Lundin goes for the rest of North Atlantic

Vancouver – Lundin Mining is offering to purchase the shares in North Atlantic Natural Resources it does not already own, in a share exchange deal worth $15.3 million. The move comes on the heels of Lundin’s recent buy-out of Boliden’s stake in the company and is designed to secure its position as a mid-tier base metals producer in Europe.

The acquisition of Boliden’s shares earlier this month gave Lundin a 74% stake in North Atlantic.

Lundin is offering one of its newly issued shares for every 5.3 shares in North Atlantic, which works out to 10.75 Swedish kronor per share. The offer represents a 10.5% – 12.6% discount to the last price paid for North Atlantic’s shares on the Swedish stock exhange, or a total of 87.3 million Swedish kronor which is roughly $15.3 million.

North Atlantic’s main asset is the Storliden zinc-copper-gold-silver mine in northern Sweden. The mine entered production in 2002 as a joint venture between North Atlantic and Boliden, with the latter as operator.

At the end of 2003, Storliden had proven and probable reserves of 1.1 million tonnes grading 9.8% zinc and 3.5% copper, plus 0.3 gram gold and 25.4 grams silver per tonne. Production has so far exceeded 333,000 tonnes of ore.

North Atlantic plans to extend the life of the Storliden mine through drilling in the immediate area.The company holds other exploration permits in the region, including Lappvattnet (copper-nickel) and Copperstone (copper).

Lundin’s main asset is the Zinkgruvan zinc-silver mine, 200 km southwest of Stockholm.

With North Atlantic under its wing, Lundin will have strong cash flow from the Zinkgruvan and Storliden mines. This will give it the funds it needs to step up exploration in the Skellefte, Bergslangen and Norrbotten mining districts in Sweden.

Lundin and North Atlantic already share some management: Lundin President Edward Posey also presides over North Atlantic, and Lundin Chairman Lukas Lundin is on the board of North Atlantic.

With plenty of cash on hand, Lundin says it is on the look out for other major acquisitions.