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With Equinox gone, Lundin is now the focus

Lundin's Zinkgruvan zinc, lead and silver mine in Sweden. Lundin has gone so far as to force Equinox to retract its estimate for copper reserves in its prized Lumwana mine in Zambia.

Petter Koubek/Bloomberg News/Petter Koubek/Bloomberg News

The fireworks around the quick sale of Equinox Minerals to Barrick Gold have faded, and now the focus shifts to the sale process for Lundin Mining Corp.

Lundin's bankers are narrowing down the potential buyers for Lundin or its assets. With Equinox wrapping up, analysts at firms that had Lundin on the restricted list because bankers were on copper deals are now able to say what they think. Analysts from TD Securities and CIBC, both of which had bankers advising Equinox , weighed in in the past two days.

TD Securities analyst Greg Barnes bumped his target price Wednesday to $10.50 a share on the chance of a sale.

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Mr. Barnes gives it a one-third chance that Lundin is sold, one third that it's broken up and its stake in the big Tenke copper mine in Africa is sold and a one-third chance that the company continues on independent.

Alone, the company is worth $9.50, broken up it garners $10.32 a share, and sold in its entirety it could fetch $11.70, Mr. Barnes reckons. That works out to a blended target of $10.50.

CIBC is less optimistic about pricing, even though they think there's a good chance of a deal.

Analysts Alec Kodatsky and Terry Tsui said that "given the good quality of Lundin's asset base and the scarcity of assets for sale (in an environment where many mining companies are cash rich) we believe that Lundin's strategic review process has a reasonable chance of uncovering competitive interest."

But, at least in a break-up, they don't see as big an upside. They estimated in a report Tuesday that Lundin would be worth about $9 a share in a breakup, because there would be tough to garner a control premium.

Most of that value is in two main assets. About a third comes from Lundin's Neves-Corvo copper mine in Portugal, and another third from its stake in the giant African Tenke copper project.

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