Canadian base metals miner Nevsun Resources Ltd. is in play. Lundin Mining Corp. and Euro Sun Mining Inc. have made an unsolicited $1.5-billion offer for the Vancouver-based company, but Nevsun has no interest in selling.
In a release on Monday evening, Lundin said that Nevsun had rejected its $5 a share offer despite numerous attempts to do a friendly deal. The proposal, which consists of a mix of cash and shares in both Lundin and Euro Sun, represents a 31-per-cent premium compared to Nevsun’s closing price on the Toronto Stock Exchange on Monday.
Shares in Nevsun had run up more than 10 per cent in the past few trading sessions on little or no news. On Friday alone, the stock rose 8.8 per cent. While the offer is well above Nevsun’s recent share price, it is below the level the stock traded at about three years ago.
Nevsun had a difficult year in 2017, encountering operational problems with ore recoveries and reducing its dividend. Nevsun has two main assets – the Bisha copper and zinc mine in Eritrea and a copper-gold project in Serbia called Timok.
Under the proposal, Euro Sun would gain control of the Eritrean mine, while Lundin would own and fund the development of Timok. In a report released on Monday looking at some of the world’s most desirable copper assets, RBC Dominion Securities Inc. analyst Sam Crittenden noted that the Timok project is potentially a high-return asset.