Reuters reported that Belgiums Nyrstar agreed to buy Canada's Breakwater Resources Limited for CAD 619 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 and copper mine in Quebec, Canada for production in the Q1 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 CAD 87 million on revenues of CAD 298 million last year. Nyrstar also one of the world's largest lead smelting and refining company, will pay CAD 7 in cash per share or approximately CAD 619 million representing a premium of around 41% 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 CAD 0.50 per share a day before Nyrstar takes up the shares it acquires under the offer taking the total value of the transaction to around CAD 663 million.

Breakwater has also agreed not to solicit other offers under certain conditions but Nystar has a right to match any superior proposal. Nyrstar will pay a termination fee of CAD 20 million in certain circumstances including if Breakwater accepts a superior proposal.

Breakwater's board has unanimously recommended the Nyrstar offer and Dundee Corporation which owns 22% of Breakwater has entered into a lockup agreement to sell its shares to Nyrstar.

Nyrstar had launched EUR 490 million rights issue in February in order to acquire more mines and further diversify its multi metals profile. The acquisition will significantly increase Nyrstar's level of zinc integration from 31% to 43% a significant advancement on Nyrstar's stated medium term integration target of 50%.

Nyrstar's annual mining production is expected to be approximately 475,000 tonnes of zinc, 28,000 tonnes of lead, 15,000 tonnes of copper, 7.8 million troy ounces of silver and 95,000 troy ounces of gold. At this level, Nyrstar would be one of the 5 largest zinc miners based on 2010 global zinc mine production.

Mr Roland Junck CEO of Nyrstar said that "This acquisition is in line with our strategy to selectively pursue opportunities in mining, and presents an exciting opportunity to significantly increase our zinc integration.”