Lundin stock up on hopes for Congo dealFrom the National Post - March 10, 2010.This is very positive news for the DRC region and hopefully will pave the way for a succesful financing and collaboration with a strong mining partner for 'our propety' in the DRC.
As Lundin Mining Corp. approaches the end of long and drawn-outcontract talks in the Democratic Republic of the Congo (DRC), investorsare breathing a huge sigh of relief.
Except for chairman Lukas Lundin, who said he was never that worried about it.
"Idon't understand this hoopla over the contract review. It's afascination," Mr. Lundin said in an interview yesterday in Toronto."I'm quite relaxed about it."
Lundin Mining is part ownerof the Tenke Fungurume mine in the DRC, one of the world's richestcopper projects. It has been in flux since 2007, when the DRCgovernment began a seemingly endless review of mining contracts.
Investorsgot more nervous after another company, First Quantum Minerals Ltd.,had its Congo mine expropriated by the government last year underquestionable circumstances. That raised political-risk concerns aboutthe DRC, even though they were already off the charts.
Butat a conference in New York this week, the chief executive ofFreeport-McMoRan Copper & Gold Inc., Lundin's joint-venture partneron Tenke and the project operator, said that a resolution with thegovernment appears to be close. Once it is done, the companies caninvest more money and expand the mine.
The result is thatLundin Mining shares on the Toronto Stock Exchange jumped 9.5%yesterday to $5.17, their highest level in 12 months. More than 17million shares changed hands, roughly triple that of any other companyon the exchange.
Mr. Lundin said he always knew that he had"a contract that you can't mess with," and that the Tenke situationcould not be compared to First Quantum's. He expects to reach anagreement that will make everyone happy.
A deal with theDRC government would cap off a very successful year for Lundin Mining,which has rebounded from penny-stock territory 12 months ago and nowsports a market value of $3-billion.
The Vancouver-basedcompany got clobbered during the credit crunch because it had too muchdebt on its balance sheet. Lundin tried to merge with HudBay MineralsInc. amid the crisis, but that deal was rejected by HudBay'sshareholders. Instead, the company focused on shedding marginal assetsand cleaning up its financials.
Today, Mr. Lundin is excited about the future with expanded production at Tenke and a zinc expansion project in Portugal.