Lundin Mining emerges as front-runner for Chile copper mine – by Rachelle Younglai (Globe and Mail – July 11, 2014)

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Canada’s Lundin Mining Corp. is emerging as the front-runner to buy a major Freeport-McMoRan Copper & Gold Inc. copper mine in Chile, sources familiar with the matter said.

Toronto-headquartered Lundin would pay more than $2-billion for the Candelaria mine, according to people familiar with the current proposal. It would partner with Franco-Nevada Corp., which would pay up to $1-billion for a stream of the mine’s future gold production, the sources said.

The base-metals miner has been hunting for a copper acquisition for more than two years. Its chief executive officer Paul Conibear told The Globe and Mail in April, 2013, that assets with at least a 10-year mine life and capable of producing some 50,000 tonnes of copper per year would be ideal.

At the time, Mr. Conibear said the company had a strong balance sheet, no debt and has been on the lookout for the right deals for the last year and a half. If Lundin’s proposal succeeds, the Chilean mine would boost Lundin’s copper production significantly.

The interest in copper assets comes after a tumultuous few months for the red metal, used in construction and power generation. It dropped below $3 (U.S.) a pound on fears that China’s slowing economy would weaken demand, though has since rebounded and is trading around $3.25.

Lundin produces copper, zinc, nickel and lead from mines in Europe, Africa and the United States. The company has partnerships with Arizona-based Freeport on the Tenke Fungurume copper mine in the Democratic Republic of Congo, as well as a refinery in Finland.

During the commodity boom a few years ago, Lundin tried to merge with fellow Canadian miner Inmet Mining Corp. before Inmet was taken over last year by First Quantum Minerals Ltd. It also fended off a hostile takeover attempt by Equinox Minerals Ltd. in 2011, which was later taken over by Barrick Gold Corp.

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