- Immediate and attractive premium of 29% to Josemaria's 10-day
VWAP on the TSX for Josemaria shareholders
- Option to select cash or Lundin Mining shares, subject to
proration, without any financing conditions
- Opportunity for continued economic participation in the future
potential of the Josemaria project while
- gaining exposure to Lundin Mining's diversified portfolio of
high-quality operating mines, sector-leading
- production growth, and free cash flow generation in a robust
base metals price environment
- Removes dilution and reduces commodity, development, and
execution risk relative to a standalone development plan
- Lundin Mining has the technical, development, operating and
financial capabilities to advance Josemaria as one of the world's
next copper producers, further enhancing its top tier
potential
- Lundin Mining is committed to the highest standards of ESG and
will be a responsible steward for all Josemaria stakeholders
VANCOUVER, BC, Dec. 20, 2021 /CNW/ - Josemaria Resources
Inc. (TSX: JOSE) (OMX: JOSE) (OTCQB: JOSMF) ("Josemaria" or the
"Company"), is pleased to announce it has entered into a binding
agreement (the "Arrangement Agreement") with Lundin Mining
Corporation ("Lundin Mining") (TSX:LUN ) (OMX: LUMI) whereby Lundin
Mining will acquire all of outstanding common shares of Josemaria
(the "Transaction"). PDF Version
Under the terms of the Transaction, Josemaria shareholders will
receive total consideration of approximately C$625 million on a fully diluted basis,
representing C$1.60 per Josemaria
common share. Josemaria shareholders will be able to elect to
receive the consideration as either (i) C$1.60 in cash or (ii) 0.1487 Lundin Mining
shares, or some combination of cash and shares, subject to
proration. The total consideration will be subject to maximum
aggregate cash consideration of approximately C$183 million (representing 30% of the aggregate
consideration). Any cash payments on Josemaria Resources Shares
traded on Nasdaq Stockholm will be paid in Swedish kronor in
accordance with Euroclear Sweden principles. Shareholders that do
not make an election will be deemed to have elected to receive
Lundin Mining shares. The consideration represents a premium of 31%
and 29% to the closing price and the 10-day volume weighted average
price, respectively, of Josemaria's shares on the TSX for the
period ending December 17, 2021. On
closing of the Transaction, Josemaria shareholders are expected to
own approximately 5% of Lundin Mining, on a fully diluted
basis.
Adam Lundin, President and CEO of
Josemaria said: "I am very happy to announce this transaction
today, which delivers compelling value and an immediate uplift for
all Josemaria Resources shareholders. We have been exploring
different financing options for the advancement and development of
the Josemaria Project and we believe this is the best opportunity
to develop the project without direct dilution or financing risk
for Josemaria shareholders, while fairly compensating them for
their interest in this world-class copper/gold deposit. Josemaria
shareholders will also have the opportunity to continue to
participate in the development of the project through their
post-closing ownership in Lundin Mining, which has the financial
strength, technical expertise, project development experience, and
commitment to the highest ESG practices to advance the Josemaria
project at the pace and scale this project deserves."
Peter Rockandel, President and
CEO, Lundin Mining said: "The
acquisition of the Josemaria project complements Lundin Mining's
existing portfolio of high-quality mines and highlights our focus
on disciplined copper-focused growth to create long-term
shareholder value. Josemaria is a world-class copper project that
has many characteristics which make it the ideal project for Lundin
Mining to advance in the next phase of our growth. Leveraging our
technical expertise, financial strength, and drawing on the
Josemaria team's in-country knowledge, we believe this opportunity
will create meaningful value for all stakeholders. The addition of
Josemaria will elevate Lundin Mining's position to a major base
metals producer with high-quality, low-cost copper exposure."
