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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2005
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Commission File Number
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FNX Mining Company Inc.
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(Translation of registrant's name into English)
55 University Avenue, Suite 700, Toronto, Ontario, M5J 2H7 Canada
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F X
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Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1): _______
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether by furnishing the information contained in
this Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-_________
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NOTE
An excerpt from an announcement made in Canada on November 17, 2005 by FNX
Mining Company Inc. in connection with the attached (revised) business
acquisition report is set forth below:
Refiling of Business Acquisition Report
---------------------------------------
FNX also announced the refiling of its business acquisition report in
respect of FNX's recent acquisition from Dynatec Corporation of Dynatec's 25%
interest in their Sudbury joint venture and Dynatec's 50% indirect interest in
Aurora Platinum Corp. The refiling resulted from a review by the Ontario
Securities Commission of the pro forma consolidated financial statements
included in the business acquisition report and reflects a change made to a
note to the financial statements allocating the purchase price paid under the
acquisition between the interest in the joint venture and the interest in
Aurora. Miscellaneous revisions have also been made to certain notes to the pro
forma financial statements.
DOCUMENTS INCLUDED AS PART OF THIS REPORT
Document
--------
1 (Revised) Business Acquisition Report, dated November 16, 2005
DOCUMENT 1
Form 51-102F4
(REVISED) BUSINESS ACQUISITION REPORT
This business acquisition report amends and replaces the business acquisition
report dated November 8, 2005 of FNX Mining Company Inc. The table in note 3 to
the pro forma financial statements attached hereto as Schedule A has been
revised to reflect the preliminary allocation of the purchase price of the
acquisition described below amongst the common shares of Aurora Platinum Corp.
and the interest of Dynatec Corporation in the Joint Venture Assets (as defined
below) so acquired. Certain incidental revisions have also been made to certain
of the notes to the pro forma financial statements.
ITEM 1 IDENTITY OF COMPANY
1.1 Name and Address of Company
FNX Mining Company Inc. ("FNX" or the "Company")
55 University Avenue, Suite 700
Toronto, ON M5J 2H7
1.2 Executive Officer
The following executive officer of FNX is knowledgeable about the
significant acquisition described herein and this business acquisition
report:
Ronald P. Gagel
Vice President and Chief Financial Officer
(416) 368-0990
ITEM 2 DETAILS OF ACQUISITION
2.1 Nature of Business Acquired
On October 21, 2005, FNX acquired (the "Acquisition") from Dynatec
Corporation ("Dynatec"), the Company's joint venture partner, Dynatec's
50% indirect interest in Aurora Platinum Corp. ("Aurora") and Dynatec's
25% interest in the mining assets located in Sudbury, Ontario (the
"Joint Venture Assets"), which were the subject of the joint venture
between FNX and Dynatec established in 2002.
Prior to completion of the Acquisition, FNX held a 50% indirect
interest in Aurora and a 75% interest in the Joint Venture Assets. As a
result of the Acquisition, Aurora is now an indirect, wholly-owned
subsidiary of FNX and the Company has consolidated its interest in the
Joint Venture Assets to 100%.
FNX originally acquired all of the outstanding common shares of Aurora
in July 2005, by way of a plan of arrangement, transferred all such
common shares to Aurora Holdings Limited, a wholly-owned subsidiary of
the Company, and sold a 50% indirect interest in Aurora to Dynatec
immediately thereafter. Details of that acquisition and sale are
provided in the management information circular of Aurora dated as of
May 19, 2005 (the "Aurora Circular"), prepared in connection with the
annual and special meeting of shareholders of Aurora held on June 20,
2005, which is available at www.sedar.com under FNX's profile.
Aurora is a junior Canadian mining company, with
nickel-copper-platinum-palladium mineral properties and, through
affiliated companies, diamond and precious metal properties, located in
Ontario and Quebec. Its principal assets are its interest in the
Footwall and Foy properties located in Sudbury, Ontario, which are the
subject of a joint venture with Falconbridge Limited. As at January 1,
2005, Aurora and Falconbridge held a 60% interest and a 40% interest,
respectively, in the joint venture.
