Cannacord note this morning.....Lundin Mining* (LUN : TSX : $4.43), Net Change: 0.14, % Change: 3.26%, Volume: 5,194,867 Freeport-Mcmoran (FCX : US$9.86), Net Change: 0.12, % Change: 1.23%, Volume: 62,543,425 Reservoir Minerals* (RMC : TSX-V : $5.25), Net Change: 0.36, % Change: 7.36%, Volume: 198,530 Rio Tinto (RIO : US$31.95), Net Change: 1.63, % Change: 5.38%, Volume: 14,143,177
KEYWORDS: A FEW MONTHS NOT A FEW DAYS. Last Thursday, Lundin Mining entered into an agreement with Freeport-McMoRan to purchase an interest in Freeport's stake in the Timok copper-gold project located in Serbia for total consideration of US$262.5M. This transaction is subject to Reservoir's right of first offer (ROFO). Yesterday, Reservoir Minerals confirmed that it has received a notice of sale and offer from Freeport, wherein Freeport: i) provides notice to Reservoir of the proposed sale to Lundin Mining of its interest in the Timok Joint Venture (JV) in Serbia, under a JV/Shareholders Agreement dated December 15, 2015 among Freeport, Reservoir and Timok JVSA (BVI) Ltd.; and ii) offers to sell to Reservoir on the same terms and conditions as those agreed with Lundin pursuant to Reservoir's ROFO. Reservoir has until May 3, 2016 to decide whether it will exercise its ROFO. Reservoir reports it has been in discussions with Freeport and SEVERAL OTHER PARTIES in relation to Freeport's interests in the Timok JV over the past FEW MONTHS. Regardless the outcome, this is very positive for Reservoir as Lundin will likely be more aggressively advancing this project. However, Reservoir’s ROFO could be very strategic to other global players like Rio Tinto who have already expressed interest in the region as it could allow for the consolidation of this asset under a single owner. Note current Reservoir director Steve Scott is a Rio Tinto alumni. Between 2002-05, Scott was President Director of Rio Tinto Indonesia responsible for Rio Tinto's Indonesian business activities including management the company's interest in the Freeport Grasberg copper mine.