Filo (FIL) M&A announcement summary

Deal rationale and strategic fit

• Lundin Mining and BHP will form a 50/50 JV to jointly acquire Filo and combine Filo del Sol and Josemaria projects, consolidating the Vicuña District into a leading copper mining complex.

• The JV leverages complementary skills, operational expertise, regional experience, and strong balance sheets to drive phased, large-scale copper growth.

• Filo shareholders receive a premium and retain exposure to future upside via Lundin Mining equity.

• Reduces funding requirements for achieving first production and transforms the growth trajectory.

• The district is highly prospective, with potential to rival the world’s largest copper complexes.

Financial terms and conditions

• Filo shareholders offered CAD 33/share, a 32% premium to 30-day VWAP, valuing Filo at approximately CAD 4.1 billion.

• Lundin Mining pays CAD 859 million in cash and issues 92 million new shares (C$1,289 million in shares), while BHP pays CAD 1.9 billion in cash.

• Premium of 32.2% to Filo’s 30-day VWAP and 12.2% to last closing price.

• BHP pays US$690 million for a 50% interest in Josemaria.

• Both companies provide CAD 115 million interim financing to Filo via private placement.

Synergies and expected cost savings

• Integration enables shared infrastructure, supply chain, logistics, and technical expertise, minimizing environmental impact and maximizing economies of scale.

• Potential for shared process plant and major infrastructure, including tailings, roads, and powerlines.

• Optimization of ore sources and sequencing across the combined land package.

• Phased development and proximity of assets allow for efficient sequencing and rapid payback.