Aurora also holds equity interests in two public junior mining
companies - Lake Shore Gold Corp. and Superior Diamonds Inc. Further
information about Aurora's business is provided in the Aurora Circular.
2.2 Date of Acquisition
The effective date of the Acquisition is October 21, 2005.
2.3 Consideration
Under the terms of the Acquisition:
(a) the Company issued 20,500,000 common shares ("Common Shares")
to Dynatec;
(b) the Company and Dynatec entered into the following ongoing
agreements:
(i) a voting trust agreement with a term of three years
pursuant to which votes attached to the Common Shares
held by Dynatec will be voted in line with
recommendations of the board of directors of the
Company on various fundamental changes and
initiatives (including, among other matters, mergers,
acquisitions and the nomination of directors to the
Company's board of directors), such agreement ceasing
to be in effect should Dynatec's ownership stake in
the Company fall below 10% on a fully-diluted basis;
(ii) a standstill agreement having a three year term that
restricts Dynatec's ability to buy additional Common
Shares which would result in Dynatec acquiring more
than 19.9% of the outstanding Common Shares, subject
to certain exceptions; and
(iii) a mining services agreement pursuant to which Dynatec
will provide contractor mining services at the Joint
Venture Assets until December 31, 2007, subject to
the Company having approval, control and direction
over the services provided by Dynatec in exchange for
a fee on a cost reimbursement basis that includes a
fixed and a variable component;
(c) the Company was provided with a right of first refusal in the
event that Dynatec wishes to distribute any of the Common
Shares that it holds, which will permit FNX to designate the
purchasers of Common Shares to be sold by Dynatec for a period
of 10 business days at a price acceptable to Dynatec (net of
commissions) which, in the event of a sale by way of a
prospectus, shall not exceed 95% of the volume weighted
average of the trading prices of the Common Shares on the
Toronto Stock Exchange for the five trading days immediately
prior to receipt of written notice from Dynatec of its
election to sell such Common Shares (the
2
"VWAP") and, in the event of a sale that will not be done by
way of a prospectus, shall not exceed the VWAP, and if the
Company elects not to exercise its right of first refusal or
is unable to arrange for the sale of the Common Shares in
accordance with terms attaching thereto, Dynatec may, for a
period of 90 days thereafter, enter into an underwriting
agreement to sell such Common Shares through a public
distribution in Canada and, if a prospectus is required in
connection with such sale, the Company will take such
reasonable steps, at Dynatec's cost, as are necessary to
qualify by prospectus in Canada the distribution of such
Common Shares;
(d) Dynatec was provided with representation on the Company's
board of directors that is the greater of two nominees and
that number of nominees that is equal to Dynatec's fully
diluted ownership position, for a period of three years (such
representation being dependent upon Dynatec maintaining an
ownership stake in the Company of at least 10% on a
fully-diluted basis); and
(e) the Company agreed to purchase, at the option of Dynatec, $10
million common shares of Dynatec in the next Dynatec offering
of common shares to the public at the issue price of the
offering, provided that the offering is for a minimum of $100
million and is completed before October 21, 2006.
A detailed description of the terms of the Acquisition is contained in
the acquisition agreement dated October 5, 2005 (the "Dynatec
Agreement") between the Company and Dynatec, which is available at
www.sedar.com under FNX's profile.
2.4 Effect on Financial Position
Except as described below, there are no plans or proposals for material
changes in the Company's business affairs or the affairs of Aurora
which may have a significant effect on the Company's results of
operations and financial position.
Changes to Management and the Board
John W. Lill, Executive Vice-President and Chief Operating Officer of
Dynatec, and Bruce V. Walter, President and Chief Executive Officer of
Dynatec, were appointed to the board of directors of FNX, effective
October 21, 2005, as Dynatec's nominees pursuant to the Dynatec
Agreement.
