Washington (Platts)--28Feb2011/526 pm EST/2226 GMT

The combination of Equinox Minerals and Lundin Mining will result in one of the top 10 copper miners over the next few years, Equinox President and CEO Craig Williams said in a conference call with investors and analysts Monday.

Equinox offered Lundin shareholders a total of C$4.8 billion ($4.9 billion) in cash and equity shares. Under the terms of the offer, Lundin shareholders would be receive C$8.10 for each share or 1.2903 Equinox shares, plus 1 cent for each Lundin share.

The maximum offer will not exceed C$2.4 billion cash and a maximum of 380 million Equinox shares. The offer represents a 26% premium to the closing Lundin share price of C$6.45/share last Friday, and a "superior offer" to that of Inment Mining, Williams said during the call.

When the acquisition is completed, the combined Equinox/Lundin entity will be the 16th largest copper producer in 2011. But as production ramps up over the next few years, especially at the giant Tenke Fungurume mine in the Democratic Republic of Congo, the entity will become one of the top 10 copper producers in the world, he said.

Though Tenke, whose development is being overseen by Freeport-McMoRan Copper & Gold, currently produces about 130,000 mt/year of copper, it has the expansion capacity to produce 400,000 mt/year, Williams said.

"The combination will be one of the world's largest pure-play copper companies, with approximately 500,000 mt/year of production by 2016," Williams added. "This will be delivered from a geographically diverse portfolio of world-class assets, with a growth profile driven by lower risk, expansion of existing operations and construction-base projects."

Those assets include the Neves-Corvo copper-zinc mine in Portugal, the Lumwana copper mine in Zambia, a minority share in the Tenke Fungurume mine, the Jabal Sayid copper-gold project in Saudia Arabia, and the Zinkgruvan silver-lead-zinc mine in Sweden.

LUNDIN COMMITTED TO SYMTERRA: CEO

In a statement, Lundin said its board of directors would update shareholders on developments related to the Equinox offer. "The arrangement agreement between Lundin Mining and Inmet Mining Corp., will remain in effect unless terminated by either party in accordance with its terms," it said.

Inmet Mining in mid-January said it had agreed to merge with Lundin to form a new company, Symterra Corp., in a transaction valued at $C9 billion. Symterra would have five mines in Europe, and two projects: in Cobre Panama in Panama and Tenke Fungurume in the DRC. It will have the potential to produce more than 500,000 mt/year of copper by 2017, the companies said.

In a webcast presentation from the BMO Capital Markets Metals & Mining Conference in Florida, Lundin CEO Phil Wright said a special committee has been looking at the Equinox offer since Sunday.

But for now, Lundin "is committed to Symterra. This combination with Inmet makes the greatest sense," he said. "Let me be clear, Equinox operates in the same part of world. We have... in the last three years... looked at Equinox but I don't like the combination. It has not made any sense to me in terms of portfolio construction," Wright said.

With Symterra, nearly 40% of Lundin's portfolio will be in Europe, 40% in Panama, and 20% in Africa. "As far as portfolio construction goes, that is a much more satisfactory one from my point of view."

Wright said the Equinox offer raised several issues for shareholders. "We will be a very high relative value on a single asset," Wright said, referring to copper. "Will our company endure once it becomes part of a much larger portfolio? Our markets remain volatile, we still live in very volatile times.... Do we want to recommend to shareholders that we recommend bulking up on African risk?"

Wright said that for now, the Lundin/Inmet combination presented a "vastly superior" portfolio to a Lundin/Equinox combination.

-- Nick Jonson, nick_jonson@platts.com -- Meghann McDonnell, Meghann_mcdonnell@platts.com

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