News Releases

Information posted is accurate at the time of posting, but may be superseded by subsequent press releases.

  Mar 3, 2005 - 02:00 ET
Lundin Mining Corporation and ARCON International Resources P.l.c. Announce Intention to Merge

 
NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR:  LUNDIN MINING CORPORATION

TSX SYMBOL:  LUN

AND ARCON INTERNATIONAL RESOURCES P.L.C.

LSE SYMBOL:  AIN

MARCH 3, 2005 - 02:00 ET

Lundin Mining Corporation and ARCON International 
Resources P.l.c. Announce Intention to Merge

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 3, 2005) - NOT FOR 
RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, THE UNITED STATES, 
AUSTRALIA OR JAPAN

/T/

               Lundin Mining Corporation ("Lundin Mining")
                                   and
             ARCON International Resources P.l.c. ("ARCON")

                       ANNOUNCE INTENTION TO MERGE

/T/

Highlights of the Intended Merger Transaction

- Combination will create a diversified European base metals producer 
with aggregate annual zinc production of approximately 152,000 tonnes 
and lead production of approximately 46,000 tonnes (each based on year 
ended December 31, 2004), as well as copper and silver production and a 
substantial exploration portfolio

- Enlarged group expected to have combined pro-forma liquid investments 
of approximately US$45 million

- Enlarged group's ability to commit resources for, investment in, and 
exploration around, the Galmoy mine makes it possible to seek to further 
enhance operational efficiencies and expand mine life

- Anticipated improved trading liquidity for shareholders

The Board of Lundin Mining and the Board of ARCON announce that 
agreement in principle has been reached on the terms of a merger of the 
companies which the Board of ARCON anticipate they will recommend. To 
effect the proposed merger, Lundin Mining would make an offer, subject 
to an 80% minimum acceptance condition, for the entire issued share 
capital of ARCON in exchange for US$63 million cash, currently 
equivalent to approximately EUR 0.276 per ARCON Ordinary Share, and 5.6 
million shares in Lundin Mining, currently equivalent to approximately 
EUR 0.262 per ARCON Ordinary Share (each based on the exchange rates 
referred to below). Based on the current issued share capital of both 
companies (undiluted) this would result in ARCON shareholders having an 
aggregate interest in Lundin Mining following the merger of 
approximately 14%. Lundin Mining anticipates making the offer as soon as 
practicable.

Sir Anthony O'Reilly, the principal shareholder in ARCON, has advised 
that an offer on these terms would be acceptable to him.

For the purposes of this announcement, the Board of ARCON is comprised 
of all Directors of ARCON other than Mr. Tony O'Reilly Jnr, the current 
Chairman of ARCON, who is expected to be appointed to the Board of 
Lundin Mining following completion of the merger.

The value of the proposed offer is US$122.7 million, equivalent to 
approximately EUR 93.6 million (based on a 1.3101 US$/EUR exchange rate, 
a 1.2431 C$/US$ exchange rate and the share price of Lundin Mining on 
March 2, 2005 (being the latest business day prior to this 
announcement)) and equating to EUR 0.538 per ARCON Ordinary Share. While 
this represents a discount to the last dealt price per ARCON Ordinary 
Share on the Irish Stock Exchange on March 2, 2005 (being the latest 
business day prior to this announcement), the Board of ARCON recognise 
that the current ARCON share price follows a short period of strong 
share price appreciation, with limited liquidity. Relative to the 
average closing price per ARCON Ordinary Share over the twelve, six and 
three month periods prior to this announcement, the offer price 
represents premia of approximately 32%, 35% and 30% respectively.

The Board of ARCON anticipate that they will recommend this offer, once 
formally made at this level, having regard particularly to the 
opportunity represented by the share element of the offer consideration 
which provides ARCON shareholders with the opportunity to retain an 
interest in ARCON's exploration prospects around the Galmoy mine, while 
also participating in the exploration and production diversification, 
and improved cash flows of the combined group. Such a decision is based 
on the Board's belief that the combination of Galmoy with Lundin 
Mining's interests would not only maintain the ability of ARCON 
shareholders to capitalise on the prevailing high commodity price 
environment, but would also expose ARCON shareholders to a broader asset 
portfolio and a group with a strong balance sheet for future growth. The 
improved cash flows and cash resources of the combined group will make 
it possible to further develop the Galmoy mine by investing in 
operations, production and exploration, thereby exploiting the mine's 
full potential.

Lundin Mining, which is listed on the Toronto Stock Exchange and on the 
O-list at Stockholmsborsen (the Stockholm Stock Exchange), is a Canadian 
mining and exploration company with a primary focus in Europe. As at 
December 31, 2004, the company had cash of approximately C$105 million 
(US$85 million) and investments with a market value approaching US$30 
million. The principal asset of the company is the Zinkgruvan mine in 
Sweden. The mine has been producing zinc, lead and silver on a 
continuous basis since 1857, and currently has an estimated 11-year 
reserve life with additional resources that could support mining for a 
further 8 years. Lundin Mining also holds approximately 74% of the 
shares of North Atlantic Natural Resources (NAN), a mining and 
exploration company listed on the Stockholmsborsen O-list. NAN's primary 
asset is the Storliden copper and zinc mine in Northern Sweden. A public 
offer has been made for the remaining shares of NAN by Lundin Mining, 
and is expected to close March 4, 2005. For the year ended December 31, 
2004, the Zinkgruvan mine produced approximately 61,547 tonnes of zinc 
at cash costs of approximately US$0.23/lb of zinc, while Storliden 
produced 22,348 tonnes of zinc at cash costs of approximately US$0.11/lb 
zinc (both net of by-product credits). Lundin Mining also holds a large 
copper/gold exploration project in the Norbotten Mining District in 
northern Sweden. In December 2004, Lundin Mining entered into an 
agreement with Silver Wheaton Corporation, whereby Lundin Mining agreed 
to sell all of its silver production from Zinkgruvan to Silver Wheaton 
Corporation for an upfront cash payment of US$50 million, in addition to 
6 million (post-consolidation) Silver Wheaton shares (ticker symbol: SLW 
on the TSX), and 30 million Silver Wheaton warrants (ticker symbol: 
SLW-W on the TSX), plus an ongoing payment of US$3.90 per ounce of 
silver produced.

