Boliden AB (publ) (OM:BOL) has signed a definitive agreement to acquire Sociedade Mineira de Neves-Corvo, S.A. and Zinkgruvan Mining AB from Lundin Mining Corporation (TSX:LUN) for $1.5 billion on December 9, 2024. A consideration for up to $1.52 billion in cash which is cash and debt-free basis, consisting of $1.37 billion in upfront cash consideration at closing and up to $150 million in contingent consideration, Up to $50 million in contingent payments at Zinkgruvan is tied to underlying zinc prices. Boliden will pay Lundin 50% of the incremental revenue realized in each of the two calendar years between 2025 and 2026 where the average realized zinc price on an annual calendar year exceeds $1.40/lb zinc, as per the LME reference prices, provided a minimum annual production of 135 million pounds of payable zinc is achieved. Incremental revenue is calculated using total payable sales volumes of zinc for an annual calendar year period and tax affected using Sweden's current corporate income tax rate. The Zinkgruvan Contingent Payment is subject to a maximum payout of $25 million per calendar year. Total consideration at closing may also be subject to other customary adjustments in the event of non-permitted leakage from the Lock-Box. The terms of the agreement incorporate a Lock-Box completion mechanism, with the purchase price based on a cash-free and debt-free enterprise value of $1.3 billion, and assuming a normalized level of working capital. Based on the Lock-Box financial statements as of August 31, 2024, the upfront cash consideration to be paid at closing is $1.37 billion. The upfront cash consideration will also accrue interest at a 5% annual interest rate from August 31, 2024 to closing and is payable to the Company at closing. As part of acquisition, Mineral Resources and Mineral Reserves for those assets have been included in the Mineral Reserve and Mineral Resource statement and will be removed once the transaction is completed. The proceeds from the Transaction will strengthen the Company's balance sheet and support its growth plans in the Vicuña District. Post completion, Boliden will operate seven mining areas and five smelters, mainly focused on the value chains for zinc and copper. Up to $100 million in contingent payments at Neves-Corvo is tied to underlying copper and zinc prices (Neves-Corvo Contingent Payment). Boliden will pay Lundin Mining 60% of the incremental revenue realized in each of the three calendar years between 2025 and 2027 where the average realized price on a semi-annual calendar period exceeds $4.50/lb copper and/or $1.30/lb zinc as per the London Metal Exchange (LME) reference prices. In 2023, Neves-Corvo mine generated EBITDA approximately $91 million and Zinkgruvan mine generated EBITDA approximately $104 million.

The upfront cash consideration will be fully financed through a bridge loan provided by BNP PARIBAS, RBC Capital Markets (RBC) and Skandinaviska Enskilda Banken AB (SEB), and the remaining amount in medium and long-term debt financing. Boliden?s intention is to refinance the bridge loan by securing additional medium and long-term debt financing and issuing new equity through a share issue. During the quarter, a new multilateral bridge loan agreement was signed. The loan amounts to $1,400 million and secures the upfront cash consideration of the acquisition. The take-out of the bridge loan is expected to be roughly 50% long-term debt and approximately 50% equity. Extraordinary General Meeting on January 23, 2025, authorized the Board of Directors to issue new shares with or without preferential rights for existing shareholders. The purpose of a share issue shall be to raise proceeds to achieve an efficient capital structure and refinance approximately half of the bridge loan secured to finance the acquisition of Neves-Corvo and Zinkgruvan. As part of acquisition, Net debt is expected to reduce significantly with the closing of the sale of Neves-Corvo and Zinkgruvan.

The Transaction is anticipated to close in mid-2025, subject to the completion of customary conditions and regulatory approvals, including but not limited to merger control approvals by the EU Commission and approval of the Swedish Inspectorate of Strategic Products under the Swedish FDI Act, and the change of control approval by the Portuguese Directorate-General for Energy and Geology (Direção-Geral de Energia e Geologia) under the Neves-Corvo Concession Contract. The Transaction is not subject to shareholder approval or any financing conditions. As of March 19, 2025, the transaction is expected to be completed in April 2025. As of April 1, 2025, the EU Commission has approved Boliden's acquisition of the mines Somincor-Sociedade Mineira de Neves-Corvo, S.A. ("Neves-Corvo") in Portugal and Zinkgruvan Mining Aktiebolag ("Zinkgruvan") in Sweden. Through the approval, Boliden has received all necessary regulatory approvals to complete the transaction. The regulatory approvals now received include merger control approval by the EU Commission, approval by the Swedish Inspectorate of Strategic Products under the Swedish FDI Act, the change of control approval under the Neves-Corvo Portuguese Concession Contract and the Fundamental Permits Approval. As of April 1, 2025, is expected to be completed in the coming weeks, following the satisfaction of the remaining conditions to closing. The Transaction is expected to be immediately accretive to Boliden?s earnings per share from completion of the Transaction and contribute with >10% to Cash EPS.

RBC Capital Markets Inc. acted as financial advisor for Boliden AB. Evercore Group L.L.C. acted as financial advisor for Boliden AB. Ernst & Young Capital Advisors, LLC acted as financial advisor to Boliden AB. Ulrich Ziche, Maria Dahlin Kolvik, Johan Cederblad, Niclas Winnberg, Victor Ericsson, Jesper Schönbeck and Amanda Knutsson of Vinge and Alex Gorka, Patrick Sullivan, Neil Rosen, Shira Dveris (Corporate), Christine Jackson, Alex Hodgson (Commercial) and David Davachi of Osler, Hoskin & Harcourt LLP acted as legal advisors to Boliden. Cecilia Lohmander, Sylvia Lindén and Tobias Öhd of Kilpatrick Townsend & Stockton Advokat AB acted as legal advisor to Lundin Mining Corporation in connection with sales to Boliden AB. BMO Nesbitt Burns Inc. acted as financial advisor to Lundin Mining Corporation.