Belgium's zinc producer Nyrstar to buy Breakwater Resources for $639 million

Belgiums Nyrstar, one of the world's biggest zinc producer, yesterday agreed to buy Canada's Breakwater Resources Ltd, for C$619 million ($639 million) as part of its strategy to increase zinc integration. 

Toronto-based Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates.
 
The company has three producing zinc mines, the Myra Falls mine in British Columbia, Canada, the El Mochito mine in Honduras, and the El Toqui mine in Chile. 

Breakwater is preparing the Langlois zinc / copper mine in Quebec, Canada for production in the first quarter of 2012. Together, the operations have an annual production capacity of approximately 140,000 tonnes of zinc in concentrate, 14,000 tonnes of lead in concentrate, 6,000 tonnes of copper in concentrate, 2.3 million troy ounces of silver and 40,000 troy ounces of gold.

The miner posted net income of C$87 million on revenues of C$298 million last year.

Nyrstar also one of the world's largest lead smelting and refining company, will pay C$7 in cash per share, or approximately C$619 million representing  a premium of around 41 per cent to the 20-day volume-weighted trading average.

Breakwater has also agreed to use cash on its balance sheet to pay out a special dividend of C$0.50 a share a day before Nyrstar takes up the shares it acquires under the offer taking the total value of the transaction to around C$663-million.