Lundin Mining Corp. (LUN), a Canadian metals producer, said it’s been studying copper acquisitions in eastern Europe and can fund a deal of as much as $700 million.
“If we see something opportunistically we have the financial capability to move, but we will only do so if it really will add something to us,” Chief Executive Officer Paul Conibear said today at a conference in Cape Town. “Our preferences are more copper.”
Lundin has copper operations in Spain and Portugal, and a stake in a copper-cobalt deposit in the Democratic Republic of Congo. Producers of the conductive metal, used in wires and pipes, have expanded to take advantage of increasing demand in China. Copper prices have more than doubled in four years.
“We are a European-based producer so other assets in our backyard would be ideal,” Conibear said. “We have been spending quite a bit of time in eastern Europe.”
Lundin has no debt, about $275 million in cash and an unused credit facility to help fund any purchase, according to the CEO. The company also expects increasing returns from its Tenke Fungurume Congo mine this year, he said.
The producer could tap high-yield debt markets to help fund an acquisition of as much as $1 billion, Dundee Securities Ltd. said in a note yesterday. “The company enters 2013 in a strong financial condition and with the flexibility to act quickly in an M&A transaction if needed,” it said.
Lundin rose 0.8 percent to C$5.22 in Toronto trading as of 10:03 a.m. local time. The stock was little changed in Stockholm.
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