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Enter Symbol
or Name
USA
CA



Lumina Copper Corp
Symbol LCC
Shares Issued 44,007,402
Close 2014-06-16 C$ 7.80
Market Cap C$ 343,257,736
Recent Sedar Documents

First Quantum to acquire Lumina Copper for $470-million

2014-06-17 11:43 ET - News Release

See News Release (C-FM) First Quantum Minerals Ltd

Mr. Clive Newall of First Quantum reports

LUMINA COPPER CORP. TO BE ACQUIRED BY FIRST QUANTUM MINERALS, CASH AND SHARE TRANSACTION VALUED AT APPROXIMATELY $470 MILLION

First Quantum Minerals Ltd. and Lumina Copper Corp. have entered into a definitive agreement, pursuant to which First Quantum will acquire, by way of a court-approved plan of arrangement, all of the outstanding securities of Lumina. Based upon the consideration, the total value of 100 per cent of the fully diluted common shares of Lumina is approximately $470-million. First Quantum currently owns 2.5 million of Lumina's outstanding common shares.

Lumina is the 100-per-cent owner of the Taca Taca copper deposit located in the Puna region of Salta province in northwest Argentina, approximately 120 kilometres east of the Escondida, the world's largest producing copper mine. Taca Taca currently has a reported National Instrument 43-101-compliant indicated mineral resource estimate of approximately 21.15 billion pounds of copper (9.6 million tonnes of copper) contained in 2.17 billion tonnes grading 0.44 per cent copper, 0.08 gram per tonne gold and 0.013 per cent molybdenum (0.57 per cent copper equivalent) and an inferred mineral resource estimate of approximately 7.55 billion pounds of copper (3.4 million tonnes of copper) contained in 921 million tonnes grading 0.37 per cent copper, 0.05 gram per tonne gold and 0.012 per cent molybdenum (0.47 per cent copper equivalent), using a 0.3-per-cent-copper-equivalent cut-off (1). These estimates are defined by 148,000 metres of drilling. The deposit remains open in some areas to depth and along the southern boundary of the northeastern limb.

Commenting on the proposed transaction, Ross Beaty, Lumina's founder and largest shareholder, said: "I am very pleased with First Quantum's proposed acquisition of our company. First Quantum is an outstanding mining company with a significant and growing portfolio of copper operations. In our view, they are the most capable company in the world to develop Taca Taca into a major copper mine. This transaction provides Lumina shareholders with the option to retain exposure to Taca Taca's future development in the hands of a world-class mine development and operating team through ownership of First Quantum's shares. I encourage all Lumina shareholders to vote in favour of this transaction."

Philip Pascall, chairman and chief executive officer of First Quantum, said: "The acquisition of Lumina is another step in First Quantum's long-stated objective of geographical diversification through the acquisition of world-class, early stage copper assets. Taca Taca will significantly add to First Quantum's development pipeline, and is at the stage where we can apply our resources and development expertise to realize its full potential and further add to First Quantum's copper production profile. Once the acquisition of Lumina has been completed, we will immediately review the Taca Taca project to determine the most efficient and economical timing for its development in the context of the projects that we are currently developing."

About the transaction

The transaction will be carried out by way of a statutory plan of arrangement, pursuant to the Business Corporations Act (British Columbia), and must be approved by the Supreme Court of British Columbia and the affirmative vote of 66-2/3 per cent of Lumina shareholders.

The completion of the transaction is subject to customary closing conditions, including the receipt of any required regulatory approvals.

Under the arrangement, Lumina shareholders may elect to receive, in exchange for each common share of Lumina held:

  • $5 in cash and 0.2174 of a First Quantum common share;
  • 0.4348 of a First Quantum common share and one cent in cash, subject to proration as to the number of First Quantum common shares if the total number of First Quantum common shares Lumina shareholders elect to receive exceeds 9,669,182 First Quantum common shares;
  • $10 in cash, subject to proration as to the amount of cash if the total cash Lumina shareholders elect to receive exceeds $222,391,175.

Lumina shareholders who do not elect any of the three options above shall be deemed to have elected to receive the cash alternative in respect of all of their Lumina common shares.

The $10 cash consideration for each common share of Lumina represents a 34-per-cent premium to the volume-weighted average trading price of the common shares of Lumina on the TSX Venture Exchange of $7.44 for the 20 trading days ended June 16, 2014, and a 28-per-cent premium to the closing price of the common shares of Lumina on the TSX-V of $7.80 on June 16, 2014.

The boards of directors of both companies have unanimously approved the transaction.

The board of directors of Lumina, after consultation with its financial and legal advisers and based, in part, upon the unanimous recommendation of an independent committee of the board of directors of Lumina, has determined unanimously that the arrangement is fair to the Lumina shareholders and is in the best interest of Lumina. Lumina's board of directors unanimously recommends that the Lumina shareholders vote in favour of the arrangement. Raymond James Ltd. has been engaged to provide an opinion that the transaction is fair, from a financial point of view, to the Lumina shareholders (other than First Quantum). Borden Ladner Gervais LLP is acting as legal counsel to Lumina.

First Quantum's financial adviser is RBC Capital Markets, and its legal adviser is Fasken Martineau DuMoulin LLP.

Holders of approximately 33.6 per cent of Lumina's issued and outstanding common shares (on a fully diluted basis), including all of Lumina's directors, officers and certain major shareholders, have signed voting support agreements, pursuant to which they have agreed to vote in favour of the arrangement.

In the event that the transaction is not completed, Lumina has agreed to pay First Quantum a termination fee of approximately $16.25-million, under certain circumstances. Lumina has also provided First Quantum with certain other customary rights, including a right to match any superior offers.

First Quantum intends to finance the cash portion of the transaction from its existing cash resources. The transaction is not contingent on any financing condition.

Full details of the transaction will be included in an information circular to be mailed to Lumina shareholders in accordance with applicable securities laws. The transaction is expected to close on or before Aug. 30, 2014. All shareholders are urged to read the proxy circular once it becomes available as it will contain additional important information concerning the transaction.

Qualified person

Andrew Carstensen, CPG, Lumina's vice-president, exploration, and a qualified person as defined by NI 43-101, Standards of Disclosure for Mineral Projects, has reviewed and approved the contents of this news release as they relate to the mineral resource estimate and technical disclosure on the Taca Taca project.

Scientific and technical disclosure

For complete disclosure of Lumina's mineral resource estimate, refer to the preliminary economic assessment report on the Taca Taca copper-gold-molybdenum project dated May 24, 2013, prepared by Ausenco Solutions Canada Inc. with an effective date of April 9, 2013, which is available under Lumina's profile at SEDAR.

(1) Copper equivalent is calculated using $2 (U.S.) per pound copper, $800 (U.S.) per ounce gold and $12 (U.S.) per pound molybdenum, and is not adjusted for mining and metallurgical recoveries as these remain uncertain. The formula used is as follows: CuEq equals Cu per cent plus (Au gram per tonne multiplied by 0.583) plus (Mo per cent multiplied by six).

Conference call details

First Quantum and Lumina will host a conference call to discuss the transaction.

Date:  June 17, 2014

Time:  12:15 p.m. (EST); 5:15 p.m. (BST)

Dial-in numbers:  416-340-8527 or 800-766-6630 (North American toll-free)

Instant replay dial-in numbers:  905-694-9451 or 800-408-3053 (North American toll-free)

Passcode:  6198300

End date:  July 1, 2014

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