Nyrstar NV (EBR:NYRT) has announced that it has entered into a Share Purchase Agreement to sell its El Toqui mine in Chile to Laguna Gold for total cash consideration of $25 million, plus future proceeds through a price participation agreement with Lagnua. As quoted in the press release: The Consideration payable to Nyrstar consists of …

The Consideration payable to Nyrstar consists of USD 12 million payable in cash by the closing of the Transaction and USD 13 million in milestone cash payments over a four year period following the closing of the Transaction. In addition, Nyrstar will have the opportunity to retain upside exposure to an improving commodity price environment by receiving additional cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui following the closing of the Transaction. The price participation commences above a zinc price of $2,100 per tonne and is applicable at set zinc prices. As an example, assuming a flat zinc price of $2,300 per tonne post closing of the Transaction, Nyrstar would receive additional proceeds of approximately USD 19.5 million from the price participation on an undiscounted basis.
As part of the Transaction, Nyrstar and Laguna have also agreed to enter into an off-take agreement pursuant to which Laguna will sell to Nyrstar 100% of the zinc concentrate production from El Toqui for the initial four year period following the closure of the Transaction and 85% of the zinc concentrate production thereafter. Closing of the Transaction is subject to customary closing conditions and is expected to occur within two months.

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