The deal was first announced by Trevali in March, and closed on Thursday (August 31). Among other assets, Trevali has gained an 80-percent stake in the Namibia-based Rosh Pinah mine and a 90-interest in the Perkoa mine in Burkina Faso.
The company also now has an effective 39-percent interest in the Gergarub project in Namibia and an option to acquire a 100-percent interest in the Canada-based Heathe Steele project.
Trevali’s other properties include its Santander and Caribou mines, as well as the Halfmile and Stratmat base metals deposits. Santander is located in Peru, while Caribou, Halfmile and Stratmat are in Canada. With the addition of Rosh Pinah and Perkoa, its production will more than double to about 410 million payable pounds of zinc output annually.
The aggregate purchase price for the Glencore assets was US$417.86 million, including a cash payment of US$245.21 million and 193,432,310 common shares in the capital of the company. Now that the deal has closed, Glencore has a 21.3 percent stake in Trevali, up from 4.3 percent previously.
In a Thursday press release, Dr. Mark Cruise, president and CEO of Trevali, called the Glencore agreement a “truly transformational event.” He added, “[t]hese assets complement our successful Santander and Caribou mines and provide significant upside to shareholders in this strengthening macro-zinc environment through scale of production as well as an attractive package of exploration ground.”
Trevali’s acquisition has been well received by market watchers as well. In a note released Thursday, Scotiabank described the company as “the best pure-play zinc producer out there,” and said the acquisition of Rosh Pinah and Perkoa has “already proved fruitful for [Trevali].”
Eight Capital said in its own note that the deal “closed as expected and marks a positive step forward for the company.” The firm is maintaining its “buy” recommendation for Trevali, and has a 12-month target price of C$1.85 for the company. TD Securities also has a “buy” rating on Trevali, though its 12-month price target is higher at C$2.
At close of day Thursday, Trevali’s share price stood at $1.44, up about 27 percent year-to-date. Zinc prices recently reached their highest level in over a decade, and zinc producers and juniors have been enjoying increased attention from investors.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Trevali Mining is a client of the Investing News Network. This article is not paid-for content.