Shares for Shares and Cash

Overview

It is proposed that Filo, a TSX-listed CBCA corporation indirectly holding a large deposit in Argentina and Chile, will be acquired by a Canadian joint venture company (JVCo) to be held on a 50-50 basis indirectly by (TSX-listed) Lundin Mining and by a Canadian subsidiary (BHP) in the BHP Group (the parent’s primary listing is in Australia). Lundin Mining holds an adjacent property in Argentina (held indirectly by a Canadian subsidiary termed “Josemaria”).

A Contribution Agreement between Lundin Mining and BHP contemplates that Lundin Mining will contribute Josemaria to JVCo for its 50% interest and BHP will contribute US$690 million in cash for its 50% interest. Furthermore, however, they will jointly purchase all the Filo shares for consideration consisting of BHP and Lundin Mining cash of around $1.908 billion and $0.859 billion, respectively, and the issuance by Lundin Mining of around 92.1 million shares. The Filo shareholders can elect to receive cash or Lundin Mining shares, subject to proration to maintain the agreed mix. All the Filo shares (including the 5% stake already held by BHP and the 0.5% stake of Lundin Mining) will also be contributed to JVCo.

The plumbing to accomplish the final structure of JVCo holding all of Filo and Josemaria in general involves:

• BHP lending both the Filo acquisition cash and JV cash to Lundin Mining and receiving the "BHP notes";
• Lundin Mining then acquiring all the Filo shares (not already held by BHP and it) for the agreed cash and share consideration;
• Lundin Mining then contributing Filo (through intermediate Canadian holding companies) to JVCo in consideration for shares and the assumption of the BHP notes; and
• BHP converting the BHP notes into JVCo shares (as well as transferring its existing 5% interest in Filo to JVCo for JVCo shares);

so that, after the dust settles, JVCo is held on the agreed 50-50 basis.

Those Filo shareholders who elect to receive Lundin Mining shares are also required to receive a nominal amount of cash ($0.0001 per Filo share), so that they can only potentially receive rollover treatment if they qualify as taxable investors and request, within 60 days of the effective date of the CBCA plan of arrangement, that Lundin Mining jointly elect with them under s. 85.

Filo

Filo Corp., a CBCA corporation, is a Canadian exploration company focused on advancing its key project, Filo del Sol located in the San Juan province of Argentina and Region III, Chile. Its shares trade on the TSX and on First North in Sweden and are quoted on the OTCQX in the U.S.

BHP

BHP Investments Canada Inc., an Ontario corporation, is a wholly-owned subsidiary of BHP Group Limited. BHP Group Limited is the ultimate parent company of the BHP Group and has a primary listing on the Australian Securities Exchange. The BHP Group is a global diversified mining company that is one of the world’s leading producers of major commodities including iron ore, metallurgical coal and copper. BHP acquired an approximate 5% interest in Filo in 2022.

Lundin Mining

Lundin Mining Corporation, a CBCA corporation, is a diversified Canadian base metals mining company with operations and projects in Argentina, Brazil, Chile, Portugal, Sweden and the United States, primarily producing copper, zinc, gold and nickel. Its shares trade on the TSX and Nasdaq Stockholm. Lundin Mining has a 0.5% interest in Filo.

Josemaria

Josemaria Resources Inc., the CBCA corporation through which Lundin Mining holds the Josemaria project in Argentina, which adjoins the Filo del Sol project of Filo.

JVCo

6565522 Canada Inc., which will own Josemaria and Filo and will be directly or indirectly owned on a 50/50 basis by BHP and Lundin Mining.

Nemesia S.à.r.l.

Per a Google search, reputedly a private company controlled by trusts settled by the late Adolf H. Lundin. Nemesia S.à.r.l. is disclosed as holding 31.46% of the 134.7 million outstanding shares of Filo.

Maximum BHP Cash

$1.908 billion, subject to adjustments including increases where Filo options are exercised.

Maximum Lundin Mining Cash

$0.859 billion, subject to adjustments including increases where Filo options are exercised.

Maximum Share Consideration

92.1 million Lundin Mining shares, subject to adjustments including increases where Filo options are exercised.

