The payment terms have been amended to include $775m in cash with the potential to scale up to $875m depending on PIPE demand
Glencore and MAC amends terms for CSA copper mine acquisition. (Credit: Glencore)
Metals Acquisition (MAC) and Glencore have amended the terms of the previously announced agreement for the acquisition of the latter’s CSA copper mine in New South Wales, Australia.
Under the amended agreement, Glencore will now receive $1.1bn as initially agreed upon with amended payment terms along with a 1.5% net smelter return life of mine royalty upon closing of the deal.
As per the terms of the deal announced in March 2022, Glencore was to be paid $1.05bn in cash, $50m worth stake in Metals Acquisition and a 1.5% net smelter return life of mine royalty. Metals Acquisition is a blank cheque company listed on the New York Stock Exchange.
Under the amended payment terms, the mining major will be paid $775m in cash with the potential to scale up to $875m depending on the demand for private investment in public equity (PIPE).
Besides, the revised agreement consists of up to $100m to be paid in common equity and a $75m deferred payment to be made from 50% of the proceeds of any future equity raise.
Metals Acquisition CEO Mick McMullen said: “We have worked closely with Glencore to arrive at a transaction structure that delivers value to both parties, and an increased certainty of completion.
“The acquisition of CSA represents a strong strategic fit for MAC. Our management team’s operational expertise, understanding of regional operations and relationships with local stakeholders uniquely position us to identify and realise the full potential value of the asset.
“CSA also provides MAC with an ideal cornerstone asset with which to establish a high-quality, mid-tier base metals company.”
The deal, which is subject to the approval of blank cheque company’s shareholders and other customary conditions, is anticipated to be complete in Q1 2023.
In September 2022, the Australian Foreign Investment Review Board (FIRB) approved the proposed acquisition.
Located at Cobar in the Tier 1 mining jurisdiction of western New South Wales, the CSA copper mine produces nearly 50,000 tonnes of copper each year and has an estimated mine life of over 15 years.