Lundin Mining Corp., the base-metals company founded by the billionaire Swedish Lundin family, likely has one or two more acquisitions in its future — but is in no rush to get there.
“We’d like to have five or six operating mines that all have a decent life and a decent quality,” Chief Executive Officer Paul Conibear said in an interview this week from the company’s Toronto headquarters. “We have four now.”
To reach its goal, Lundin Mining is constantly surveying the acquisition scene. The modus operandi of the group includes taking advantage of weak commodity markets to acquire assets it may have been stalking for years. “Sometimes the stars need to align for something to be actionable,” Conibear said.
The company recently offered as much as $262.5 million to buy a stake in Freeport-McMoRan Inc.’s Timok copper and gold project in Serbia. Reservoir Minerals Inc., a partner in the mine, has the right to either welcome Lundin into the fold with Freeport, or shut the company out by matching its bid. Lundin expects to find out Reservoir’s position on May 3. Talks with Reservoir have so far been “constructive,” Conibear said.
If the deal goes forward, Lundin probably will be done making acquisitions for a couple of years. That’s because Timok will require a half billion dollars or more of investment to bring total annual production to 80,000 to 100,000 tons of copper within five years. The company’s total cost, therefore — from acquisition through production — would be $800 million to $1 billion, a size Conibear said is “ideal” for a Lundin deal.
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