Altius Minerals Signs Copper Purchase Agreement With Yamana Gold

Altius Minerals (TSX:ALS) has entered a metal purchase agreement with a subsidiary of Yamana Gold (TSX:YRI). Altius will acquire future copper payments referenced to Yamana’s Chapada copper-gold mine located in central Brazil.
As quoted in the press release:

Transaction Highlights

• Immediately increases annualized EBITDA by C$8-$9 million
• Adds another long-life mine and brings number of producing portfolio assets to 14
• Enhances commodity diversity balance with base metals becoming the largest revenue generating component of Altius’s portfolio

Purchase Price

• US$60 million plus 400,000 common share purchase warrants exercisable at C$14 per share
• Ongoing payments for each pound of copper received equal to 30% of the spot copper price.

Payable Copper Rate and Structure

• Base Rate: 3.7% referenced to copper production from the Chapada mine reducing to 1.5% for remaining life of mine after 75 million pounds delivered
• Expansion Incentive Rate: Rate decreases to 2.65% in the event of a Chapada mine expansion
• Acquired through a 100% Altius owned Canadian subsidiary
• Payment guarantees at parent company and mine holding levels

Financing

• US$8 million paid on signing with remainder (US$52 million) payable in early May at final scheduled closing
• Credit facilities in the aggregate amount of C$150 million comprised of a C$70 million, 4-year, amortizing term debt facility and a C$80 million, 3-year, revolving credit facility are currently being finalized; Scotiabank and ING Capital LLC have committed C$50 million each to the credit facilities, with commitment from another lender expected shortly
• Current term loan will be replaced by this new facility, resulting in a reduced interest rate

Click here for the full press release.