Nyrstar announces Sale of El Mochito
22 September 2016 at 20:00 CET
Nyrstar NV ("Nyrstar" or the "Company") today announces that it has entered into a Share Purchase Agreement (the “Agreement”) to sell its El Mochito mine in Honduras (“El Mochito”) to Morumbi Resources Inc. (“Morumbi”), a Canadian based mining company, for cash consideration of USD 0.5 million (the “Cash Consideration”).
As part of the Transaction, Nyrstar and Morumbi have also agreed to enter into an off-take agreement pursuant to which Morumbi will sell to Nyrstar 100% of the zinc and lead concentrate production from El Mochito for a ten year period, with treatment charges to be set at benchmark terms following the closure of the Transaction.
Bill Scotting, CEO of Nyrstar, stated: “This sale is an important step in Nyrstar’s strategy to sell its mining assets as part of the transformation of the Nyrstar business. We are making progress on the divestment of the non-core mining assets, with agreements now in place for the sale of two of our mines, and we expect to be in a position to make similar announcements regarding other mining assets in the near future.”
Closing of the Transaction is subject to customary closing conditions, including Morumbi’s successful completion of an equity financing (the “Financing”). The proceeds from the Financing will be held in escrow pending satisfaction of certain escrow release conditions, including (i) all conditions precedent to the completion of the transactions contemplated by the Agreement, including receipt of all regulatory approvals, shall have been completed or waived; (ii) the receipt of all necessary regulatory approvals with respect to the Financing including conditional approval from the TSX Venture Exchange with respect to the listing of the Common Shares underlying the subscription receipts; (iii) the Company having delivered a certificate to Dundee that the conditions set forth in (i) and (ii) have been satisfied; and (iv) the Company and Dundee having delivered the completion notice and direction pursuant to the Subscription Receipt Agreement to the subscription receipt agent. Morumbi plans to complete the Financing concurrently with the closing of the Transaction to fund, among other things, the Cash Consideration payable to Nyrstar pursuant to the Transaction. The transaction is estimated to close within 2 to 3 months.
BMO Capital Markets Limited and Lazard & Co. are acting as financial advisors to Nyrstar in connection with the Transaction.