Consideration for Filo shares

Filo shareholders (other than those dissenting and the BHP/Lundin purchaser parties or their affiliates) will receive, as consideration for their shares, at their election:

(i) $33.00 in cash for each Filo Share (the “Cash Consideration”), or

(ii) 2.3578 Lundin Mining Shares for each Filo Share held (the Share Consideration), plus for each whole Lundin Mining Share issued to such shareholder, $0.0001 in cash (the “Share Consideration Cash”), or

(iii) a combination of (i) and (ii) in exchange for the aggregate number of Filo Shares in respect of which such election is made.

The Cash Consideration and Share Consideration are subject, in each case, to pro-ration based on a maximum cash consideration of approximately $2,767 million (the sum of the Maximum BHP Cash and the Maximum Lundin Mining Cash) and a maximum of approximately 92.1 million Lundin Mining Shares (the Maximum Share Consideration).

Contribution Agreement

Under the Contribution Agreement, Lundin Mining agreed to contribute Josemaria to JVCo, in consideration for Lundin Mining’s 50% interest in JVCo; and BHP agreed to subscribe US$690 million in cash (subject to certain adjustments), in consideration for its 50% interest. The Contribution Agreement further provides for Lundin Mining to continue the funding of Josemaria on a 100% basis until December 31, 2024.

CBCA Plan of Arrangement

1. The BHP shareholder investor rights will be deemed terminated;
2. BHP will advance to Lundin Mining an amount in cash equal to the amount of the BHP Josemaria Note (generally, US$690 million, based on the Contribution Agreement) and an amount in cash equal to the BHP Filo Note (generally equal to the Maximum BHP Cash amount) in consideration for Lundin Mining issuing such notes (the “BHP Notes) to BHP.
3. Each Filo Share held by a dissenting shareholder will be deemed to be transferred to Filo for its fair value.
4. Out-of-money Filo options will be cancelled and in-the-money options will be deemed to be transferred to Filo in consideration for Filo shares having a value equal to the in-the-money value.
5. Each Filo Share (other than those held by those dissenting and the BHP/Lundin purchaser parties or their affiliates) will be transferred to Lundin Mining for the cash and share consideration described above.
6. All Filo Shares of Lundin Mining will be transferred to Lundin Mining Holdco (a CBCA corporation) on a s. 85(1) rollover basis in consideration for Lundin Mining Holdco shares and the assumption of the BHP Notes.
7. All Filo Shares of Lundin Mining Holdco will be transferred on a s. 85(1) rollover basis to JVCo Holdco (a CBCA corporation) in consideration for JVCo Holdco shares and the assumption of the BHP Notes and the issuance of the “JVCo Holdco Note” in a mutually-agreed amount.
8. All Filo Shares of JVCo Holdco will be transferred to JVCo on a s. 85(1) rollover basis in consideration for a specified number of JVCo shares and the assumption of the BHP Notes.
9. All Filo shares held by BHP will be transferred to JVCo in consideration for a specified number of JVCo shares.
10. JVCo shares having a value equal to the BHP Notes will be issued to BHP in satisfaction thereof.

Canadian tax considerations

The disposition of the Filo shares will not occur on a rollover basis except that Filo shareholders who are Eligible Holders (residents other than tax exempts), non-residents whose shares are not TCP and are not “treaty-protected property” and partnerships any member of which is such a person may request within 60 days of the effective date of the arrangement that Lundin Mining execute a joint election under s. 85.

Swedish tax considerations

The Swedish rules on tax-free rollovers for a share for share exchange will not apply.

Overview

Under a CBCA Plan of Arrangement, each Osisko common share will be exchanged under s. 86 for one new (Class A) common share of Osisko and a common share of a newly-formed subsidiary (New Osisko). Each Class A share will then be transferred to Acquisitionco (an Ontario Newco owned on a 50-50 basis by Agnico and Yamana or their subsidiaries) in consideration for the "Transaction Consideration," comprising $2.09 of cash, 0.07264 of an Agnico common share and 0.26471 of a Yamana common share. Non-resident shareholders will receive New Osisko shares instead as consideration for the transfer of their Osisko shares to Acquisitionco. Holders of out-of-the-money Osisko options will be paid their Black Scholes value.

