Inmet Mining Corporation

Inmet Mining Corporation

March 10, 2011 15:00 ET

Inmet Comments on Hostile Equinox Offer for Lundin

- Equinox offer value destructive; excessive debt, significant execution risks, and misleading premium

- Inmet-Lundin merger delivers lower risk, superior benefits for all shareholders

TORONTO, CANADA--(Marketwire - March 10, 2011) - Inmet Mining Corporation (TSX:IMN) (Inmet) announced today that it has reviewed the Equinox Minerals Ltd. (Equinox) offer and concludes that there are significant risks associated with the hostile Equinox offer for Lundin Mining Corporation (Lundin). Inmet continues to believe the proposed merger of equals between Inmet and Lundin to create Symterra provides superior benefits to shareholders of both Inmet and Lundin without the risks associated with the Equinox offer.

"The Equinox offer for Lundin is a high-risk, low-reward proposition, due to excessive debt, lack of strategy on future asset development plans, questionable growth projections and significant execution risks for Lundin shareholders," said Jochen Tilk, CEO of Inmet. "Symterra will be a financially strong company with an excellent production base, strong leverage to copper and tremendous growth potential. Symterra will be a vehicle for real value creation that will generate benefits for shareholders from day one."

"The premium Equinox suggests is misleading and does not reflect the risks inherent in the transaction. In the period between the announcement of the Inmet-Lundin merger on January 12 and prior to the Equinox bid, Lundin's VWAP was $7.33 per share. The offer from Equinox, using their VWAP over the same period, offered a small premium of 9% and at current prices, represents a notable discount to Lundin's share price. Taking the considerable financing, transaction costs and closing risks into consideration, an Equinox acquisition of Lundin would clearly be value-destructive. Symterra offers a reserve and resource base that is far superior and is tangible today, not based on yet-to be-completed studies," said Mr. Tilk.

Inmet has identified a number of significant risks associated with the Equinox offer:

  • The Equinox transaction is highly conditional, resulting in significant deal closure risk;
  • $3.2 billion in debt, largely from a one-year bridge facility, will transfer control and value in new Equinox from its shareholders to its lenders with the benefits of a high copper price being given to lenders to service the debt;
  • Lack of clarity on the nature, costs, and inevitable constraints of the re-financing of the Equinox bridge facility;
  • Production growth at Equinox's Lumwana property is based on unsubstantiated "conceptual" resources that have not been confirmed and a feasibility study that has not yet been completed.

On a per-share basis, Symterra delivers better near-term and long-term leverage to copper for Lundin shareholders without the risks, debt burden and uncertainties inherent in the Equinox offer. Inmet believes the proposed creation of Symterra through the friendly merger of Inmet and Lundin is clearly a superior option for shareholders of both companies. "In Symterra, shareholders are being asked to approve a prudent, value-creating transaction whose rationale has been well-accepted by the market. Symterra offers shareholders a very low-risk, high upside transaction," said Mr. Tilk.

About Inmet

Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We have interests in three mining operations: Cayeli (Turkey), Las Cruces (Spain) and Pyhasalmi (Finland). We also have a 100 percent interest in Cobre Panama, a development project in Panama.

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Contact Information

  • Investor Relations:
    Inmet Mining Corporation
    Flora Wood, Director, Investor Relations
    +1 (416) 361-4808
    Media Relations:
    Drysdale Forstner Hamilton Public Affairs
    Bruce Drysdale
    +1 (416) 206-0118 x.220