KGHM Polska Miedź S.A., Europe’s largest copper miner, reached an agreement with Quadra FNX Mining Ltd. to acquire Quadra FNX for C$15/share, which values the transaction at C$2.87 billion. Quadra FNX provides KGHM with an attractive portfolio of world-class development projects. Pro forma 2010 copper production for the combined company will be 1.16 billion lb, increasing to 1.40 billion lb when the project at Sierra Gorda reaches its designed capacity.


KGHM’s CEO Herbert Wirth said the transaction is in line with the company’s strategy of focused development and value creation. “KGHM will benefit greatly from Quadra FNX’s high quality management team and employees and we plan to make Canada our base for further growth in the Americas,” Wirth said. “Quadra FNX has a proven track-record and ambitious future development plans. Coupled with KGHM’s strong balance sheet and substantial positive cash flow, this transaction will provide a solid financial foundation and improve prospects for securing necessary financing for projects in Canada and abroad.” The Canadian headquarters of the combined company will oversee mining operations throughout the Americas, including the large Sierra Gorda project in Chile.

KGHM is committed to maintaining Quadra FNX’s existing plans for its operations and employment in Canada, as well as developing future growth projects, thereby improving the long-term employment prospects in Canada. The board of directors of Quadra FNX has unanimously approved the acquisition. The transaction is also subject to regulatory approvals.

KGHM is a leading global copper and silver producer, headquartered in Lubin, Poland. The company was founded in 1961 and has a long and successful history in copper and silver mining. KGHM is Europe’s largest producer of mined copper and is the ninth largest mined copper producer and third largest silver producer in the world. The company’s mines and smelters are situated in Poland, which provides a favorable location in the middle of the European market. KGHM operates the deepest mines in Europe and has considerable expertise in underground mining. The company operates on its own copper ore deposit (which is the largest copper deposit in the world) and has an integrated production structure, comprising three mines, copper smelters, a wire rod plant and auxiliary units supporting the core business.

In 2010, KGHM produced 937.8 million lb of mined copper, 1.206 billion lb of refined copper, 37.3 million oz silver and 24,949 oz of gold.