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Tender your shares to Lundin Mining's

All-Cash Offer For:

A significant premium: An 82% premium as of the date of Lundin's first proposal to Nevsun

Certainty of value from your investment

Immediate Liquidity

Avoid risks of substantial shareholder dilution, financing, and execution

FAQ

  • What is the Offer?

    1172628 B.C. Ltd. (the “Offeror”), a wholly owned subsidiary of Lundin Mining Corporation (“Lundin Mining”) is offering, subject to the terms and conditions set forth in the Offer, Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery, C$4.75 in cash for each Nevsun Share.

    A Shareholder depositing his Nevsun Shares will be deemed to have deposited all the associated rights issued under the Shareholder Rights Plan of Nevsun dated June 8, 2011. No additional payment will be made for the SRP Rights and no part of the consideration to be paid by the Offeror will be allocated to the SRP Rights.

    The Offer represents a significant premium of 82% to the closing price of C$2.61 per Nevsun Share on the TSX as of February 6, 2018, the date of Lundin Mining’s first proposal to Nevsun. The Offer also represents a significant premium of 33% to the closing price of C$3.58 per Nevsun Share as of April 30, 2018, the date of Lundin Mining’s previously announced public proposal to Nevsun and a 42% premium to the volume weighted average trading price of C$3.36 per Nevsun Share on the TSX over the 20 trading days ended April 30, 2018.

    See Section 1 of the Offer, “The Offer” in the Circular.

  • Who is offering to purchase my Nevsun shares?

    The Offeror, meaning 1172628 B.C. Ltd., a wholly-owned subsidiary of Lundin Mining, is making the Offer, and was incorporated for the sole purpose of making the Offer. The Offeror is a corporation organized under the Laws of British Columbia. The Offeror's registered office is located at Suite 2200 -- 885 West Georgia Street, Vancouver, British Columbia, V6C 3E8.

    Lundin Mining is a diversified Canadian base metals mining company with operations in Chile, the United States of America, Portugal, and Sweden, primarily producing copper, nickel and zinc. In addition, Lundin Mining holds an indirect 24% equity stake in the Freeport Cobalt Oy business, which includes a cobalt refinery located in Kokkola, Finland.

    See "The Offeror" in Section 1 of the Circular.

  • What are the classes of securities sought in the offer?

    1172628 B.C. Ltd. (the "Offeror"), a wholly owned subsidiary of Lundin Mining Corporation ("Lundin Mining") is offering to purchase all the outstanding Nevsun Shares (including any Nevsun Shares to be issued upon exercise, exchange or conversion of the Convertible Securities), together with the associated SRP Rights, meaning those rights issued under the Shareholder Rights Plan of Nevsun dated June 8, 2011.

    Based on publicly available information, as of April 25, 2018, there were 302,321,670 Nevsun Shares outstanding and 309,871,903 Nevsun Shares on a fully-diluted basis. The Offer includes Nevsun Shares that may become outstanding after the date of this Offer, but before the expiration of the Offer, upon exercise, conversion or exchange of any Convertible Securities. The Offer is not being made for any Convertible Securities or other rights to acquire Nevsun Shares.

    Based solely on the above information, the Offeror understands that, assuming the exercise of all Convertible Securities, 309,871,903 Nevsun Shares would be subject to the Offer.

    See Section 1 of the Offer, “The Offer” in the Circular.

  • Why are you making this offer?

    Following attempts to constructively engage Nevsun since early February 2018, after having made a series of proposals, Lundin Mining believes that the best course of action now is to make an all cash offer directly to Shareholders. The Offer represents the clearest path forward for Lundin Mining to acquire the Timok Project and for Shareholders to realize on the value of their investment without dilution and financing risk.

    1172628 B.C. Ltd. (the "Offeror"), a wholly owned subsidiary of Lundin Mining is making the Offer because it wants to acquire control of, and ultimately the entire equity interest in, Nevsun. If the Offeror completes the Offer but does not then own 100% of the Nevsun Shares, the Offeror currently intends to acquire any Nevsun Shares not deposited to the Offer in a second-step transaction. This transaction would likely take the form of a Compulsory Acquisition or a Subsequent Acquisition Transaction.

    See "Reasons to Accept the Offer" in Section 4 of the Circular, "Purpose of the Offer" in Section 5 of the Circular, and "Acquisition of Nevsun Shares Not Deposited Pursuant to the Offer" in Section 14 of the Circular.