Osisko

A CBCA corporation listed on the TSX and the Deutsche Borse which is currently producing gold in the Abitibit region of Quebec.

New Osisko

A Quebec company, newly-formed by Osisko, which will hold Mexican assets (through two Canadian subsidiaries each holding 50% of Campania Minera Osisko Mexico, S.A. de C.V.), a 2% NSR on Canadian exploration properties held directly or indirectly by Osisko and a 5% NSR on the "Canadian Malartic Properties" (mining rights and related assets in the Abitibi region of Quebec including reserves of 6.3M gold ounces) to be held by Canadian Malartic GP (collectively, the "New Osisko Assets" referred to in 2 below). It will be capitalized with $155M of cash and will apply for a TSX listing.

Canadian Malartic GP

Will be a wholly-owned partnership of Osisko with the exception of a small GP interest held through a wholly-owned Osisko subsidiary. According to the chart, it will be a hybrid entity, i.e., a partnership for Canadian purposes and a corporation for U.S. tax purposes.

U.S. securities laws

The issuance of Agnico, Yamana and New Osisko shares to Osisko shareholders is occurring in reliance on the s. 3(a)(10) exemption. Each of Osisko, Agnico and Yamana is a foreign private issuer, so that solicitations of U.S. shareholders of Osisko are being made only in accordance with Canadian securities laws.

Plan of Arrangement

1. Osisko will transfer its interest in the Canadian Malartic Assets to Canadian Malartic GP in consideration for the assumption of liabilities and an increased partnership interest.
2. Osisko will transfer its interest in the New Osisko Assets to New Osisko in consideration for the issuance of commons shares and the assumption of liabilities.
3. Each Osisko common share held by a dissenter will be surrendered to Osisko.
4. Osisko will issue shares to those exercising options.
5. If so approved by the shareholders, out-of-the-money options will be cash-surrendered for their Black Scholes value.
6. Each Osisko common share held by a non-resident or acquired in 4 will be transferred to Acquisitionco in consideration for the right to receive the Transaction Consideration and the right to receive one New Osisko common share.
7. Each outstanding Osisko common share will be exchanged for one Osisko Class A share (essentially a common share with two votes per share and with a requirement that the Class A share terms not be modified without 75% class approval – and with their stated capital subsequently being reduced to $1.00 in aggregate) and one New Osisko common share.
8. Acquisitionco will deliver New Osisko common shares as required in 6.
9. Each outstanding Class A share of Osisko (other than those held by Acquisitionco) will be transferred to Acquisitionco for the Transaction Consideration (with Acquisitionco having been funded by Agnico and Yamana with such consideration pursuant to a "Funding Agreement," immediately before the Plan of Arrangement)..
10. Yamana Subco (a CBCA subsidiary of Yamana holding Osisko and Yamanacommon shares) will be wound up, with such Yamana common shares cancelled.

Consolidation

If so approved by the New Osisko shareholders, the New Osisko shares will be consolidated on a 10-for-1 basis.

Canadian tax consequences

S. 86 exchange. The fair market value of the distributed New Osisko shares is not expected to exceed the paid-up capital of the (old) Osisko common shares of $4.02 per share, so that no deemed dividend should arise on the exchange of the Osisko common shares for Class A shares and New Osisko shares. S. 86 will apply to such exchange so that a holder of Osisko common shares will be considered to have disposed of its shares for the greater of their adjusted cost base and the fair market value of the New Osisko shares received on the exchange.

Class A share exchange

Will occur on a taxable basis.

Dissenters

Disposition will give rise to a deemed dividend to the extent that the amount received (excluding any interest award) exceeds the paid-up capital of the common shares subject (in the case of a corporate shareholder) to s. 55(2) applying.

U.S. tax consequences

The exchange of Osisko common shares for cash, Agnico and Yamana shares, and New Osisko shares is believed to be a taxable transaction.

