First Quantum Minerals LTD To Acquire Lumina Copper Corp for $470M in cash and stock
First Quantum Minerals and Lumina Copper Corp. (TSX VENTURE:LCC) have entered into a definitive agreement pursuant to which First Quantum will acquire all of the outstanding securities of Lumina. Based upon the consideration, the total value of 100% 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.
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 662/3% 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:
-- $5.00 in cash and 0.2174 of a First Quantum common share;
-- 0.4348 of a First Quantum common share and $0.01 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; or
-- $10.00 in cash, subject to proration as to the amount of cash if the total cash Lumina shareholders elect to receive exceeds $222,391,175.
The $10.00 cash consideration for each common share of Lumina represents a 34% 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% premium to the closing price of the common shares of Lumina on the TSX Venture Exchange of $7.80 on June 16, 2014.
Lumina is the 100% 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% copper, 0.08g/t gold and 0.013% molybdenum (0.57% 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% copper, 0.05g/t gold and 0.012% molybdenum (0.47% copper equivalent), using a 0.3% copper equivalent cut-off. 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, Mr. 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."