Boliden AB has agreed to purchase Lundin Mining’s Neves-Corvo operation in Portugal and Zinkgruvan operation in Sweden for up to $1.52 billion.

The agreement includes $1.37 billion in upfront cash consideration and up to $150 million in contingent cash consideration upon satisfaction of certain conditions. The transaction is not subject to shareholder approval or any financing conditions.

“Neves-Corvo and Zinkgruvan have played a significant role in catalyzing the company to become a multi-asset base metals producer of global scale,” Jack Lundin, President and CEO, said in a statement. “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.

“The sale will further strengthen our balance sheet to support the company’s growing portfolio in South America and enable management to concentrate our focus in an area which will provide the greatest long-term value for our shareholders. It is an opportune time to optimize our portfolio through this divestiture as we drive towards becoming a top-tier copper-dominant mining company.”

Up to $100 million in contingent payments at Neves-Corvo is tied to underlying copper and zinc prices. Boliden will pay Lundin Mining 60 percent 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. Incremental revenue is calculated using total payable sales volumes of copper and/or zinc for the semi-annual calendar period and tax affected using Portugal’s current corporate income tax rate.

Up to $50 million in contingent payments at Zinkgruvan is tied to underlying zinc prices. Boliden will pay Lundin 50 percent 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 US$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.

Photo: Lundin Mining https://lundinmining.com/operations/neves-corvo/