Canadian group, Lundin Mining Corporation, is buying Arcon International Resources, which is 72 per cent owned by Sir Anthony O'Reilly, for $123 million (€94 million).

Some $63 million will be paid in cash with the remainder in shares in Lundin Mining, listed on the Toronto Stock Exchange. The total number of Lundin shares is 5.6 million, representing a 14 per cent stake in the company.

The offer is equivalent to 53.8 cent per Arcon ordinary share and is below Arcon's closing price on Tuesday of 57 cent. However, it is at a 30 per cent premium to Arcon's average closing price over the last three months.

Arcon's chief executive, Peter Kidney, said the merger presented a tremendous opportunity for its shareholders. Sir Anthony, "has advised that an offer on these terms would be acceptable to him", according to the company.

He will have an estimated 9 per cent interest in the share capital of Lundin Mining, worth €40 million, and will also receive €40 million in cash.

Sir Anthony's son, Tony O'Reilly Jnr, who is Arcon's chairman is expected to join Lundin Mining's board. Arcon is the descendant of Atlantic Resources, the unsuccessful oil exploration company founded by Sir Anthony in the 1980s.

In 1992 he merged it with Conroy Petroleum, the owner of the Galmoy lead and zinc deposit on which it developed the mine that is now its major asset.

Since then Sir Anthony and companies associated with him have invested substantial funds towards supporting its activities and re-financing it. Some estimates suggest this figure could be as high as €90 million.

A spokesman for Sir Anthony suggested his actual investment, which was made in US dollars, was closer to €60 million when the exchange rate is factored in.

Lundin's principal asset is the Zinkgruvan mine in Sweden. The mine has been producing zinc, lead and silver on a continuous basis since 1857.