Lundin Mining Corporation (TSX: LUN) today reported that it has agreed to sell the remainder of its specialty cobalt business. The operation, referred to as Freeport Cobalt, was held by the company via its 24% stake in Koboltti Chemicals Holding Limited, and is to be sold to Jervois Mining Limited.
The arrangement will see Jervois acquiring 100% of Freeport Cobalt for $85 million in cash and shares of Jervois, as well as working capital, which is to be determined at closing.
Upon closing, the consideration may be inclusive of up to 9.9% in shares of Jervois. Lundin Mining now estimates its share of the proceeds, with the assumption of a full allotment of shares and excluding any contingent consideration, would come to roughly $42 million in cash, along with its pro-rata 24% share of shares in Jervois.
Lundin Mining has stated the reason for selling as being that the company no longer sees the strategic necessity of maintaining control of the cobalt operation, after the sale of the company’s interests in Tenke Fungurume in 2016, as well as the cobalt refining facility in Kokkola in 2019.
Lundin Mining Corporation last traded on the TSX at $11.55.
Information for this briefing was found via Sedar and Lundin Mining. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.