Effective October 21, 2005, David Constable resigned as a director of
Aurora and Roland L. Horst, Vice President, Business Development of
FNX, joined Terry MacGibbon, President and Chief Executive Officer of
FNX, as the members of Aurora's board of directors. Mr. Horst was also
appointed President and Chief Executive Officer of Aurora, replacing
Mr. MacGibbon, and Ronald P. Gagel, Vice President and Chief Financial
Officer of FNX, was appointed as Aurora's Vice President and Chief
Financial Officer.
2.5 Prior Valuations
None.
3
2.6 Parties to Transaction
Not applicable.
2.7 Date of Report
November 16, 2005.
ITEM 3 FINANCIAL STATEMENTS
See the financial statements contained in Schedule A to this business
acquisition report, which form part hereof.
4
SCHEDULE A
Pro Forma Consolidated Financial Statements of
FNX MINING COMPANY INC.
Nine months ended September 30, 2005 and
year ended December 31, 2004
[KPMG GRAPHIC OMITTED]
COMPILATION REPORT ON PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
To the Board of Directors FNX Mining Company Inc.
We have read the accompanying unaudited pro forma consolidated balance sheet of
FNX Mining Company Inc. (the "Company") as at September 30, 2005 and unaudited
pro forma consolidated statements of operations for the nine months then ended
and for the year ended December 31, 2004, and have performed the following
procedures:
1. Compared the figures in the columns captioned "FNX Mining Company Inc." to
the unaudited consolidated financial statements of the Company as at
September 30, 2005 and for the nine months then ended, and the audited
consolidated financial statements of the Company for the year ended
December 31, 2004, respectively, and found them to be in agreement.
2. Compared the figures in the columns captioned "Aurora Platinum Corp." to
the unaudited financial statements of Aurora Platinum Corp. as at June 30,
2005 and for the six months then ended, and the audited financial
statements of Aurora Platinum Corp. for the year ended December 31, 2004,
respectively, and found them to be in agreement.
3. Made enquiries of certain officials of the Company who have responsibility
for financial and accounting matters about:
(a) the basis for determination of the pro forma adjustments related to
the Dynatec Transaction; and,
(b) whether the pro forma consolidated financial statements comply as to
form in all material respects with the securities acts of the
provinces and territories of Canada (the "Acts") and the related
regulations.
The officials:
(a) described to us the basis for determination of the pro forma
adjustments related to the Dynatec Transaction; and,
(b) stated that the pro forma consolidated financial statements comply as
to form in all material respects with the securities acts of the
provinces and territories of the Acts and related regulations.
4. Read the notes to the pro forma consolidated financial statements, and
found them to be consistent with the basis described to us for
determination of the pro forma adjustments.
Page 2
5. Recalculated the application of the pro forma adjustments related to the
Dynatec Transaction to the aggregate of the amounts in the columns
captioned FNX Mining Company Inc. and Aurora Platinum Corp. as at September
30, 2005 and for the nine months then ended, and for the year ended
December 31, 2004, and found the amounts in the column captioned "Total" to
be arithmetically correct.
These pro forma consolidated financial statements are based on management's
assumptions and adjustments which are inherently subjective. The foregoing
procedures are substantially less than either an audit or a review, the
objective of which is the expression of assurance with respect to management's
assumptions, the pro forma adjustments, and the application of the adjustments
to the historical financial information. Accordingly, we express no such
assurance. The foregoing procedures would not necessarily reveal matters of
significance to the pro forma consolidated financial statements, and we
therefore make no representation about the sufficiency of the procedures for the
purposes of a reader of such statements.
/s/ KPMG LLP
---------------
Chartered Accountants
Toronto, Canada
November 15, 2005
FNX MINING COMPANY INC.
