Trevali to acquire Glencore’s Rosh Pinah and Perkoa mines for $400M

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

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.