Lundin Mining and BHP Form JV for Filo Acquisition

Lundin Mining Corporation and BHP have forged a strategic alliance to secure complete ownership of Filo Corp. through a formalized court-approved transaction. This decisive move underscores the strategic importance of Filo's assets to both mining industry giants. By valuing Filo Corp. at a substantial premium of 32.2% over its recent market performance, equating to C$33.00 per share, the joint venture has made a compelling offer that significantly exceeds the company's historical valuation. This acquisition is poised to reshape the industry landscape and solidify the combined entity's position as a dominant force in the global mining sector.

Upon the completion of the Filo Acquisition, Lundin Mining and BHP will enter into a 50/50 joint venture to oversee and advance the Filo del Sol project (“FDS”) along with Lundin Mining’s Josemaria project. BHP will pay Lundin Mining US$690 million in cash for contributing the Josemaria project to this Joint Venture. This strategic alliance aims to leverage both companies' expertise and resources to develop a high-potential copper district. The joint venture is expected to foster a long-term collaboration, with the goal of establishing a world-class mining complex that could achieve a prominent global ranking in the mining industry.

Jack Lundin, President and CEO of Lundin Mining, expressed enthusiasm for the strategic acquisition of Filo del Sol, a major undeveloped copper-gold-silver deposit in the Vicuña District. He highlighted the immense potential of this project, which, combined with the Josemaria project, could establish a significant, multi-generational mining district. Lundin emphasized the anticipated synergies and cost efficiencies from this combination, positioning the company to become a leading global copper producer. He also valued the partnership with BHP, which brings complementary expertise and skills, crucial for realizing their goal of generating long-term value and establishing a top-tier position in the copper industry.

Securing a seasoned partner for the development of the Vicuña district, Lundin Mining’s partnership with BHP will leverage BHP’s extensive global expertise in managing large-scale projects and integrated district operations. This collaboration will enhance Lundin Mining’s balance sheet, as the transaction results in a marginally positive cash impact. Lundin Mining will pay C$859 million (US$620 million) to Filo shareholders, while receiving US$690 million from BHP for the Josemaria project.

Lundin Mining will continue to fund the Josemaria project entirely until the end of the year, after which funding responsibilities will be shared 50/50 with BHP, with certain adjustment mechanisms in place. Additionally, the joint venture gains access to the Filo del Sol (FDS) project, which features one of the most significant high-grade copper sulphide deposits discovered globally in recent decades.