EuroZinc raises cash for Neves Corvo bid

Vancouver In its bid to the giant Neves Corvo copper mine, in Portugal, EuroZinc Mining (EZM-V) has arranged a $30 million special warrant bought deal financing.

The junior entered into the financing agreement with a syndicate of underwriters led by Paradigm Capital and Pacific International Securities. The financing will consist of 50 million special warrants for total gross proceeds of $20.0 million. Each special warrant will be sold at a price of 40 and to be convertible, for no additional consideration, into one unit consisting of one EuroZinc common share and one-half of one share purchase warrant. Each full share purchase warrant shall entitle the holder to purchase one common share at a price of 50 exercisable for the first year, rising to an exercise price of 75 for the subsequent year, after the closing date of the offering. The underwriters have also exercised their option to purchase an additional 25 million special warrants at the issue price for an additional $10 million.

The proceeds of the offering will be placed in escrow pending the announcement that the definitive agreement has been signed. Proceeds from the placement will be used for the deposit required for the purchase of Neves Corvo in the event that EuroZinc is announced as the winner. If a definitive agreement is not signed by April 30, 2004, special warrant holders may elect to cancel their special warrants and have their subscription proceeds returned

EuroZinc’s bid to acquire the Neves Corvo copper mine in Portugal comes after the Portuguese government announced in late November, 2003, that the mine would be sold through a public tender process.

The mine is owned by Somincor, a Portuguese company owned 51% by Empresa de Desenvolvimento Mineiro, (EDM), the Portuguese government-owned mining company, and 49% by Rio Tinto (RPT-N).

All bids for the mine have been submitted and a final candidate is expected to be chosen by February, 2004. The sale is expected to be closed by the end of May.

Neves Corvo , which was built 14 years ago processed 320,000 tonnes of copper concentrates in 2002 for sale to international smelters. The mine has extensive copper and zinc resources and has significant exploration potential for additional resources.

EuroZinc believes that common ownership of Somincor and Pirites Alentejanas, the 99.6%-owned Portuguese subsidiary of EuroZinc, which owns the Aljustrel zinc mine, situated just 40 km northwest of the Neves Corvo mine, would result in significant synergies and benefits for both operations. The successful acquisition of Somincor would also elevate EuroZinc to mid-tier status as a diversified base-metal mining company.

EuroZinc’s bid for Somincor is helped by a co-operation agreement with Boliden and the Finnish-based and Helsinki-listed company, Outokumpu. According to this agreement, Outokumpu and Boliden will support EuroZinc with general operating and technology services. Outokumpu will enter into a technical services agreement to support EuroZinc with a range of technology services including equipment supply. Boliden will enter into a long-term agreement for off-take of copper concentrates.