  • Do you have the cash resources to pay for the shares?

    Yes. As of June 30, 2018, Lundin Mining had US$1.51 billion of cash on its balance sheet. Lundin Mining intends to fund the Offeror and the Offer with existing resources, including cash on its balance sheet and its undrawn US$350 million revolving credit facility.

    The Offer is not subject to any financing condition.

    See "Source of Funds" in Section 7 of the Circular.

  • Why accept the offer?

    Lundin Mining believes that the Offer is compelling, and represents a superior alternative to continuing on the course set by the current Nevsun Board and management of Nevsun, for the following reasons:

    1. Compelling Premium. The Offer represents a significant premium of 82% to the closing price of C$2.61 per Nevsun Share on the TSX as of February 6, 2018, the date of the first proposal to Nevsun related to Lundin Mining’s interest. The Offer also represents a significant premium of 33% to the closing price of C$3.58 per Nevsun Share as of April 30, 2018, the date of Lundin Mining’s previously announced prior proposal to Nevsun and a 42% premium to the volume weighted average trading price of C$3.36 per Nevsun Share on the TSX over the 20 trading days ended April 30, 2018.
    1. Liquidity and Certainty of Value. The Offer provides a compelling liquidity event and an opportunity for Shareholders to realize cash proceeds and certainty of value for their entire investment. The Offer removes the risks associated with developing the Timok Project and the dilution that will be necessary to fund Timok's financing requirements.
    1. Fully Financed Cash Offer. The Offer is not subject to a financing condition. As of June 30, 2018, Lundin Mining had US$1.51 billion of cash on its balance sheet.  The Offeror intends to fund the Offer from existing resources, including Lundin Mining’s cash on hand and Lundin Mining’s undrawn US$350 million revolving credit facility.
    1. Potential for Downward Impact to Nevsun Share Price if Offer Not Accepted. The Offer represents a significant premium to the market price of the Nevsun Shares prior to Lundin Mining’s first proposal to Nevsun and prior to the public announcement of Lundin Mining’s prior proposal to acquire Nevsun. If the Offer is not successful and no competing transaction is entered into, Lundin Mining believes it is likely the trading price of Nevsun Shares will decline to significantly lower levels.
    1. Risk of Substantial Shareholder Dilution if Offer Not Accepted.The Timok Project is a large-scale project that, in Lundin Mining’s view, will require at least US$700 million of pre-operational expenditures before first production cash flow, if the project is advanced in an optimal manner. While Nevsun has not disclosed any plans yet to fund these upfront costs, it is very likely that Nevsun will require financing in the form of equity, stream/royalty and/or debt in markets which are volatile and challenging currently, thus significantly diluting its Shareholders. Lundin Mining is well capitalized and generates significant operating cash flow to assist in funding the construction of Timok, and Lundin Mining has demonstrated its ability to access low cost capital, if necessary, to raise additional capital to fund significant development projects with minimal or no equity dilution to its shareholders.
    1. Risk of Limiting Value of Bisha to its Stakeholders. Given Nevsun’s significant cash needs to advance the Timok Project, it is highly probable that the majority of available cash flow from Bisha operations will be used to fund Timok. If this occurs, Bisha operations could be starved for cash, inhibiting important investments such as highly prospective local exploration, additional sustaining capital, stripping for pit mine life extension and underground mining development. Without these investments, significant value will most likely be lost to Bisha’s stakeholders.   
    1. Project Execution and Development Risk. Lundin Mining believes it would be in the best interest of Shareholders to realize the value inherent in Timok and other Nevsun assets in the form of an immediate premium instead of remaining subject to the development, permitting and other risks to be undertaken by a less experienced Nevsun.

    See "Reasons to Accept the Offer" in Section 4 of the Circular.

  • What does the Nevsun board think of the offer?

    Under Canadian securities Laws, a directors' circular must be prepared and sent to Shareholders no later than 15 days from the date of commencement of the Offer. The directors' circular must include either: (i) a recommendation to accept or reject the Offer, and the reasons for the board of directors' recommendation, a statement that the board of directors is unable to make or is not making a recommendation, (ii) if no recommendation is made, the reasons for not making a recommendation; or (iii) a statement that the board of directors is considering the bid and advising holders not to deposit under the bid until they receive further information from the board, provided that the board of directors must communicate to security holders a recommendation to accept or reject the Offer or the decision that it is unable to make, or is not making, a recommendation, together with the reasons for the recommendation or decision, at least seven days before the scheduled expiry of the initial deposit period.

