Lundin Mining (LUN) M&A Announcement summary

Deal rationale and strategic fit

• Lundin Mining and BHP will jointly acquire Filo and combine it with the Josemaria project, forming a 50/50 JV to consolidate the Vicuña District in Argentina, creating a globally significant copper platform and leveraging BHP's operational expertise and financial strength.

• The partnership enables phased, large-scale copper development, shared infrastructure, and economies of scale, supporting disciplined growth and reducing Lundin Mining's funding requirements.

• The JV aims to create one of the world's largest base and precious metals mining complexes, transforming Lundin Mining's growth trajectory.

• The deal positions both companies as top-tier copper producers with global scale and long-term growth potential.

Financial terms and conditions

• Filo shareholders receive C$33.00 per share, a 32.2% premium to the 30-day VWAP, valuing Filo at approximately C$4.1 billion; consideration can be in cash, Lundin shares, or a combination, subject to caps and pro-ration.

• Lundin Mining pays up to C$859 million in cash and C$1,289 million in shares; BHP pays C$1,908 million in cash and US$690 million to Lundin for a 50% interest in Josemaria.

• Interim financing of up to C$115 million is provided to Filo via private placement, equally funded by Lundin and BHP.

• Deal expected to close in early 2025, subject to shareholder, court, stock exchange, and regulatory approvals.

Synergies and expected cost savings

• Integration of assets allows for shared infrastructure, supply chain, and logistics, minimizing environmental impact and reducing capital and operating costs.

• Proximity of assets enables economies of scale, phased development, and optimization of ore sources and sequencing.

• Opportunity to leverage existing port, desalination, and major infrastructure, including TSF, roads, and powerlines.