Canadian miners Quadra, FNX in $1.5-billion merger deal
25 Mar 2010
In another consolidation move in the Canadian mining industry, copper miner Quadra Mining Limited (Quadra) has agreed to a friendly merger with rival FNX Mining Company Inc (FNX) through a stock swap deal that would create a leading intermediate copper producer with a market capitalisation of $3.5 billion.
The combination, termed as ''a merger of equals'' has been unanimously agreed to by the boards of both the companies, and the combined entity will be known as Quadra FNX Mining Limited (Quadra FNX).
Under the terms of the deal, each FNX share will be exchanged for 0.87 Quadra shares. On completion of the transaction, existing Quadra shareholders will own approximately 52 per cent of the new company while the remaining 48 per cent will be owned by FNX shareholders, a statement said.
Vancouver-based Quadra is a resources company whose major assets include the Robinson mine in Nevada, producing copper and gold, the Carlota copper mine in Arizona, and the Franke copper mine in northern Chile. Its development projects are Sierra Gorda copper-molybdenum mine in Chile and the Malmbjerg molybdenum mine in Greenland.
Toronto-based FNX is a producer and developer of various minerals including copper, nickel, cobalt, platinum, palladium and gold and its primary assets are located in the prolific Sudbury mining camp in Ontario. The company has a strong balance sheet, zero debt and imminent production growth plans focused on higher margin, copper-precious metal ores, including the emerging, high grade Levack Footwall Deposit.
Paul Blythe, the present CEO of Quadra who will take over as the CEO of the combined entity said, ''The merger of Quadra and FNX is a springboard transaction that creates a leading intermediate copper producer with financial strength, a solid asset base, and an experienced and entrepreneurial management team."
FNX chairman and CEO Terry MacGibbon, who would be the non-executive chairman of the new company: '' This merger of equals will result in the establishment of a new, mid-cap, Canadian mining company with existing mining operations in the low risk Americas (Canada, USA and Chile), great internal growth (Levack Footwall Deposit in Sudbury and the Sierra Gorda property in Chile) and the opportunity to grow into a leading mining company.''
