Lundin targets mining assets

Canada’s Lundin Mining is looking to buy more mining assets, CEO Marie Inkster said this week, after the company announced its purchase of a Brazilian copper-gold mine from Yamana Gold for more than $1bn.

The Toronto-based company was seeking a project where exploration was complete, which it could take over and build, Inkster said.

Lundin preferred a copper asset, but would also consider a zinc polymetallic mine, with nickel a distant third option, she said.

“Our leverage will still be extremely low after we close this deal, and we have great mines that are cash flowing,” Inkster said in an interview.

“But there’s a scarcity of copper assets right now, and we have to be patient.”

Lundin resumed its search for copper assets after it lost a hostile takeover battle for rival Nevsun Resources to China’s Zijin Mining in September.

Inkster declined to say how much the company was willing to spend on further deals, although she said in 2018 the company was willing to spend up to $3bn on acquisitions.

The Chapada mine, located about’ Brazil s capital 270km of northwest Brasilia, began of operating in 2007 and is expected to produce about 54,500 tonnes of copper and 100,000oz of gold in 2019.

The deal would increase Lundin’s previous copper production outlook for 2019 by 26%, the company said.

Lundin shares closed up 8% at C$7.38, their highest since July, in Toronto.

Yamana shares ended the day down 3.5% at C$3.30 in Toronto, compared with the S&P/TSX Global Gold index’s 0.6% gain.