    See "Background to the Offer" in Section 3 of the Circular.

  • What are the most important conditions to the offer?

    The Offer is conditional upon the specified conditions being satisfied, or where permitted, waived at 5:00 p.m. (Toronto time) on November 9, 2018 or such earlier or later time during which Nevsun Shares may be deposited under the Offer, excluding the 10-day Mandatory Extension Period or any extension thereafter, including:

    1. Shareholders must validly tender and not withdraw before the expiration of the Offer a number of Nevsun Shares that would represent more than 50% of the total number of outstanding Nevsun Shares (excluding those securities beneficially owned, or over which control or direction is exercised, by the Offeror, Lundin Mining or any Person acting jointly or in concert with the Offeror). This condition cannot be waived by the Offeror.
    1. Shareholders must validly tender and not withdraw before the expiration of the Offer a number of Nevsun Shares that would represent at least 66 2/3% of the total number of outstanding Nevsun Shares on a fully diluted basis. This condition can be waived by the Offeror.
    1. Certain government and regulatory approvals having been obtained and/or waiting periods expired that the Offeror considers necessary or desirable in connection with the Offer.
    1. There not having occurred, prior to the Expiry Date, a Material Adverse Effect with respect to Nevsun.

    The Offer is subject to certain other conditions in addition to those listed above. A more detailed discussion of the conditions to the consummation of the Offer can be found in "Conditions to the Offer" in Section 4 of the Offer. The Offer is not subject to any financing condition.

  • How long do I have to decide whether to tender to the offer?

    You have until the Expiry Time, meaning 5:00 p.m. (Toronto time), on November 9, 2018, to tender to the Offer, unless the Offer is extended or withdrawn. In accordance with Law, if not withdrawn, the Offeror will extend the Offer for an additional period of 10 days following the Expiry Date and may extend the Offer for one or more additional periods. 

    See “Time for Acceptance” in Section 2 of the Offer in the Circular.

     

    CAN YOU EXTEND THE OFFER? 

    Yes. The Offeror may elect, in its sole discretion, to extend the Offer from time to time prior to the Expiry Date or prior to the expiry of any extension thereof. 

    In accordance with Law, if the Offeror is obligated to take up the Nevsun Shares deposited at the initial Expiry Date, it will extend the period during which Nevsun Shares may be deposited under the Offer for a 10day Mandatory Extension Period following the Expiry Date and may extend the deposit period after such 10-day Mandatory Extension Period for one or more Optional Extension Periods. If the Offeror extends the Offer, it will notify the Depositary and publicly announce such extension or acceleration and, if required by Law, mail you a copy of the notice of variation. 

    See “Extension, Variation or Change in the Offer” in Section 5 of the Offer in the Circular.

  • How do I accept the offer and tender my Nevsun shares?

    Shareholders who wish to accept the Offer must properly complete and execute the Letter of Transmittal , and deposit it, together with certificate(s) or DRS Statement(s) representing their Nevsun Shares at or prior to the Expiry Time at the office of the Depositary specified in the Letter of Transmittal. Detailed rules and instructions are contained in the Letter of Transmittal. Alternatively, Shareholders may follow the procedure for guaranteed delivery described in Section 3 of the Offer, "Manner of Acceptance -- Procedure for Guaranteed Delivery" using the Notice of Guaranteed Delivery . Shareholders whose Nevsun Shares are held in an account with a broker, investment dealer, bank, trust company or other Intermediary should contact their representative if they wish to accept the Offer.

    Shareholders will not be required to pay any fee or commission if they accept the Offer by transmitting their Nevsun Shares directly to the Depositary. However, a broker or other Intermediary through whom you own your Nevsun Shares may charge a fee to deposit Nevsun Shares on your behalf. You should consult your broker or other Intermediary to determine whether any charges will apply.

    Shareholders are invited to contact the Depositary for further information regarding how to accept the Offer.

  • If I accept the offer when will I receive the offer consideration?