Unaudited Pro Forma Consolidated Balance Sheet
(In thousands of dollars)
September 30, 2005
===================================================================================================================
FNX Mining Dynatec
Company Inc. Transaction Total
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(notes 3 and 4)
ASSETS
Current assets:
Cash and term deposits $ 57,464 $ 1,204 $ 58,668
Accounts receivable 15,551 (2,462) 13,089
Ore in process 5,811 - 5,811
Inventory 1,695 - 1,695
Prepaid expenses and other assets 361 - 361
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80,882 (1,258) 79,624
Property, plant and equipment 125,539 398,933 524,472
Investments 16,363 11,369 27,732
Reclamation deposits 1,230 308 1,538
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$ 224,014 $ 409,352 $ 633,366
===================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued liabilities $ 3,112 $ 1,528 $ 4,640
Future tax liabilities 23,922 151,929 175,851
Asset retirement obligations 1,145 - 1,145
Non-controlling interest 29,055 (29,055) -
Shareholders' equity:
Capital stock 174,781 284,950 459,731
Contributed surplus 5,742 - 5,742
Deficit (13,743) - (13,743)
--------------------------------------------------------------------------------------------------------------
166,780 284,950 451,730
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$ 224,014 $ 409,352 $ 633,366
===================================================================================================================
See accompanying notes to pro forma consolidated financial statements.
1
FNX MINING COMPANY INC.
Unaudited Pro Forma Consolidated Statement of Operations (In thousands of
dollars, except per share amounts)
Nine months ended September 30, 2005
===================================================================================================================
Aurora
FNX Mining Platinum Dynatec
Company Inc. Corp. Transaction Total
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(notes 3 and 5)
Revenue $ 58,094 $ - $ - $ 58,094
Mine operating costs:
Mining costs, excluding
depreciation and amortization 32,973 - 1,084 34,057
Depreciation and amortization 5,287 - 750 6,037
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19,834 - (1,834) 18,000
Expenses (income):
Administration 3,482 630 42 4,154
Exploration administration 2,059 121 16 2,196
Stock-based compensation 726 - - 726
Depreciation 58 - - 58
Loss on disposition of Aurora 2,600 - - 2,600
Other expenses (income) (1,061) 99 (4) (966)
Equity in losses of affiliated
companies - 333 (333) -
Gain on shares issued by
affiliated companies - (710) 710 -
--------------------------------------------------------------------------------------------------------------
7,864 473 431 8,768
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Earnings (loss) before income taxes 11,970 (473) (2,265) 9,232
Future income taxes (recovery) 4,689 (235) (501) 3,953
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Earnings (loss) before
non-controlling interest 7,281 (238) (1,764) 5,279
Non-controlling interest 4,481 - (4,481) -
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Net earnings (loss) $ 2,800 $ (238) $ 2,717 $ 5,279
===================================================================================================================
Earnings per share:
Basic and diluted (note 6) $ 0.05 $ 0.07
===================================================================================================================
See accompanying notes to pro forma consolidated financial statements.
2
FNX MINING COMPANY INC.
