Rio Tinto-Lundin mark Eagle Mine purchase – by John Pepin (The Mining Journal – July 26, 2013)

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Ceremony at Humboldt Mill finalizes transfer

HUMBOLDT – With the sounds of heavy construction equipment rumbling and beeping in the background, about 200 invited guests attended a ceremony in Humboldt Township Thursday commemorating Rio Tinto’s “handing over” the Eagle Mine and Humboldt Mill to new Toronto-based owner Lundin Mining Corp.

The ceremony was held under a tent at the mill, in a parking lot outside the local administrative offices for the Eagle Mine project. The crowd included employees and local officials and residents who have supported the Eagle Mine project.

Past Eagle Mine President Adam Burley – who is leaving Marquette County for a new Rio Tinto post in Salt Lake City – presented Lundin officials with a piece of polished ore from the mine, symbolizing the ownership transfer.

“The main message I want to get across is one of thanks and appreciation for the (Eagle) team support and the community support over these years and I also want to get across a message of pride,” Burley said. “Rio Tinto is proud of what we’ve achieved at Eagle. We do think we’ve raised the benchmark on industry standards and urge the community to share in that pride because they are the ones that have shaped the direction to a very large extent.”

Last week, Rio Tinto and Lundin officials announced the $325 million sale of the Eagle Mine to Lundin had been finalized and that Lundin was now assuming day-to-day management of the mill and the copper and nickel mine in Michigamme Township.

The transaction included sale of the underground mine, mill and the mineral, water, access and surface rights around the mine. Lundin will spend another $400 million through 2014 to bring the mine and mill into production. Total capital expenditure for the Eagle project is estimated at $770 million. Rio Tinto workers at the mine will transition to working for Lundin.

“This is very important for us,” said Lundin President and CEO Paul Conibear. “Adding a mine like this to our asset base is really formative for our future.”

Conibear said Lundin has mines in Portugal, Sweden and Spain.

“But in the last couple of years we’ve closed a couple mines that came to end of their mine life. So we’ve been looking very actively for two years now to rejuvenate our asset base to bring on a high-quality new base metals mine,” Conibear said. “We’ve actually been tracking this one since June of 2010. We started serious dialogue with Rio Tinto earlier this year.”

Conibear said the Eagle Mine acquisition was made looking to the future.

“It’s pretty tough when you announce an acquisition when metal prices are at maybe a 5-year low, obviously, some of your shareholders going, ‘Is that really the right time,'” Conibear said. “In everything we do we take a long term viewyou need to be patient, you need to be confident in what your industry is and invest with a long term perspective and that’s why we’re here.”

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