Singapore 27/06/2016 - Nyrstar NV has entered into a share purchase agreement to sell its El Toqui zinc-lead-gold mine in Chile to Australia’s Laguna Gold for $25 million in cash, the Belgium-based miner said on Monday.
Of the total consideration, $12 million is payable in cash by the closing of the transaction and $13 million in milestone cash payments over a four-year period thereafter.
Nyrstar will also receive additional cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui following the closing of the transaction. The price participation commences above a zinc price of $2,100 per tonne. Hence assuming a flat zinc price of $2,300 per tonne, Nyrstar would receive additional proceeds of approximately $19.5 million from the price participation, it said.
Nyrstar and Laguna have also agreed to enter into an off-take agreement in which Laguna will sell to Nyrstar 100-percent of the zinc concentrate production from El Toqui for the initial four-year period following the closure of the transaction and 85-percent of the zinc concentrate production thereafter.
El Toqui produced 37,900 tonnes of zinc in concentrate, 2,100 tonnes of lead in concentrate, 10,000 ounces of gold in concentrate and 266,000 ounces of silver in concentrate last year. The mine was owned by Nyrstar after it acquired Breakwater Resources in August 2011.
The transaction close is still subjected to customary closing conditions and is expected to occur within two months.
The deal is part of a formal sale process Nyrstar formally launched in January for all or the majority of its mining assets.
Nyrstar is continuing to progress the divestment of all or the majority of its mining assets and will issue further updates in due course, the company added.