VANCOUVER (CP) -- Tenke Mining Corp. [TSX:TNK] shareholders voted 96% in favour of a takeover offer from Lundin Mining Corp. [TSX:LUN] on Tuesday giving that company a key stake in a copper and cobalt project under development in the Democratic Republic of Congo.
Tenke chief executive Paul Conibear called Tenke Fungurume one of the highest-grade undeveloped copper deposits in the world.
''It has the capability of becoming another Escondida, another Grasberg, so one of the largest copper producers in the world,'' Conibear said of the project.
''Congo has gone through a remarkable set of changes and improvements over the last several years, so it has created an environment where we can develop a large project like this.''
Under the deal, each Tenke common share will be exchanged for 1.73 Lundin Mining shares in a deal worth roughly $1.4 billion. Tenke shareholders would hold 27% of the combined company.
As part of the deal, Tenke would transfer its South American assets and US$5 million cash to a new subsidiary whose shares would be distributed to Tenke investors, Suramina Resources Inc. which is expected to begin trading on the Toronto Stock Exchange after the deal closes.
The deal, which still requires approval by Lundin shareholders at a meeting Tuesday afternoon, was supported by the Lundin family interests, as well as directors and senior officers of both Lundin Mining and Tenke.
The deal is expected to close July 3.
Conibear will join Lundin Mining in a senior position responsible for Tenke Fungurume. He would also head the new company running Tenke's assets in Argentina and Chile. ''Lundin Mining has a very aggressive growth plan, so I will be involved in a number of those initiatives, in particular for African development,'' Conibear said.
Tenke has a 24.75% interest in Tenke Fungurume. Operating partner Freeport-McMoRan Copper & Gold Inc., formerly Phelps Dodge Corp., holds 57.75% and Congolese state enterprise La Generale des carrieres et des mines has 17.5%.
As well as Tenke Fungurume, Vancouver-based Tenke holds extensive copper and gold exploration properties in South America.
Lundin owns operating mines in Portugal, Sweden and Ireland as well as a 49% stake in one of the world's largest zinc projects, Ozernoe in Russia.
Lundin is still on the hunt for acquisitions and is looking to do one or two more in 2007, CEO Karl-Axel Waplan said Monday as shareholders approved the takeover of Tenke Mining Corp.
Waplan said the acquisitions will likely be outside of Europe.
''Sources in Europe are coming to an end very soon, so we have to go outside most probably,'' Waplan said after the company's annual meeting of shareholders.
''You don't have the big projects anymore in Europe or North America, so we have to look in Africa, South America and Asia.''
Waplan, who remained bullish on base metal prices, said the company could look to use cash or stock to make deals.
''We have been talking and looking at different projects and some of them have been on the table and then gone off the table and some are back again,'' he said.
Lundin has grown aggressively by acquisition in recent months after merging last year with Eurozinc.
In April, Lundin made a $865-million takeover bid for Rio Narcea Gold Mines Ltd. [TSX:RNG], aiming to bump up revenue from the Aguablanca nickel mine in Spain. That offer expires June 29
(c) The Canadian Press 2006
