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Formation Metals Inc. (TSX:FCO) entered into a binding Letter Agreement to sell its Sunshine Precious Metals refinery, copper refinery and certain lands at the Big Creek Hydrometallurgical Complex in Idaho, for US$9 million in cash. The Company plans to sell to certain entities that are associated or affiliated with Waterton Global Resource Management, Inc.
As quoted in the press release:
The Letter Agreement provides for payment to Formation of a one third share of the profits in the event Waterton sells its interest in the Complex within 18 months and provides for the Company to re-pay its existing US$5.0 million senior secured convertible promissory note.
The sale is subject to, among other things, confirmatory due diligence, the execution of a definitive acquisition agreement by June 20, 2013, unless mutually extended, and any required regulatory approvals. In addition, the Letter Agreement includes an exclusivity provision in respect of the Company until its termination and calls for the Company to pay Waterton a break fee of US$1.0 million and a portion of its costs in certain circumstances. The transaction is expected to close June 20th, 2013.
Formation Metals Inc. Chairman and CEO, Mari-Ann Green, said:
This was a strategic decision that will provide significant additional cash to the Company’s treasury. Apart from helping to ensure the financial health of the Company by relieving it of all debt, the sale of this non-core asset also provides us with additional funds to seek opportunities to enhance shareholder value.
Click here to read the Formation Metals Inc. (TSX:FCO) press release
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