Glencore will receive an initial amount of $20m on the completion date and a further $90m within 4 years or less
Zinc flakes. (Credit: Glencore.)
Glencore today announces that it has reached agreement with Santa Cruz Silver Mining, Ltd (“Santa Cruz”) for it to acquire the holding companies which own Glencore’s Bolivian zinc assets, comprising of Sinchi Wayra and Illapa (each as defined in the Appendix).
Glencore will receive an initial amount of USD20 million (subject to customary working capital adjustments) (the “Initial Consideration Amount”) on the completion date and a further USD90million (the “Deferred Consideration Amount”) to be paid within 4 years or less (depending on certain market standard mandatory and early prepayment provisions) from completion.
Completion of the sale is conditional on, without limitation, receipt of certain regulatory approvals in Canada and is expected to occur within the next three months.
At completion, Glencore will enter into a number of net smelter royalty agreements each at 1.5% in respect of the Bolivian mining business with Santa Cruz which provide for continued life of mine payments based on the performance of the relevant mines. Glencore will also retain offtake rights for life of mine in respect of the production from the relevant mines.
BMO Capital Markets is acting as financial advisor to Glencore in connection with the transaction.
Source: Company Press Release