The sale would be for $1.136 billion in cash and contingent consideration of up to $51.4 million. The effect of the transaction is that Lundin, a diversified Canadian base metals mining company, is selling its minority interest in Tenke.
TF Holdings is a Bermuda holding company that owns an 80% interest in Tenke Fungurume Mining S.A. (Tenke). Lundin Mining has an indirect 30% interest in TF Holdings and therefore, an effective 24% interest in Tenke.
Wit regard to the transaction, Lundin Mining has waived its right of first offer to acquire Freeport’s indirect interest in TF Holdings. The transaction is subject to the receipt of certain regulatory approvals, the completion of Freeport’s sale of its interest in TF Holdings to CMOC and other customary closing conditions.
What is more, is that a termination fee of $100 million, which has been secured by a letter of credit that has been received by the company, is payable to Lundin Mining in certain circumstances, including upon termination of the transaction due to the failure to obtain necessary regulatory approvals.
Paul Conibear, President and CEO of Lundin commented: “The decision to sell our minority interest in Tenke has been arrived at following a careful and lengthy consideration of all options open to us. It was a difficult decision, respecting the 20 years of Lundin involvement in Tenke, and the special nature of this world class asset.
“The sale will enable Lundin Mining to advance its strategy to incrementally grow the company with projects and operations we control, while maintaining a strong balance sheet.”
Lundin’s Connibear added that Lundin wants to thank its long-standing partners, Freeport and Gécamines, who have been instrumental in the development of Tenke into a world class operation to be proud of. “We are confident that the new Tenke partners will continue to build on Tenke’s highly successful record and realise the future development potential of the properties,” he said.
The transaction is expected close in the first half of 2017.