Glencore plans to sell its 80% interest in the Rosh Pinah mine in Namibia and 90% interest in the Perkoa mine in Burkina Faso to Trevali Mining Corp. for a total consideration of $400 million, of which $244 million is to be paid in cash, with the remaining $156 million paid by Trevali through the issuance of more than 175 million shares. Trevali will additionally pay Glencore $30 million to repay an existing debt facility. The transaction is subject to customary regulatory approvals and is expected to close by July.
The transaction will add two African zinc assets to Trevali’s portfolio of mines in Peru and Canada, creating the only global mining company focused on zinc. The transaction will materially increase Trevali’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.
“We are pleased to strengthen our partnership with Trevali as they embark on the development of the premier zinc company in the market,” said Daniel Mate, Glencore’s head of zinc marketing. “Trevali 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.”
Glencore will increase its direct ownership in Trevali from 4% to 25% and its board membership to a total of two seats. Following the completion of the transaction, Trevali will have an annual production of approximately 230,000 metric tons (mt) of zinc in concentrate and will have operational presence in North America, South America and Africa. Glencore will have the offtake from all four of Trevali's mines.