Friendly All-Cash Agreement for Nevsun to be Acquired by Zijin Mining for US$1.41 billion
Nevsun Resources Ltd. and Zijin Mining Group Co. Ltd. today announce the parties have entered into a definitive agreement pursuant to which Zijin will make a take-over bid to acquire all of the issued and outstanding shares of Nevsun for C$6.00 per share in cash. The Offer is valued at C$1.86 billion (US$1.41 billion).
The cash consideration of C$6.00 per share represents a premium of 57% over Nevsun’s unaffected closing price of C$3.82 on May 7, 2018, the day Lundin Mining Corporation first publicly announced its intention to acquire Nevsun. In addition, the Offer is C$1.25 per Nevsun share, or 26%, more than the C$4.75 per share hostile take-over bid for Nevsun launched by Lundin on July 26, 2018. The Offer is not subject to any financing conditions.
Details of the Offer will be included in a take-over bid circular that Zijin will file and mail to Nevsun shareholders in the coming days, but no later than September 18, 2018. Nevsun’s Board of Directors unanimously recommends that Nevsun shareholders tender their shares to ACCEPT the Offer. The basis for this recommendation will be included in a Nevsun Directors’ Circular that will be filed and mailed to Nevsun shareholders concurrently with the filing of the Zijin take-over bid circular. Nevsun’s Board of Directors continues to recommend that Nevsun shareholders REJECT the hostile take-over bid launched by Lundin on July 26, 2018 and NOT tender their shares to the Lundin offer, which will expire on November 9, 2018.
“This premium transaction is an excellent outcome for our shareholders, and the result of a rigorous and competitive global process to generate maximum value for Nevsun’s outstanding assets,” said Ian Pearce, Chair of Nevsun’s Board of Directors. “The all-cash consideration of C$6.00 per share better reflects the fundamental value of Nevsun’s mining and development assets, while also providing an appropriate change of control premium to our shareholders.”
“Zijin is a proven mining industry operator with a US$10 billion market capitalization and a demonstrated track record of successfully completing international transactions. The Board unanimously recommends that Nevsun shareholders tender their shares to accept this offer and receive the significant value that it represents.”
Chen Jinghe, Chairman of Zijin, added, “Nevsun is an exceptional operator, with a strong focus on safe, efficient and sustainable mining practices. As the new owner we will continue that focus, and we look forward to working with stakeholders in Eritrea and Serbia to advance these mining and development assets. At the Bisha mine in Eritrea, our objective will be to further extend the life of the mine and explore for new deposits. At the Timok Project in Serbia we intend to rapidly develop the Upper Zone and bring it into production, and continue to advance and define the world-class potential of the Lower Zone.”
Nevsun’s Board of Directors had previously rejected the hostile bid from Lundin on the grounds that it, among other reasons, ignored the fundamental value of Nevsun’s assets. Following the launch by Lundin of its hostile bid, a special committee of Nevsun’s independent directors, with the assistance of Nevsun’s advisors, initiated a review of all value-maximizing alternatives, including, but not limited to, an acquisition of all issued and outstanding Nevsun shares. This process has involved a number of global parties undertaking comprehensive due diligence on Nevsun. The Offer is a result of this full strategic alternative review process. Nevsun’s Board of Directors and the Special Committee concluded that the Offer currently represents the best alternative available to Nevsun and provides Nevsun shareholders with the highest value proposition.
Formed in 1993, Zijin is based in Fujian, China and is a leading global mining company specializing in gold, copper, zinc and other mineral resource exploration and development. Zijin manages an extensive portfolio, primarily consisting of gold, copper, zinc, and other metals through investments in China and overseas across nine countries. Listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, Zijin has a market capitalization of approximately US$10 billion.
Among Zijin’s substantial global mining activities are strategic partnerships with Toronto-based Barrick Gold Corporation, related to the Porgera mine in Papua New Guinea; and Vancouver-based Ivanhoe Mines Ltd., related to the Kamoa-Kakula copper project in the Democratic Republic of Congo. Zijin also completed a Board-supported take-over of Norton Gold Fields Ltd., an Australian mining company, in 2015. Zijin is looking to participate in global mineral resources allocation, satisfy the demand arisen from economic development of China, and become a key global player in the production of gold, copper, and zinc. Its strategic focus includes a combination of internationalization, project upsizing and asset securitization, as well as a combination of its core business , gold and copper production,with other types of metal mineral businesses.
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