Shareholders approve EuroZinc/Lundin merger

Vancouver – Shareholders of Lundin Mining (LUN-T) and EuroZinc Mining (EZM-T, EZM-X) voted in favor of a merger proposal to create a mid-tier copper-zinc company with operations in Europe and growth opportunities in several other continents.

Shareholders of Lundin Mining voted 99.9% in favor of the proposed transaction, well above the 50.1% minimum threshold required for the merger to proceed. Shareholders of EuroZinc were somewhat ambivalent, though the 85.82% approval received was well above the 66.6% minimum threshold required for its shareholder to approve the merger.

The merger proposal calls for EuroZinc shares to be exchanged into shares of Lundin Mining at a ratio of 0.095-to-1, resulting in existing EuroZinc and Lundin Mining shareholders owning about 56.7% and 43.3%, respectively, of the combined company. The new Lundin Mining would have a market capitalization of $3.3 billion, about US$270 million in cash and investments, and long-term debt of US$43 million.

Lundin Mining’s core operating assets are the Zinkgruvan zinc-lead-silver mine and Storliden zinc-copper mine in Sweden, and the Galmoy zinc mine in Ireland.

EuroZinc’s main holdings are the producing Neves-Corvo copper-zinc mine and the nearby past-producing Aljustrel mine, poised to resume production in 2007. Both mines are situated in Portugal, where the company also holds a large portfolio of exploration projects.

The combined company would have annual production of about 450 million lbs. of contained zinc and 200 million lbs. of contained copper from the European mines.

The post-merger Lundin Mining would also hold a large portfolio of exploration and development projects, and strategic investments and alliances with companies holding large zinc or base metal projects in Russia, Eritrea, and the Islamic Republic of Iran, among others. The merged entity also intends to examine other potential acquisition opportunities as part of a long-term goal to “create the world’s leading mining company.”