Metals Acquisition in an 8-K said it entered into a mezzanine debt facility loan note subscription agreement with Sprott Private Resource Lending II to finance, in part, the SPAC’s acquisition of the shares of Cobar Management Pty. Limited, a subsidiary of Glencore Operations Australia, which operates the CSA copper mine in Australia. The Mezz Facility provides $135 million in funding available to the SPAC with a maturity of five years from the closing of the business combination.
The SPAC’s total consideration for the CSA mine is up to $1.1 billion, consisting of $775 million up front cash consideration (with the potential to be scaled up to $875 million depending on equity demand) to Glencore, plus the SPAC’s issue of up to 10 million shares to Glencore (with Glencore having the option to scale down to none if the SPAC raises sufficient equity), as well as a $75 million deferred cash payment to Glencore tied to a future equity raise by Metals Acquisition following deal completion.
The SPAC would also make two separate $75 million contingent payments to Glencore tied to future copper price thresholds, plus a net smelter royalty under which Glencore would receive a royalty of 1.5% of all net smelter copper concentrate produced from the CSA Mine and associated approximately $31 million worth of transaction costs.
Metals Acquisition in an 8-K earlier this month disclosed it had signed a syndicated facility agreement with several banks to provide funding for its acquisition of the copper mine. Those changes dramatically alter the scope and terms of the transaction since it was last adjusted in November, although the deal value remains the same. Read more.
