The aggregate value of the transaction is $400 million, of which $244 million is to be paid in cash and the remaining $156 million to be paid through the issue of 175 125 304 shares.
Trevali Mining will additionally pay Glencore $30 million to repay an existing debt facility. The transaction is subject to the customary regulatory approvals and is expected to close by July 2017.
The transaction will add two African zinc assets to Trevali Mining’s portfolio of mines in Peru and Canada, creating the only global mining company focused on zinc.
The transaction will materially increase Trevali Mining’s geographic footprint and access to global capital markets. This will enable the company to take advantage of the significant opportunities to grow across the zinc market.
Glencore will increase its direct ownership in Trevali Mining from 4% to 25% and its board membership to a total of two seats.
Following the completion of the transaction, Trevali Mining will have an annual production of 230 000 t of contained zinc and an operational presence in North America, South America and Africa. Glencore will have the offtake from all four of Trevali Mining’s mines.
Commenting on the transaction, Daniel Mate, Glencore’s head of zinc marketing, said: “We are pleased to strengthen our partnership with Trevali Mining as they embark on the development of the premier zinc company in the market.
“Trevali Mining has a proven track record in the sector demonstrated by the success in opening up the Santander mine in Peru and the Caribou mine in Canada.
“We have been working together as partners since their first mine was built and we share the same vision for the future growth of the business through value-creating organic and inorganic growth opportunities. We are excited to form part of this unique global zinc vehicle, providing pure zinc exposure across a wide geographic footprint.”