The deal significantly bolsters Boliden’s mining production capabilities. Credit: Maksim Safaniuk/Shutterstock.

Lundin Mining has reached a definitive agreement to divest its Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden to Boliden for a total consideration of up to $1.52bn (C$2.15bn).

As per the terms of the agreement, Lundin Mining will receive an upfront cash payment of $1.37bn, based on a cash-free and debt-free enterprise value of $1.3bn as of the 31 August 2024 lock-box date.

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Additionally, Lundin Mining is poised to receive up to $150m in contingent cash consideration, conditional upon the fulfilment of certain specified conditions.

The transaction does not require approval from Lundin Mining’s shareholders, nor is it contingent upon any financing conditions.

This deal significantly bolsters Boliden’s mining production capabilities and enhances its internal supply of zinc and copper concentrates.

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.

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“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.”

The completion of the sale is expected by mid-2025, pending the satisfaction of customary closing conditions and the receipt of necessary regulatory approvals.

Proceeds from the transaction will be used to reinforce Lundin Mining’s balance sheet and facilitate its expansion 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.

“We believe these operations will be an excellent strategic fit under Boliden’s operatorship, and the employees and local stakeholders will benefit from the new ownership and highly experienced management team.”