Toronto-listed PolyMet Mining on Monday announced that it had entered into a definitive agreement with Glencore, whereby the commodities major would acquire the minority shares in the mine development company.
Glencore will acquire 17.8% of the issued outstanding common shares of PolyMet for $2.11 a share in cash.
Lead independent director and chairperson of the independent special committee established to consider the proposal, Al Hodnick, said that the transaction was the “necessary next step” for the advancement of the NewRange copper/nickel project, in Minnesota.
PolyMet owns the NewRange project in a joint venture with Canadian miner Teck Resources.
The transaction daylights value for minority shareholders, and removes uncertainty and risk around the development of NewRange and the generally uncertain macroeconomic environment.
“The special committee strived to maximise value for our minority shareholders in light of the uncertain permitting environment and associated judicial outcomes, as well as the likely need for further substantial financing to meet the company’s obligations to NewRange.
“The transaction provides the company’s minority shareholders with an opportunity to realise an attractive cash premium for their shares with limited closing risk,” said Hodnick.
The board unanimously recommended that shareholders vote in favour of the transaction, stating that it was in the best interest of minority shareholders.