Mining company Boliden announced this morning that it has entered into an agreement with Lundin Mining to acquire the Neves-Corvo and Zinkgruvan mines. Boliden will pay $1.3 billion plus contingent payments of up to $150 million (depending on future copper and zinc prices). About half of the purchase price is expected to be financed by a future rights issue in the first half of 2025.

The Bank of Åland's analysts believe that the deal is strategic and that it appears to be financially positive for Boliden. "We are particularly positive about the increase in the degree of self-sufficiency in zinc, which is important given the uncertainty about how the Tara mine will develop."

At the same time, the financing is unclear. "The uncertainty is mainly in the financing - it is rarely successful to announce a new issue with unclear terms at an indefinite time," the bank writes.

Kepler Cheuvreux notes that the price tag is lower than they expected. "We had speculated a price range of USD 1.6-2 billion for the two mines." Despite the possible new issue in Boliden, Kepler Cheuvreux sees the transaction as positive. Kepler Cheuvreux reiterates Buy with a target price of SEK 390.

Pareto sees Lundin Mining as the net winner in the transaction given the slight oversupply of zinc forecast for 2025 (compared to the deficit in 2024), although the mines have the potential to improve and lift ebitda higher than current estimates. The research house believes Boliden's stock will trade down ahead of the rights issue. Their recommendation is 'hold' with a target price of SEK 350.

In early trading, Boliden is up 0.7 percent while Lundin Mining is up 1.7 percent.