TORONTO, ONTARIO -- (Marketwire) -- 01/22/13 -- Inmet Mining Corporation ("Inmet") (TSX: IMN) announced today that its Board of Directors, on the recommendation of its Special Committee of independent directors and with input from its and the Special Committee's financial and legal advisors, recommends that Inmet shareholders reject the unsolicited offer by First Quantum Minerals Ltd. (the "First Quantum Offer" or the "Offer") to acquire Inmet for consideration of (a) cash, (b) First Quantum shares, or (c) a combination of cash and shares, and not tender their shares to the First Quantum Offer.
The basis for the Inmet Board's recommendation with respect to the First Quantum Offer is contained in a Directors' Circular filed today with Canadian securities regulators. A copy of the Directors' Circular is available online at www.inmetmining.com and www.sedar.com. The Directors' Circular will also be mailed to Inmet shareholders.
David R. Beatty, O.B.E., Chairman of the Inmet Board, said, "The Inmet Board has concluded that the First Quantum Offer fails to adequately compensate shareholders for Inmet's low risk asset base and its strong prospects for growth and value creation at Cobre Panama, which has the potential to become one of the world's largest copper mines. Cobre Panama is expected to drive a 176% increase in Inmet's copper production by 2018 and, as it moves closer to production, we believe our shareholders will benefit substantially from the commensurate increase in the company's valuation. The First Quantum Offer is timed to deprive them of that opportunity without fair compensation, all while adding considerable execution, financing and geopolitical risk to the proposed combined company. We believe our shareholders can do significantly better and we urge them to reject First Quantum's offer."
"The Board is engaged in a thorough and rigorous process aimed at investigating all potential strategic alternatives to maximize shareholder value," added Mr. Beatty.
Reasons to Reject the First Quantum Offer
The Inmet Board concluded that the First Quantum Offer is financially inadequate, significantly undervalues Inmet, is subject to significant risks and is not in the best interests of Inmet and its shareholders. The Board cited a number of reasons for its recommendation to reject the First Quantum Offer, including, but not limited to, the following:
-- The First Quantum Offer significantly undervalues Inmet's low risk asset base and its world-class Cobre Panama project. Inmet has an attractive portfolio of mature low-cost operations in politically stable jurisdictions that underpin the significant growth and upside potential of its world-class Cobre Panama deposit.-- The timing of the First Quantum Offer deprives Inmet shareholders of the full value of bringing Cobre Panama into production. The First Quantum Offer is trying to deprive shareholders of the full value of Inmet's world-class Cobre Panama project, which has not yet been fully reflected in Inmet's share price. Cobre Panama is expected to drive a 176% increase in Inmet's copper production by 2018.-- The First Quantum Offer is below precedent transactions and does not reflect an adequate premium for control of Inmet. The Board of Directors believes, based on a review of comparable transactions and advice from its financial advisors, that the First Quantum Offer represents a significant discount to the price / NAV ratio and total acquisition cost paid in other recent mining transactions.-- First Quantum has no experience developing projects the size of Cobre Panama and no relevant experience in Latin America.-- First Quantum has a track record of repeatedly underestimating development costs and overestimating production expectations.-- The First Quantum Offer does not compensate Inmet shareholders for the inherent risks in First Quantum shares. Inmet shareholders will be exposed to increased geopolitical risk and development risk from First Quantum's development projects as well as increased cash costs and reduced copper exposure.-- Inmet continues to evaluate alternatives to maximize shareholder value. Tendering to the First Quantum Offer before the Inmet Board and its advisors have had the opportunity to fully explore all available alternatives to maximize shareholder value may preclude the emergence of a financially superior alternative transaction.