Unaudited Pro Forma Consolidated Statement of Operations (In thousands of
dollars, except per share amounts)
Year ended December 31, 2004
===================================================================================================================
Aurora
FNX Mining Platinum Dynatec
Company Inc. Corp. Transaction Total
-------------------------------------------------------------------------------------------------------------------
(notes 3 and 5)
Revenue $ 55,928 $ - $ - $ 55,928
Mine operating costs:
Mining costs, excluding
depreciation and amortization 31,853 - 1,230 33,083
Depreciation and amortization 5,882 - 1,000 6,882
-------------------------------------------------------------------------------------------------------------------
18,193 - (2,230) 15,963
Expenses (income):
Administration 3,584 644 - 4,228
Exploration administration 1,970 205 - 2,175
Stock-based compensation 874 85 - 959
Depreciation 101 - - 101
Gain on sale of
marketable securities (100) - - (100)
Mineral exploration
properties written off - 178 - 178
Interest and other income (1,295) (122) - (1,417)
Equity in losses of affiliated
companies - 692 (692) -
Gain on shares issued by
affiliated companies - (7,049) 7,049 -
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5,134 (5,367) 6,357 6,124
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Earnings (loss) before income taxes 13,059 5,367 (8,587) 9,839
Future income taxes (recovery) 2,434 1,571 (2,441) 1,564
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Earnings (loss) before
non-controlling interest 10,625 3,796 (6,146) 8,275
Non-controlling interest 4,136 - (4,136) -
-------------------------------------------------------------------------------------------------------------------
Net earnings (loss) $ 6,489 $ 3,796 $ (2,010) $ 8,275
===================================================================================================================
Earnings per share:
Basic and diluted (note 6) $ 0.13 $ 0.11
===================================================================================================================
See accompanying notes to pro forma consolidated financial statements.
3
FNX MINING COMPANY INC.
Notes to Pro Forma Consolidated Financial Statements
(Tabular amounts in thousands of Canadian dollars, except per share amounts)
Nine months ended September 30, 2005 (unaudited) and year ended December 31,
2004
================================================================================
1. Basis of presentation:
The unaudited pro forma consolidated balance sheet of FNX Mining Company
Inc. (the "Company" or "FNX") as at September 30, 2005 and unaudited pro
forma consolidated statements of operations for the nine months ended
September 30, 2005 and for the year ended December 31, 2004 have been
prepared by management after giving effect to the acquisition of Dynatec
Corporation's ("Dynatec") Sudbury assets, being a 25% interest in the
assets of the Sudbury Joint Venture ("SJV") and a 50% interest in Aurora
Platinum Corp. ("Aurora") (collectively the "Dynatec Transaction"). On July
1, 2005, FNX acquired 100% of Aurora and, in a related but independent
transaction, immediately disposed of a 50% interest in Aurora to Dynatec.
FNX's unaudited consolidated financial statements for the nine months ended
September 30, 2005 included the results of the Aurora acquisition on July
1, 2005 for the period of July 1, 2005 to September 30, 2005. These pro
forma consolidated financial statements have been compiled from and
include:
(a) An unaudited pro forma consolidated balance sheet of FNX as at
September 30, 2005.
(b) An unaudited pro forma consolidated statement of operations combining
the unaudited consolidated statement of operations of FNX for the nine
months ended September 30, 2005 with the unaudited statement of
earnings (loss) of Aurora for the six months ended June 30, 2005.
(c) An unaudited pro forma consolidated statement of operations combining
the audited consolidated statement of operations of FNX for the year
ended December 31, 2004 and the audited statement of income of Aurora
for the year ended December 31, 2004.
The unaudited pro forma consolidated balance sheet as at September 30, 2005
has been prepared as if the Dynatec Transaction described in notes 3 and 4
had occurred on September 30, 2005. The unaudited pro forma consolidated
statements of operations for the nine months ended September 30, 2005 and
for the year ended December 31, 2004 have been prepared as if the Dynatec
Transaction described in notes 3 and 5 had occurred on January 1, 2004.
It is management's opinion that these pro forma consolidated financial
statements present in all material respects, the Dynatec Transaction
described in note 3 in accordance with Canadian generally accepted
accounting principles.
The pro forma consolidated financial statements should be read in
conjunction with the historical financial statements and notes thereto of
FNX and Aurora.
4
FNX MINING COMPANY INC.
Notes to Pro Forma Consolidated Financial Statements (continued)
(Tabular amounts in thousands of Canadian dollars, except per share amounts)
Nine months ended September 30, 2005 (unaudited) and year ended December 31,
2004
================================================================================
These pro forma consolidated financial statements are not intended to
reflect the financial position and results of operations which would have
actually resulted had the transaction and other adjustments been effected
on the dates indicated. Further, the pro forma results of operations are
not necessarily indicative of the results of operations that may be
obtained by FNX in the future.
