PERTH (miningweekly.com) – Copper/gold miner Sandfire Resources has signed a binding conditional sale and purchase agreement with fellow-listed Talisman Mining to acquire its 30% interest in the Springfield exploration and mining joint venture (JV), in Western Australia, for A$72.3-million.
The two companies in June this year flagged the transaction, and have been working since then to finalise the transaction.
Talisman will also be paid an ongoing 1% net smelter return royalty on any future discoveries at the Springfield JV, with Sandfire also required to pay stamp duty in relation to the transaction, as well as other transaction costs.
Through its acquisition of the Talisman A subsidiary, Sandfire will also assume the existing 2.25% gross revenue royalty held by Taurus Mining Finance Fund, payable on 30% of the copper and gold produced from the Monty deposit area, capped at 29 700 t of copper and 16 500 oz of gold.
Sandfire will fund the acquisition from its existing cash reserves.
The company told shareholders on Wednesday that the consolidation of the ownership of the Monty copper/gold mine, and the surrounding exploration tenure, strengthened Sandfire’s exploration and development pipeline in the Bryah basin.
The Monty deposit is currently being developed as a new satellite underground mine to feed the DeGrussa copper/gold mine.
The transaction was subject to Talisman shareholder approval, with the company’s directors unanimously recommending that shareholders vote in favour of the transaction.
At the close of the transaction, Talisman will have between A$50-million and A$55-million of available cash, after accounting for anticipated repayment of a loan facility and working capital facility debts.
The company intended to distribute a ‘substantial proportion’ of the funds to shareholders, which could range up to A$45-million, the company said on Wednesday.