Arcon announces profits and agreement on merger

Mineral exploration company Arcon has announced profits of €1.4m for 2004, compared to a loss of €9.7m in 2003.

Just after the profits announcement this morning, the company went on to say agreement had been reached with the board of Canadian company Lundin Mining on the terms of a recommended merger of the two companies.

Under the terms of the merger offer, each holder of 100 Arcon Shares will be entitled to receive US$36.2198 in cash and 3.2196 Lundin Mining Swedish depository receipts (SDRs) and so on in proportion for any greater or lesser number of Arcon shares held, such that 32 Arcon shares will entitle the holder to approximately US$11.59 in cash and 1 Lundin Mining SDR. Fractions of Lundin Mining SDRs will not be distributed but will be aggregated and sold in the market for the benefit of the relevant Arcon shareholders.

In today's announcements of profits, Arcon added that it had recorded a 67% increase in turnover in 2004 to €37.3m.

The company said strong demand for zinc began to impact zinc prices in 2005. A shortage of zinc concentrate on world markets is expected to result in a further reduction in zinc treatment charges in 2005 and 2006.