2. Significant accounting policies:
The pro forma consolidated financial statements have been compiled using
the significant accounting policies as set out in the audited financial
statements of FNX for the year ended December 31, 2004. Management believes
the significant accounting policies of Aurora conform in all material
respects to those of FNX.
3. The Dynatec Transaction:
October 5, 2005, FNX announced that it had entered into an agreement (the
"Agreement") with Dynatec whereby FNX would increase its ownership in its
Sudbury assets to 100%. The transaction closed on October 21, 2005. The
material terms of the transaction are as follows:
(i) FNX acquired Dynatec's 25% interest in the SJV and 50% interest
in Aurora;
(ii) FNX issued 20,500,000 common shares of FNX (each, a "Common
Share") to Dynatec;
(iii) FNX and Dynatec entered into a Voting Trust Agreement with a
term of three years pursuant to which votes attached to the
Common Shares held by Dynatec will be voted in line with FNX
board recommendations on various fundamental changes and
initiatives (including, among other matters, mergers,
acquisitions and the nomination of directors to the FNX board),
such agreement ceasing to be in effect should Dynatec's
ownership stake in FNX decline below 10% on a fully-diluted
basis;
(iv) Dynatec has entered into a Standstill Agreement with FNX having
a three year term that restricts Dynatec's ability to buy
additional Common Shares that would result in Dynatec acquiring
more than 19.9% of the outstanding Common Shares, subject to
certain exceptions;
(v) FNX has a right of first refusal in the event that Dynatec
wishes to distribute any of the Common Shares that it holds, to
designate the purchasers of Common Shares to be sold by Dynatec
for a period of 10 business days at a price acceptable to
Dynatec, but subject to an agreed upon formula. In the event
that FNX elects not to exercise its right of first refusal or
is unable to arrange for the sale of the Common Shares, Dynatec
may, for a period of 90 days thereafter, enter into an
underwriting agreement to sell such Common Shares through a
broad public distribution in Canada and, if a prospectus is
require in connection with such sale, FNX will take such
reasonable steps, at Dynatec's cost, as are necessary to
qualify by prospectus in Canada the distribution of such Common
Shares;
5
FNX MINING COMPANY INC.
Notes to Pro Forma Consolidated Financial Statements (continued)
(Tabular amounts in thousands of Canadian dollars, except per share amounts)
Nine months ended September 30, 2005 (unaudited) and year ended December 31,
2004
================================================================================
(vi) Dynatec will have FNX board representation that is the greater
of two nominees and that number of nominees that is equal to
Dynatec's fully diluted ownership position for a period of
three years (such representation being dependent upon Dynatec
maintaining an ownership stake in FNX of at least 10% on a
fully-diluted basis);
(vii) FNX will purchase, at the option of Dynatec, $10 million of
Dynatec's common shares in the next Dynatec offering of common
shares to the public at the issue price of the offering,
provided that the offering is for a minimum of $100 million and
is completed before October 21, 2006; and,
(viii) Dynatec will provide contractor mining services at the Sudbury
properties from October 21, 2005 until December 31, 2007,
subject to FNX having control and direction over the services
provided by Dynatec. Under the mining services agreement.
Dynatec will be paid a fee of 7% on a cost reimbursement basis
plus a fixed amount of $7.5 million to be paid on each of
December 31, 2006 and 2007.
For the purposes of the pro forma consolidated financial statements, the
following assumptions have been used:
(a) The value of the Common Shares issued by FNX to Dynatec has been based
on an FNX share price of $13.90 per share, being the fair value at the
announcement date.
(b) The acquisition of a 100% interest in FNX's Sudbury assets occurred on
January 1, 2004 for purposes of the unaudited pro forma consolidated
statement of operations for the nine months ended September 30, 2005
and the year ended December 31, 2005 and on September 30, 2005 for
purposes of the unaudited pro forma consolidated balance sheet.
