From Nasdaq.com
Ivanhoe Mines Ltd. (IVN) and China'sZijin Mining Group Co., Ltd. have signed a landmark agreement to co-develop the Kamoa copper discovery in the? Democratic Republic of Congo.
As per agreement terms, Zijin - through its subsidiary, Gold Mountains International Mining Company Limited - will acquire a 49.5% share interest in Kamoa Holding Limited, an Ivanhoe subsidiary that presently owns 95% of the Kamoa Project, for an aggregate consideration of? US$412 million or about C$506 million.
The purchase price will be satisfied by an initial payment of? US$206 million in cash upon the closing of the transaction, which is expected on or about July 31, 2015, and is subject to Zijin's receipt of approvals by the government of? the Peoples Republic of China, and certain other customary closing conditions.
The agreements specify that the remaining? US$206 million? will be paid in five equal installments, payable every 3.5 months from closing and continuing through the remainder of 2015 and into 2016.
In addition, Ivanhoe has agreed to sell 1% of its share interest in Kamoa Holding to Crystal River Global Limited for? US$8.32 million? - which Crystal River will pay through a non-interest-bearing, 10-year promissory note.
Zijin also has committed to use its best efforts to arrange or procure project financing for 65% of the capital required to develop the first phase of the Kamoa Project, as set out in the feasibility study, without any recourse, and on terms acceptable to Ivanhoe. Zijin will provide any and all required completion guarantees relating to the securing of project financing for the Kamoa Project.
Upon the successful arrangement or procurement of project financing, Zijin will have the right to acquire Crystal River's 1% share interest in Kamoa Holding. If the 1% Option has not been exercised within seven years from the delivery of the feasibility study, the option will expire and each of Ivanhoe and Zijin then will have the right to buy one-half of the 1% share from Crystal River, which would then result in an equivalent 50%/50% ownership split between the parties.
The agreements also provide that upon exercise of the 1% Option, for an amount to be determined by an independent expert valuator, Zijin will be required to arrange or procure project financing for all subsequent phases of the Kamoa Project, without any recourse, and on terms acceptable to Ivanhoe. In addition, Zijin will provide any and all required completion guarantees relating to the securing of the subsequent project financing for Kamoa's development.