    If the conditions of the Offer are satisfied or waived, and if the Offeror consummates the Offer and takes up your Nevsun Shares, the consideration for the Nevsun Shares you tendered will be delivered to the Depositary as representative for you as a registered Shareholder or your nominee as soon as practicable and in any event no later than three Business Days after the Nevsun Shares are taken up.

    In accordance with Law, if the Offeror is obligated to take up such Nevsun Shares, the Offeror will extend the period during which Nevsun Shares may be deposited under the Offer for the 10-day Mandatory Extension Period following the initial Expiry Date and may extend the deposit period for Optional Extension Periods. The Offeror will immediately take up and promptly pay for Nevsun Shares deposited under the Offer during the 10-day Mandatory Extension Period and any Optional Extension Period.

    See "Take Up and Payment for Deposited Nevsun Shares" in Section 6 of the Offer in the Circular.

  • Can I withdraw my previously tendered Nevsun shares?

    Yes. You may withdraw Nevsun Shares previously tendered by you at any time (i) before Nevsun Shares deposited under the Offer are taken up by the Offeror, (ii) if your Nevsun Shares have not been paid for by the Offeror within three Business Days after having been taken up by the Offeror, and (iii) in certain other circumstances.

    To withdraw Nevsun Shares that have been tendered, you must deliver a written notice of withdrawal with the required information to the Depositary while you still have the right to withdraw the Nevsun Shares. Alternatively, if Nevsun Shares have been deposited pursuant to the procedures for book-entry transfer, as set out under Section 3 of the Offer, "Manner of Acceptance -- Book-Entry Transfer", any notice of withdrawal must specify the name and number of the account at CDS, to be credited with the withdrawn Nevsun Shares and otherwise comply with the procedures of CDS.

    See "Withdrawal of Deposited Nevsun Shares" in Section 7 of the Offer in the Circular.

  • If I do not tender but the offer is successful what will happen to my Nevsun shares?

    If the conditions of the Offer are otherwise satisfied or waived and the Offeror takes up and pays for the Nevsun Shares validly deposited under the Offer, the Offeror intends to acquire any Nevsun Shares not deposited under the Offer: (i) by Compulsory Acquisition, if at least 90% of the outstanding Nevsun Shares are validly tendered under the Offer and not withdrawn; or (ii) by a Subsequent Acquisition Transaction on the same terms as such Nevsun Shares were acquired under the Offer, if a Compulsory Acquisition is not available or if the Offeror decides not to proceed with a Compulsory Acquisition.

    See "Purpose of the Offer" in Section 5 of the Circular.

  • Following the offer will Nevsun continue as a public company?

    If the Offer and a Compulsory Acquisition or a Subsequent Acquisition Transaction is successful, among other things:

    1. the Offeror will own all of the equity interests in Nevsun and the Offeror will be entitled to all the benefits and risks of loss associated with such ownership; and
    1. Nevsun will no longer be publicly traded and Nevsun will no longer file periodic reports (including, without limitation, financial information) with any Securities Regulatory Authorities.

    The purchase of Nevsun Shares by the Offeror pursuant to the Offer will reduce the number of Nevsun Shares that might otherwise trade publicly as well as the number of holders of Nevsun Shares and, depending on the number of Shareholders depositing and the number of Nevsun Shares purchased under the Offer, would likely adversely affect the liquidity and market value of the remaining Nevsun Shares held by the public.

    The rules and regulations of the TSX and the NYSE MKT establish certain criteria which, if not met, could lead to the delisting of the Nevsun Shares from such exchanges. Among such criteria are the number of holders of Nevsun Shares, the number of Nevsun Shares publicly held and the aggregate market value of the Nevsun Shares publicly held. If a sufficient number of Nevsun Shares are purchased under the Offer, the Nevsun Shares may fail to meet the criteria for continued listing on the TSX and the NYSE MKT and, in that event, the Nevsun Shares may be delisted from the TSX and the NYSE MKT after completion of the Offer, any Compulsory Acquisition or any Subsequent Acquisition Transaction.

    See "Effect of the Offer on the Market for and Listing of Nevsun Shares; Stock Exchange Listing and Public Disclosure" in Section 12 of the Circular.

  • Will I have the right to have my Nevsun shares appraised?

