Battery Metals

Formation Metals today announced plans to sell its Sunshine Precious Metals Refinery to Silver Opportunity Partners, a subsidiary of Sunshine Silver Mines.

For those who thought Formation Metals (TSX:FCO,OTCQX:FMETF) had given up on trying to sell its Sunshine Precious Metals Refinery, it’s time to think again.

The Canadian mineral exploration, mine development and refining company announced today that Silver Opportunity Partners, a subsidiary of Sunshine Silver Mines, will pay US$12 million to purchase all the shares of Formation’s wholly owned subsidiary, Formation Metals, US, whose primary asset is the Sunshine Precious Metals Refinery.

Sunshine Silver Mines has paid by escrow a non-refundable $500,000 deposit, and Formation notes in its press release that it expects the sale to conclude on or before October 10, 2013.

The announcement is an interesting one given that just a few months ago, Formation’s efforts to sell the Sunshine Precious Metals Refinery — as well as its copper refinery and some land at its Big Creek Hydrometallurgical Complex — were stymied by Dundee (TSX:DC.A), which says it is Formation’s largest known shareholder.

At the time, Dundee applied to the Supreme Court of British Columbia for an injunction to stop the sale. Though it was ultimately dismissed, Formation ended up terminating the sale agreement because, ”[a]mong other things,” a “definitive acquisition agreement was not executed by June 20, 2013 despite Formation’s good faith efforts to complete such an agreement,” and the parties did not agree to an extension. Waterton Global Resource Management, the buyer, ultimately received a break fee of $1 million.

Commenting on today’s share purchase agreement, Mari-Ann Green, CEO of Formation, said, “[w]e are pleased that we were able to reach an agreement for the sale of the refining operations. The sale of this non-core asset is not expected to have a negative impact on Formation’s flagship cobalt project and will add significant non-dilutive funds to the Company’s treasury. The Company can then eliminate all debt and review opportunities to enhance shareholder value.”

It remains to be seen whether Dundee will agree.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Formation Metals is a client of the Investing News Network. This article is not paid-for content.

MARKETS

Markets
TSX19028.86+167.50
TSXV623.23+5.97
DOW31097.26+321.83
S&P 5003825.33+39.95
NASD11127.85+99.11
ASX6539.90-28.20

COMMODITIES

Commodities
Gold1808.80+0.39
Silver19.99+0.14
Copper3.59-0.01
Palladium1939.00-6.00
Platinum887.00+1.00
Oil110.43+2.00
Heating Oil3.96+0.02
Natural Gas5.86+0.13

DOWNLOAD FREE REPORTS

×