Overview

It is proposed that Mitel (a CBCA corporation listed on the TSX and NASDAQ with 53.9M common shares outstanding) acquire all of the outstanding common shares of Aastra (a TSX-listed CBCA corporation with 11.8M shares outstanding) under a CBCA Plan of Arrangement for consideration estimated at $392M and comprising, for each Aastra share, U.S.$6.52 of cash and 3.6 Mitel common shares. Consequently, the outstanding Mitel common shares will increase by 44.3M to 98.3M. Following the Arrangement, Mitel may subsequently amalgamate with Aastra. All outstanding Aastra options are to be rolled into options on Mitel common shares with the exercise price based, in part, on the s. 7(1.4) test.

U.S. securities law

Aastra and Mitel are foreign private issuers, although Mitel has voluntarily determined to file 10-Ks, 10-Qs and 8-Ks. The Mitel shares to be issued will not be registered in reliance on the s. 3(a)(10) rule.

Plan of Arrangement.

1. The Aastra Shareholder Rights Plan will be terminated.
2. Each outstanding Aastra share held by dissenting shareholder will be deemed to be transferred to Mitel.
3. Each outstanding Aastra deferred share unit, and each vested Aastra stock appreciation right, will be cancelled for a cash payment.
4. Simultaneously with the exchange in 5. below, each Aastra option will be exchanged for a replacement option to acquire that number of Mitel common shares (rounded down to the nearest whole number) equal to the product of the number of Aastra common shares under the option, and the Exchange Ratio. The Exchange Ratio is the sum of: 3.6; and $6.52 divided by the 5-day VWAP of Mitel common shares on the NASDAQ immediately preceding the Arrangement Effective Date. The exercise price under the replacement option will equal the greater of: the old exercise price divided by the Exchange Ratio; and "such minimum amount that meets the requirements of paragraph 7(1.4)(c)."
5. Each Aastra share will be transferred to Mitel in exchange for U.S.$6.52 of cash and 3.6 Mitel common shares.

Canadian taxation

S. 85 elections. Non-exempt Canadian residents may make a s. 85(1) election (or s. 85(2) election for a partnership - or the Quebec equivalents) with Mitel provided they provide election forms completed with the number of transferred shares and the agreed amounts to the Depositary within 90 days following the effective date of the Arrangement; and Mitel will sign and return the election forms within 90 days. Full rollover treatment may not be available depending on the adjusted cost base of the holder's Aastra shares.

Non-rollover if no election

In the absence of a s. 85 election, the exchange will be taxable (no s. 85.1 rollover.)

Non-residents

A non-resident Aastra shareholder will not be subject to Canadian capital gains tax on the exchange if the holder's shares are not taxable Canadian property.

CBCA Plan of Arrangement under which Yamana (TSX and NYSE) acquires all of the outstanding common shares of Extorre (TSX and NYSE MKT). $3.50 of cash (estimated to represent 82% of the consideration) and 0.0467 of a Yamana common share is to be provided in exchange for each Extorre common share. (This consideration is calculated to represent a premium of 54% and values the outstanding Extorre shares at $414 million). Each holder of an Extorre incentive stock option is entitled to receive, on exercise of the option, 0.2648 of a Yamana common share. A break fee of $15 million is payable in connection with the acceptance of a superior proposal or if the Extorre ceases to support the transaction.

Canadian taxation

Canadian residents or non-residents holding their Extorre shares as taxable Canadian property may make a s. 85(1) election (0r s. 85(2) election for a partnership - or the Quebec equivalents) with Yamana provided they provide the necessary information within 90 days after the effective date of the Arrangement; and Yamana will sign and return the election forms within 30 days. The tax election package and instruction letter will be made available on the Yamana website within 30 days of the effective date of the Arrangement. Full rollover treatment may not be available depending on the adjusted cost base of the holder's Extorre shares.

In the absence of a s. 85 election, the exchange will be taxable (no s. 85.1 rollover.)

A non-resident Extorre shareholder will not be subject to Canadian capital gains tax on the exchange if the holder's shares are not taxable Canadian property. In this regard, Extorre considers that its common shares do not currently derive more than 50% of their fair market value from Canadian resource properties etc.

US taxation

The exchange generally will be a fully taxable event. Extorre is believed to be a PFIC for its current and prior years. Extorre will make available upon written request a "PFIC Annual Information Statement" as described in US Treasury Regulation Section 1.1295(g) for its 2011 and 2012 years.