Nevsun recommends shareholders take no action over potential Lundin acquisition offer
Published by Nicholas Woodroof,
Global Mining Review,
Following the announcement by Lundin Mining Corp. – the Canadian base metals mining company – that it may make a formal offer to acquire Nevsun Resources Ltd, Nevsun – which has assets in Serbia and Eritrea – has advised its shareholders that no formal offer has been made thus far, and that shareholders should take no action in response to Lundin’s announcement.
Peter Kukielski, Nevsun's President & CEO, said: "This latest announcement from Lundin continues to ignore the fundamental value of Nevsun and its assets. Despite the progress we have made in enhancing Nevsun's value, Lundin's notional takeover offer represents only a 13% premium to Nevsun's closing trading price of CAN$4.21 per share on the TSX on 16 July 2018, and only a 9.1% premium to the volume weighted average trading price of Nevsun's shares over the 30 days ended 16 July 2018."
Kukielski added: "Since Lundin first expressed interest in Nevsun, we have released a pre-feasibility study (PFS) for the Timok Upper Zone [in Serbia] with an after-tax NAV of US$1.82 billion, received a critical exploration decline construction permit in February, began construction in May, and in June released an initial inferred resource for the Timok Lower Zone containing 31.5 billion lb of copper and 9.6 million oz. of gold. At the same time we have extended the mine life at Bisha [in Eritrea] through 2022, adding 3.3 million t of high-grade ore to the mill, resulting in additional payable production of 470 million lb of zinc and 52 millions lb of copper over this time frame. The work we have been doing has also been noticed by several strategic parties that have expressed an interest in participating in the development of Timok."
The company said that, in the event of a formal offer being received, a special committee of independent Nevsun directors would consult with advisors before giving its recommendations to the board as well as shareholders.
Nevsun has already rejected multiple proposals from Lundin this year, including one in May where Lundin partnered with Euro Sun Mining, which is also Canadian-based.
Read the article online at: https://www.globalminingreview.com/finance-business/18072018/nevsun-recommends-shareholders-take-no-action-over-potential-lundin-acquisition-offer/
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