LONDON: Pembridge Resources plc, a mining-focused special purpose acquisition company, has signed a definitive share purchase agreement (SPA) with Capstone Mining Corp. and closed the acquisition of 100% of Minto Explorations Ltd. The SPA replaces the agreement signed between the parties and first announced on 15 February 2018. [the_ad id=”32940″]The consideration for the acquisition, which is unconditional, comprises up to US$20 million in total payments due to Capstone payable out of future cash flows and realisations from Minto and based on certain hurdles linked to production levels at Minto as well as future copper prices.
In addition, financing of US$10 million to fund the recommencement of operations has been secured from Copper Holdings, LLC, a New York based private equity group and Cedro Holdings I, LLC, an entity managed by Lion Point Capital, L.P., a New York based asset manager, pursuant to a shareholder and financing agreement between the Company, Copper Holdings and Lion Point.
The Company expects to recommence commercial production at Minto during the fourth quarter 2019.
David Linsley, Chief Executive Officer commented: “We have said all along that the acquisition of Minto represents a transformational opportunity for Pembridge and its shareholders which is why we continued to pursue the Transaction despite last year’s downturn in commodity markets and the challenging environment for raising capital. While market conditions impacted closing of the Transaction, we were able to use this time to achieve a deal and financing package which we expect to be value accretive for Pembridge shareholders.
“We welcome our new partners, Copper Holdings and Lion Point, and look forward to commencing the restart process at Minto and executing our initiatives to seek to extend mine life and significantly improve on previous operating margins at Minto.”
Frank McAllister, Chairman said: “I congratulate the Pembridge management team who have persevered throughout the past 12 months to complete the Transaction. It was vital to ensure that the Company achieved favourable deal terms rather than pursuing a deal at any cost regardless of the time it may take to complete.
“The opportunity offered by Minto aligns with our goal of acquiring a producing or near production mining operation, to which we can add value. While we very much see Minto as a cornerstone asset, the Pembridge management team and board of directors continue to evaluate further acquisition and investment opportunities, consistent with our strategy to build Pembridge into a mid-tier mining company.”