow generative zinc and copper mines in Portugal and Sweden has a strong industrial logic as well as a strategic fit.
“Optimising these well-invested units as well as developing the feed mix to our existing smelters will create short- and long-term value for both our Business Areas. Going forward we will also have greater development opportunities for near mine exploration in these attractive mining regions.”
Subject to regulatory approvals, including merger control filings, and other customary conditions, the deal in anticipated to be completed during mid-2025.
