China’s Minmetals Resources (MMR) has said that it intends to make an all cash offer to acquire Equinox Minerals, the owner and operator of the Lumwana copper mine in Zambia, for approximately C$6.3 billion. MMR’s Chief Executive Officer, Andrew Michelmore, said: “Our offer for Equinox aligns with MMR’s strategy for growth, enhancing our global production portfolio. For Equinox shareholders, the offer is compelling in that it not only provides a substantial premium and certainty of value, but it also provides a superior alternative to the proposed acquisition by Equinox of Lundin.”MMR stated that the deal would significantly expand and extends MMR’s production profile of its operations to beyond 2030, and more than double its exposure to the attractive fundamentals of the copper market. The acquisition of Equinox would mark MMR’s first investment into the African copper belt and the Middle East. Investment into both regions “is consistent with MMR’s long term strategic growth plans” said MMR. Equinox’s Lumwana mine in Zambia is a substantial copper producing asset, with current production of 145,000 t/y and a stated mine life of 37 years. Equinox has indicated the potential ability to expand Lumwana to 260,000 t/y of copper within the next five years. In addition, Equinox’s Jabal Sayid project in Saudi Arabia, with a forecast average copper production of 60,000 t/y, is expected to commence production in 2012.

MMR’s offer is expected to be financed through a combination of existing cash reserves, long term credit facilities from Chinese banks and equity including financial investments in MMR by Chinese institutions. The proposed offer is supported by MMR’s ultimate controlling shareholder, China Minmetals Corp. Full details of the offer will be set out in the circular that is to be mailed to Equinox shareholders. The offer will be subject to certain conditions including termination of the existing Equinox bid for Lundin. For its part, Equinox said that its board of directors will be meeting to consider the unsolicited proposal, and will comment further “following careful consideration of the terms and implied value for Equinox.”