Details of the Transaction
The Transaction, which is
not subject to any financing conditions, will be carried out by way
of a court-approved plan of arrangement under the Canada Business
Corporations Act and will require approval by (1) 66⅔% of the
votes cast by Josemaria Resources shareholders, and (2) 66⅔% of the
votes cast by Josemaria Resources security holders (comprised of
shareholders and optionholders), at a special meeting expected to
be held to consider the Transaction. In addition to approval by
Josemaria Resources security holders, the Transaction is also
subject to the receipt of court approval, regulatory approvals
including approval by the TSX, the approval by the Swedish
Financial Supervisory Authority of a Swedish prospectus regarding
Lundin Mining's offer to Josemaria Resources' shareholders and the
admission of trading of the new Lundin Mining shares and other
customary closing conditions for transactions of this nature. The
Transaction is expected to be completed in the second quarter of
2022.
The Arrangement Agreement provides for customary deal-protection
provisions, including a non-solicitation covenant on the part of
Josemaria Resources and a right for Lundin Mining to match any
Superior Proposal (as defined in the Arrangement Agreement). The
Arrangement Agreement includes a termination fee of C$20 million, payable by Josemaria Resources,
under certain circumstances (including if the Arrangement Agreement
is terminated in connection with Josemaria Resources pursuing a
Superior Proposal). The directors and senior officers of Josemaria
Resources, in addition to certain securityholders, including the
Lundin Family Trust, owning in aggregate approximately 42% of
Josemaria Resources' voting securities have entered into voting
support agreements pursuant to which they have agreed to vote all
the securities they own or control in favour of the
Transaction.
Josemaria Resources Board of Directors and Special Committee
Recommendations
A special committee comprised of
independent directors of Josemaria Resources (the "Special
Committee") unanimously recommended the Transaction to the board of
directors of the Company (the "Josemaria Board"). The Josemaria
Board has evaluated the Arrangement Agreement with the Company's
management and legal and financial advisors and, following the
receipt and review of the unanimous recommendation from the
Special Committee, the Josemaria Board unanimously (subject to
certain directors declaring a conflict and abstaining from voting
on the matter) determined that the Transaction is in the best
interest of the Company, approved the Transaction and recommended
that the Company's securityholders vote in favour of the
Transaction, all subject to the terms and conditions contained in
the Arrangement Agreement.
BMO Capital Markets has provided an opinion to the Josemaria
Special Committee and Board stating that, as of the date of such
opinions and based upon and subject to various assumptions,
limitations and qualifications therein, the consideration to be
received by the Josemaria Resources shareholders pursuant to the
Arrangement Agreement is fair, from a financial point of view, to
such shareholders.
Further details regarding the terms of the Transaction are set
out in the Arrangement Agreement, which will be publicly filed by
Josemaria Resources under its profile at www.sedar.com. Additional
information regarding the terms of the Arrangement Agreement, the
background to the Transaction, the rationale for the
recommendations made by the Special Committee and the Josemaria
Board and how Josemaria shareholders can participate in and vote at
the special meeting to be held to consider the Transaction, will be
provided in the management information circular for the special
meeting which will be mailed to shareholders and also filed at
www.sedar.com. Shareholders are urged to read these and other
relevant materials when they become available.
Interim Financing To Be Provided By Lundin Mining
Lundin Mining has agreed
in the Arrangement Agreement to provide the Company with a loan in
the principal amount of US$100
million to fund anticipated activities of the Company
between the date of execution of the Arrangement Agreement and
closing of the Transaction.
Advisors and Counsel
BMO Capital Markets is acting as
financial advisor to Josemaria Resources and Blake, Cassels &
Graydon LLP is acting as legal advisor.
Conference Call and Webcast Details
A telephone
conference call and webcast with Lundin Mining and Josemaria
Resources management to discuss the Transaction will be held at
8:00 ET, 14:00
CET on Monday, December 20, 2021. Details are
provided below:
Call-in number for the conference call (North America): + 1 647 788 4922
Call-in number for the conference call (North America Toll Free): +
1 877 223 4471
Call-in number for the conference call (Sweden): + 020 012 3522
To view the live webcast presentation, please log on using this
direct link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=EB73B89B-B0D5-401F-A922-2AC3DC550CD3
The presentation slideshow will also be available in PDF format
for download from the Josemaria website www.josemariaresources.com
before the conference call.
A replay of the telephone conference will be available after the
completion of the conference call until January 20, 2022.
Replay numbers:
North America: +1 800 585 8367or
+1 416 621 4642.