The preliminary allocation of the purchase price summarized in the table
below is subject to change:
============================================================================================================
Purchase price:
20,500,000 FNX common shares issued $ 284,950
Estimated Dynatec Transaction costs 1,500
------------------------------------------------------------------------------------------------------------
$ 286,450
============================================================================================================
Aurora SJV Total
Net assets acquired (liabilities assumed):
Cash $ 1,512 $ (308) $ 1,204
Accounts receivable 297 (2,759) (2,462)
Investments 11,369 - 11,369
Property, plant and equipment 26,265 372,668 398,933
Reclamation deposits - 308 308
Accounts payable and accrued liabilities (28) - (28)
Future tax liabilities (9,504) (142,425) (151,929)
Non-controlling interests - 29,055 29,055
------------------------------------------------------------------------------------------------------------
$ 29,911 $ 256,539 $ 286,450
============================================================================================================
6
FNX MINING COMPANY INC.
Notes to Pro Forma Consolidated Financial Statements (continued)
(Tabular amounts in thousands of Canadian dollars, except per share amounts)
Nine months ended September 30, 2005 (unaudited) and year ended December 31,
2004
================================================================================
4. Unaudited pro forma consolidated balance sheet adjustments:
This unaudited pro forma consolidated balance sheet includes the following
adjustments:
(a) the accrual of Dynatec Transaction costs; and,
(b) the purchase price paid by FNX ascribed to the assets and liabilities
acquired as described in note 3 above.
5. Unaudited pro forma consolidated statements of operations adjustments:
These unaudited pro forma consolidated statements of operations include the
following adjustments:
(a) the elimination of dilution gains based on the assumption that FNX
would have fair valued the investments on acquisition;
(b) the additional 50% consolidation of Aurora as a result of the Dynatec
Transaction for the three months ended September 30, 2005;
(c) the payment of the $7.5 million fixed component of the mining services
agreement allocated between operations and development costs;
(d) the depreciation and amortization on the fair value of McCreedy West
mine as a result of the Dynatec Transaction; and,
(e) the tax effect on the above items.
7
FNX MINING COMPANY INC.
Notes to Pro Forma Consolidated Financial Statements (continued)
(Tabular amounts in thousands of Canadian dollars, except per share amounts)
Nine months ended September 30, 2005 (unaudited) and year ended December 31,
2004
================================================================================
6. Pro forma earnings per share:
(a) Basic earnings per share:
The average number of shares used in the computation of pro forma
basic earnings per share has been determined as follows:
======================================================================================================
September 30 December 31
2005 2004
------------------------------------------------------------------------------------------------------
Weighted average number of FNX
shares outstanding 54,885,838 53,430,597
Number of FNX shares issued to
Dynatec shareholders 20,500,000 20,500,000
------------------------------------------------------------------------------------------------------
Pro forma weighted average number of
shares outstanding 75,385,838 73,930,597
======================================================================================================
(b) Diluted earnings per share:
The average number of shares used in the computation of pro forma
diluted earnings per share has been determined as follows:
======================================================================================================
September 30 December 31
2005 2004
------------------------------------------------------------------------------------------------------
Pro forma weighted average number of
shares outstanding 75,385,838 73,930,597
Dilutive effect of options 1,041,121 1,497,302
------------------------------------------------------------------------------------------------------
Diluted average number of shares outstanding 76,426,959 75,427,899
======================================================================================================
The dilutive effect of FNX options has been calculated using a price
per FNX common share of $13.90.
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FNX MINING COMPANY INC.
-----------------------------------------
(Registrant)
Date: November 22, 2005 By: /s/ RONALD P. GAGEL
-------------------- ------------------------------------
Name: Ronald P. Gagel
Title: Vice-President and Chief
Financial Officer