Glencore and Metals Acquisition Corp. (MAC) have agreed to amend the terms announced in March 2022, for the sale and purchase of Glencore’s CSA copper mine, located near Cobar in New South Wales, Australia. Glencore will still receive a $1.1 billion consideration as originally agreed with amended payment terms and a 1.5% net smelter return (NSR) life of mine royalty upon completion of the transaction.
The CSA mine is one of Australia’s longest operating mines (nearly 150 years) and it’s also one of the deepest (1.75 km deep). In addition to a high-grade deposit, CSA also holds 820 km2 of leases with expansion potential.
The terms of the amended agreement are: $775 million in cash (with the ability to scale up to $875 million in cash); up to $100 million of common equity; $75 million deferred to be paid out of half the proceeds of any future equity raise, with an equity back-stop provision for Glencore’s benefit; $75 million contingent payment payable when copper averages more than $4.25/lb for 18 continuous months over the Life of Mine (LoM); $75 million contingent payment payable when copper averages more than $4.50/lb for 24 continuous months over the LoM; and a 1.5% copper NSR.
MAC is a Special Purpose Acquisition Co. (SPAC) listed on the New York Stock Exchange. The transaction is expected to be completed in the first quarter of 2023, subject to the approval of MAC’s shareholders and other customary closing conditions, including regulatory approvals.
Patrice Merrin is a director of Glencore plc and is also a director of MAC. She holds less than 1% voting interest in MAC’s shares. MAC is not a related party of Glencore within the meaning of the UK Listing Rules.