The passcode for the replay is: 6689651
A replay of the webcast will be available by clicking on the
direct link above.
ABOUT JOSEMARIA
Josemaria Resources Inc. is a natural resources company focused on
developing its advanced stage, 100% owned Josemaria Copper-Gold
Project in the San Juan Province of Argentina. A recently published Feasibility
Study (see "NI 43-101 Technical Report, Feasibility Study for
the Josemaria Copper-Gold Project, San Juan Province, Argentina" dated effective September 28, 2020 and filed on November 5, 2020) demonstrates a simple and
conventional open pit copper-gold project with robust economics and
a rapid payback period. Josemaria is a Lundin Group company
and works in partnership with the Lundin Foundation to execute best
practices in responsible mineral development in Argentina where the Lundins have a 30-year
track record of value creation. The Company is a reporting issuer
in all Provinces and its corporate head office is in Vancouver, BC. The Company's shares are listed
on the TSX and on Nasdaq Stockholm under the symbol "JOSE", and
trade on the OTCQB under the symbol "JOSMF".
ADDITIONAL INFORMATION
This is information that the
Company is obliged to make public pursuant to the EU Market Abuse
Regulation. The information was submitted for publication,
through the agency of the contact person set out below, on
December 20, 2021 02:00 EST.
On behalf of the Board of Directors of Josemaria Resources,
Adam Lundin,
President and CEO
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TSX: JOSE | OTCQB: JOSMF | Nasdaq Stockholm: JOSE | WKN: A2PN5S |
ISIN: CA48086P1009
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This press release includes certain "forward-looking information"
and "forward-looking statements" (collectively "forward-looking
information") within the meaning of applicable securities
legislation. All statements, other than statements of historical
fact, included herein, including, without limitation, the
consummation and timing of the Transaction; the satisfaction of the
conditions precedent to the Transaction; the strengths,
characteristics and potential of Lundin Mining post-Transaction;
timing, receipt and anticipated effects of court and regulatory
approvals; the impact of the Transaction on employees and local
stakeholders; and discussion of future plans, projects, objectives,
estimates and forecasts and the timing related thereto.
Forward-looking information is frequently, but not always,
identified by words such as "expects", "anticipates", "believes",
"intends", "estimates", "potential", "possible", and similar
expressions, or statements that events, conditions, or results
"will", "may", "could", or "should" occur or be achieved. These
forward-looking statements may also include statements regarding
perceived merit of properties; exploration plans and budgets;
mineral reserves and resource estimates; work programs; capital
expenditures; timelines; strategic plans; market prices for
precious and base metals; or other statements that are not
statements of fact. In addition, statements relating to "mineral
resources" and "mineral reserves" are deemed to be forward-looking
information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral resources and
mineral reserves described can be profitably produced in the
future.
Forward-looking information involves various risks and
uncertainties. There can be no assurance that such information will
prove to be accurate, and actual results and future events could
differ materially from those anticipated in such information.
Important factors that could cause actual results to differ
materially from the Company's expectations include failure to
receive the required court and regulatory approvals to effect the
Transaction; changes in laws, regulations and government practices;
the potential of a third party making a superior proposal to the
Transaction; risks pertaining to the outbreak of the global
pandemics, including COVID-19; government regulation of mining
operations; environmental risks; and other risks and
uncertainties disclosed in the Company's periodic filings with
Canadian securities regulators and in other Company reports and
documents filed with applicable securities regulatory authorities
from time to time, including the Company's Annual Information Form
available under the Company's profile at www.sedar.com. In
addition, these statements involve assumptions made with regards to
the Company's ability to develop the Josemaria Project and to
achieve the results outlined in the Feasibility Study; the ability
to raise the capital required to fund construction and development
of the Josemaria Project; and the results and impact of future
exploration at the Josemaria Project. The Company's forward-looking
information reflects the beliefs, opinions, and projections on the
date the statements are made. The Company assumes no obligation to
update the forward-looking information or beliefs, opinions,
projections, or other factors, should they change, except as
required by law.
SOURCE Josemaria Resources Inc.