Inmet Mining and Lundin Mining announced January 12 they have entered into an agreement to merge, creating a new, international, copper-focused mining company to be named Symterra Corp. Market capitalization of the companies at the time of the announcement was about $4.6 billion for Inmet and $4.3 billion for Lundin. Both companies are headquartered in Toronto, Canada, and both have their producing assets outside of Canada, primarily, but not exclusively, in Europe.

The companies’ shareholders are scheduled to vote on the agreement in mid-March 2011. Lukas Lundin, currently chairman of Lundin, would become non-executive chairman of Symterra, and Jochen Tilk, currently president and CEO of Inmet, would become president and CEO of Symterra.

Inmet would bring three 100%-owned European mines to the new company: the Çayeli underground copper and zinc mine located on the Black Sea coast of northeastern Turkey, the Las Cruces open-pit copper mine located in southern Spain, and the Pyhäsalmi underground copper and zinc mine located in central Finland. Inmet also has an 18% interest in the Ok Tedi mine in Papua New Guinea. The company’s large, 100%-owned Cobre Panama open-pit copper-gold development project in Panama is currently working its way through the permitting process.

Lundin’s European mines, all 100%-owned, include: the underground Neves-Corvo copper-zinc mine at the western end of the Iberian Pyrite Belt in Portugal, the underground Zinkgruvan zinc-lead-silver mine about 250 km southwest of Stockholm, Sweden, and the open-pit Aguablanca nickel-copper mine in Badajoz province, Spain, 140 km from the major seaport at Huelva. Lundin’s Galmoy zinc mine in Ireland is nearing the end of its life but will have some remnant ore production during 2011. Lundin also has a 24% interest in the major, new, open-pit Tenke Fungurume copper-cobalt mine in Katanga province, Democratic Republic of the Congo. Tenke Fungurume is 56%-owned and operated by Freeport-McMoRan.

Copper would account for 75% of estimated pro-forma, full-year 2011 earnings of Symterra, with the remainder coming 15% from zinc and 10% from other metals. The company would have a cash balance of about $1.3 billion, substantial cash flow generation, and no debt.

Lukas Lundin said: “The long-term fundamentals for copper are compelling. With solid operating assets and the ability to fund its world-class growth projects, Symterra provides one of the best growth profiles for copper amongst major mining companies, combined with attractive exposure to zinc and other metals. I am excited about the value that will be generated for our collective stakeholders.”

Jochen Tilk said: “Symterra will have a series of long-life, low-cost mines in favorable mining jurisdictions and two world-class growth projects in Cobre Panama and the expanded Tenke Fungurume. The increased critical mass enables us to not only develop our current projects, but also to compete for future opportunities as they arise.”

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