Mr. Lukas Lundin, Chairman of Lundin Mining, said:

"This merger will create a premier zinc mining investment choice for 
investors. With three low-cost and profitable mines focused in Europe, 
the combined company will generate substantial cash flow which will be 
used to further enhance the company's growth strategy. The merger will 
combine two quality management teams who can invest immediately in the 
Galmoy mine to further enhance operational performance and to seek to 
expand the Galmoy mine life through a substantially enhanced exploration 
program. The combined entity will continue to have the backing of the 
Lundin family, with its track record of adding shareholder value, and 
the involvement of Sir Anthony O'Reilly, ARCON's principal shareholder, 
who, following completion of the merger, will have a significant 
interest in the share capital of Lundin Mining (approximately 9% on an 
undiluted basis)."

ARCON is an Irish mining and exploration company that is listed on the 
main markets of the Irish Stock Exchange and of the London Stock 
Exchange. The main asset of the company is the Galmoy mine located in 
Kilkenny County, Ireland, which, following the discovery of the "R" zone 
in 2003, has been recently extended by the grant of State Mining Licence 
No. 8 in respect of part of the "R" zone. Royalty terms agreed with the 
Irish Government's Department of Communications, Marine and Natural 
Resources on SML 8, all existing licences and any further new 2005 
licences are 1.25% of revenue for the period from March 24, 2001 to June 
30, 2006 and 1.75% thereafter until cessation of production. The Galmoy 
mine, for the year ended December 31, 2004, produced approximately 
69,000 tonnes of zinc and approximately 15,000 tonnes of lead.

Mr. Peter Kidney, Chief Executive of ARCON, said:

"The combination of ARCON and Lundin will be a tremendous opportunity 
for ARCON shareholders to participate in the creation of a substantial 
European-based base metals company with considerable exploration 
potential. The timing of this potential transaction captures the recent 
strength in both zinc and lead commodity prices and enhances investor 
exposure to them."

The making of the offer is subject to certain conditions including the 
provision of an undertaking by Sir Anthony O'Reilly to accept the offer, 
the obtaining of all requisite regulatory body approvals and the 
execution of an agreement between Lundin Mining and ARCON in regard to 
the conduct of the proposed merger.

There can be no certainty that an offer will be made, and, if an offer 
is made, there can be no certainty as to the terms and conditions of 
that possible offer.

An independent committee of the Board of ARCON will be established for 
the purposes of considering the offer, if and, when it is made. Davy 
Corporate Finance Limited have been appointed to provide independent 
financial advice with respect to the offer, if and when it is made.

Lundin Mining have appointed Macquarie Bank Limited to provide advice in 
relation to the offer.

A further announcement regarding the formal offer will be made in due 
course.

March 3, 2005

Davy Corporate Finance Limited, which is regulated in Ireland by the 
Irish Financial Services Regulatory Authority, is acting for ARCON and 
for no one else in relation to the matters described in this 
announcement and will not be responsible to anyone other than ARCON for 
providing the protections afforded to clients of Davy Corporate Finance 
Limited nor for providing advice in relation to the matter referred to 
in this announcement.

Macquarie Bank Limited, which is authorised and regulated by the 
Financial Services Authority in the United Kingdom, is acting for Lundin 
Mining and for no one else in relation to the matters described in this 
announcement and will not be responsible to anyone other than Lundin 
Mining for providing the protections afforded to clients of Macquarie 
Bank Limited nor for providing advice in relation to the matter referred 
to in this announcement.

The Directors of ARCON accept responsibility for the information 
contained in this announcement, other than that for which the Directors 
of Lundin Mining accept responsibility. To the best of the knowledge and 
belief of the Directors of ARCON, who have taken all reasonable care to 
ensure that such is the case), the information contained in the 
announcement for which they accept responsibility is in accordance with 
the facts and, does not omit anything likely to affect the import of 
such information.

The Directors of Lundin Mining accept responsibility for the information 
contained in this announcement, other than that for which the Directors 
of ARCON accept responsibility. To the best of the knowledge and belief 
of the Directors of Lundin Mining, who have taken all reasonable care to 
ensure that such is the case), the information contained in the 
announcement for which they accept responsibility is in accordance with 
the facts and, does not omit anything likely to affect the import of 
such information.

Any person who is the holder of 1% or more of the shares of ARCON may 
have disclosure obligations under Rule 8.3 of the Irish Takeover Panel 
Act, 1997, Takeover Rules, 2001 and 2002, effective from the date of 
this announcement.

-30-


FOR FURTHER INFORMATION PLEASE CONTACT:

ARCON International Resources P.l.c.
Peter Kidney or James McCarthy
+ 353 1 667 3063
www.arcon.ie

or

Lundin Mining Corporation
Sophia Shane
+ 1 604 689 7842
www.lundinmining.com

or

Davy Corporate Finance Limited
Eugenee Mulhern
+ 353 1 679 6363

or

Macquarie Bank Limited
Richard Gannon
+ 44 20 7065 2173

or

Murray Consultants
Pauline McAlester
+ 353 1 4980300