Metals Acquisition in an 8-K filing included a technical report summary on the condition of the CSA Copper Mine in Australia, which the SPAC intends to acquire for $1.1 billion from Glencore Operations Australia Pty Limited.
“CSA is an established, high grade, producing, underground copper mine that is expected to produce more than 40 thousand tonnes (“40kt”) of copper in concentrate in 2022, with an estimated current mine life in excess of 15 years,” the independent consultants noted in their summary. “In 2021 CSA produced 41kt of payable copper and 459 thousand ounces of payable silver, at an all-in sustaining cash cost of US$1.72 per pound of copper, before silver credits.”
The SPAC’s purchase price for the mine implies a 4.5x multiple of 2022 EBITDA.
The purchase price and $50 million of required working capital and transaction costs are expected to be funded through a combination of:
$465 million of debt facilities and silver streaming agreements as follows:
$375 million underwritten senior secured debt facility from Citibank and Commonwealth Bank of Atralia, comprising a $350 million acquisition term loan and $25 million revolving credit facility for working capital;
$90 million silver streaming agreement with a subsidiary of Osisko Gold Royalties Ltd
$175 million mezzanine convertible debt facility led by Sprott Resource Lending and investors;
$41.75 million equity, including $25 million from Sprott, $15 million from OGR and $1.75 million from MAC CEO Mick McMullen and CFO Jaco Crouse;
$50 million of common equity paid to Glencore (included in the purchase price); and
$418.25 million to be sourced from a combination of $265 million cash in trust (subject to share redemptions), new equity and alternative sources.
The deal is expected to close later this year, subject to approval by the SPAC’s shareholders. Read more.
