Trevali Mining Corporation (TSX/LMA: TV; OTCQX: TREVF; FSE: 4TI) has entered into definitive agreements with Glencore PLC and certain of its subsidiaries whereby Trevali will acquire a portfolio of zinc assets from Glencore, including an 80% interest in the Rosh Pinah mine in Namibia, a 90% interest in the Perkoa mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namibia, an option to acquire 100% interest in the Heath Steele property in Canada and certain related exploration properties and assets for an aggregate purchase price of approximately US $400 million.
The transaction is subject to customary regulatory approvals and is expected to close by July 2017.
Trevali expects that the acquired assets would deliver high-quality, long-life zinc production to Trevali’s existing portfolio, improving asset and geographic diversification, and would create a premier TSX-listed global zinc producing company.
The consideration will consist of approximately US $244 million in cash, subject to customary adjustments, and the issuance by Trevali of 175,125,304 Trevali common shares at a deemed price of CDN $1.20 per common share.
The cash consideration is expected to be funded through a combination of a new senior secured credit facility and the net proceeds from a private placement of subscription receipts.
Trevali has entered into an agreement with BMO Capital Markets as bookrunner for a bought deal private placement of 191,700,000 subscription receipts at of CDN $1.20 per subscription receipt for gross proceeds of approximately CDN $230 million.
BMO Capital Markets is acting as financial advisor to Trevali in connection with the transaction. Trevali retained Aird & Berlis LLP as its legal advisor. Cairn Merchant Partners L.P. is acting as an independent financial advisor to the Special Committee. Cassels Brock & Blackwell LLP acts as legal advisor to the Special Committee.
Upon closing of the transaction, Glencore will increase its direct ownership in Trevali from 4% to 25% and its board membership to a total of two seats.
photo credit: Glencore