    The completion of either a Compulsory Acquisition or a Subsequent Acquisition Transaction may result in Shareholders having the right to dissent and demand payment of the fair value of their Nevsun Shares. If the statutory procedures governing dissent rights are available and are complied with, this right could lead to judicial determination of the fair value required to be paid to such dissenting Shareholders for their Nevsun Shares.

    See "Acquisition of Nevsun Shares Not Deposited Under the Offer" in Section 14 of the Circular.

  • Will I have to pay any fees or commissions?

    Registered Shareholders will not be obligated to pay any fee or commission if they accept an Offer by transmitting their Nevsun Shares directly to the Depositary. However, an Intermediary through which a Shareholder owns Nevsun Shares may charge a fee to tender any such Nevsun Shares on behalf of the Shareholder. Shareholders should consult such Intermediary to determine whether any charge will apply.

    See "Depositary" in Section 20 of the Circular.

  • What is the market value of my Nevsun shares as of a recent date?

    On July 25, 2018, the closing price of the Nevsun Shares on the TSX was C$4.76.

    The Offer represents a significant premium of 82% to the closing price of C$2.61 per Nevsun Share on the TSX as of February 6, 2018, the date of Lundin Mining's first proposal to Nevsun. The Offer also represents a significant premium of 33% to the closing price of C$3.58 per Nevsun Share as of April 30, 2018, the date of Lundin Mining's previously announced public proposal to Nevsun and a 42% premium to the volume weighted average trading price of C$3.36 per Nevsun Share on the TSX over the 20 trading days ended April 30, 2018.

    The current value of your Nevsun Shares includes the premium that Lundin Mining is offering as a result of its continued interest in Nevsun since February 2018. We urge you to obtain a recent quote for the Nevsun Shares before deciding whether to tender your Nevsun Shares.

    See "Certain Information Concerning Nevsun and the Nevsun Shares -- Price Range and Trading Volumes of the Shares" in Section 11 of the Circular.

  • How will Canadian residents and non residents of Canada be taxed for Canadian federal income tax purposes?

    A Resident Holder (as defined in Section 17 of the Circular) who disposes of Nevsun Shares to the Offeror under the Offer will realize a capital gain (or capital loss) equal to the amount by which the cash received under the Offer, net of any reasonable costs of disposition, exceeds (or is exceeded by) the aggregate adjusted cost base to the Resident Holder of those Nevsun Shares immediately before the disposition.

    Generally, a Non-Resident Holder will not be subject to tax under the Tax Act on any capital gain realized on a disposition of Nevsun Shares pursuant to the Offer, unless the Nevsun Shares are "taxable Canadian property" of the Non-Resident Holder for purposes of the Tax Act and the Non-Resident Holder is not entitled to relief under an applicable income tax convention between Canada and the country in which the Non-Resident Holder is resident.

    The foregoing is a very brief summary of certain principal Canadian federal income tax considerations and is qualified in its entirety by Section 18 of the Circular, "Certain Canadian Federal Income Tax Considerations". Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of a sale of the Nevsun Shares under the Offer, a Compulsory Acquisition, a Compelled Acquisition or a Subsequent Acquisition Transaction.

  • How will U.S. holders be taxed for U.S. federal income tax purposes?

    A U.S. Holder (as defined in Section 18 of the Circular) will recognize capital gain or loss on the disposition of Nevsun Shares pursuant to the Offer equal to the difference between the amount of cash received (determined in U.S. dollars as described below) and such U.S. Holder's adjusted tax basis in such Nevsun Shares. Such gain or loss generally will be long-term capital gain or loss if the Nevsun Shares have been held for more than one year. Preferential tax rates may apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust.

    The foregoing is a very brief summary of certain principal United States federal income tax considerations and is qualified in its entirety by Section 19 of the Circular, "Certain United States Federal Income Tax Considerations". Shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of a sale of the Nevsun Shares under the Offer, a Compulsory Acquisition, a Compelled Acquisition or a Subsequent Acquisition Transaction.

  • Whom can I call with questions?

    You can call or email Kingsdale Advisors, our Information Agent and Depositary, at 1-866-851-3214 or contactus@kingsdaleadvisors.com

Tender your Nevsun shares by November 9, 2018 @ 5:00 p.m. (Toronto Time)
Need help tendering? Questions? Call Kingsdale Advisors at 1-866-851-3214 or contactus@kingsdaleadvisors.com

Lundin Mining Corporation

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