Talvivaara Mining Co. announced that Audley Capital Advisors LLP, a U.K.-based hedge fund sponsor and private equity investor, has entered into a conditional asset purchase agreement to acquire the assets of Talvivaara Sotkamo Ltd. from its bankruptcy estate. At the same time, the state of Finland, through its wholly owned special purpose company Terrafame Ltd., has entered into an investment agreement with Audley. The purpose of the two agreements is to re-establish operations at the Talvivaara mine under a new mining company that will be established in connection with the transaction.
However, before the transaction can close and operations at the mine can be ramped up under the direction of the new mining company, a number of steps must be accomplished, including provision of necessary regulatory permits and arrangement of committed financing. Closing is expected to take place during the summer of 2015, until which time the business will be maintained and managed by the bankruptcy estate.
The conditional asset purchase agreement enables the start of the discussions on Talvivaara’s potential role in the future of the Sotkamo mining operations in earnest, according to the company.
In a related development, Nyrstar, which had a zinc streaming agreement with Talvivaara Sotkamo, said it reviewed the prospects of recovering its streaming agreement with Talvivaara and confirmed that it has impaired the value of the agreement in full in its first quarter 2015 accounts. The impairment, estimated to be approximately 210 million euros, does not have any operational impact on the company.
Nyrstar said it has certain legal rights concerning Talvivaara, including a parent company guarantee from Talvivaara Mining Co., and will continue to work with stakeholders toward recovering value.