- Definitive sale and purchase agreement entered into with
Glencore Operations Australia Pty Limited, a wholly-owned
subsidiary of Glencore plc (“Glencore”), for the acquisition of the
CSA Copper Mine (“CSA” or “CSA Copper Mine”) in New South Wales,
Australia
- CSA is an established, high-grade producing copper mine that is
expected to produce more than 40kt of copper in 2022 with an
estimated current mine life of over 15 years1
- Purchase price of:
- US$1,100 million, of which Glencore will subscribe for $50m of
equity; plus
- a 1.5% copper net smelter royalty (“NSR”) to Glencore,
- Purchase price implies a 4.5x multiple of 2022E EBITDA2
- Near-term opportunities identified to add significant value via
cost reductions and mine life extension
Metals Acquisition Corp. (NYSE: MTAL.U) (“MAC”) today announced
that it has entered into a definitive sale and purchase agreement
(“Transaction Agreement”) with Glencore to acquire CSA for total
consideration of US$1,100 million (consisting of US$1,050 million
of cash and US$50 million of common equity) plus a 1.5% copper NSR
(the “Transaction”). The Transaction will be effected by the
acquisition by MAC’s 100%-owned subsidiary, Metals Acquisition
Corp. (Australia) Pty Ltd, of the issued share capital of Cobar
Management Pty Limited, a 100%-owned Glencore subsidiary which owns
CSA.
Mick McMullen, MAC CEO, said: "The acquisition of CSA represents
a strong strategic fit for MAC. Our management team’s operational
expertise, understanding of regional operations and relationships
with local stakeholders uniquely position us to identify and
realize the full potential value of the asset. CSA also provides us
with an ideal cornerstone asset with which to establish a
high-quality, mid-tier base metals portfolio.
“We believe that copper has favorable fundamentals that will
continue to support an elevated copper price. Copper is expected to
play a key role in the global energy transition “megatrend”, with
approximately 1 million tonnes per annum of new supply required
from 2024 onwards in order to meet the surging demand forecast.
With few new projects globally in the pipeline, increasing
permitting issues and jurisdictional risk, and declining copper
grades across the industry, we believe that there are significant
challenges ahead to close the projected supply deficit.”
CSA is a producing, high-grade, long-life, underground copper
mine located in the Tier 1 mining jurisdiction of western New South
Wales, Australia. CSA has been in operation since 1967 and has a
strong ESG track record.
In 2021, CSA produced 41kt of payable copper and 459koz of
payable silver, with normalised C1 cash cost of US$1.72 per pound
of copper.3 During the due diligence process, MAC identified
multiple opportunities to optimize the operation, which could
improve payable copper production and reduce the C1 cash cost. CSA
has a current estimated mine life of over 15 years4, and MAC has
identified opportunities to further extend it, subject to
exploration success. CSA will benefit from approximately US$130
million of recent capital investment expected prior to Transaction
completion.
The US$1,100 million purchase price implies a 4.5x multiple of
2022E EBITDA.5
The Transaction has been unanimously approved by the Board of
Directors of MAC, and is expected to be completed in 2022, subject
to the approval of MAC’s shareholders and other customary closing
conditions, including regulatory approvals.
Transaction Funding6
The US$1,100 million purchase price and associated US$50 million
of required working capital and transaction costs (US$1,150 million
total) is expected to be funded through a combination of:
- US$465 million of debt facilities and silver streaming
agreements as follows:
- US$375 million underwritten senior secured debt facility from
Citibank N.A. and Commonwealth Bank of Australia, comprising a
US$350 million acquisition term loan and US$25 million revolving
credit facility for working capital7;
- US$90 million silver streaming agreement with a subsidiary of
Osisko Gold Royalties Ltd (“OGR”)
- US$175 million mezzanine convertible debt facility led by
Sprott Resource Lending Corp. and investors (collectively
“Sprott”);
- US$41.75 million equity, including US$25 million from Sprott,
US$15 million from OGR and US$1.75 million from Mr. McMullen and
Mr. Crouse;
- US$50 million of common equity paid to Glencore (included in
US$1,100 million purchase price); and
- US$418.25 million to be sourced from a combination of US$265
million cash in trust (subject to share redemptions), new equity
and alternative sources.8
Advisors
Citi is serving as financial advisor and Squire Patton Boggs and
Paul Hastings LLP are serving as legal advisors to MAC. Citigroup
Global Markets Inc., Canaccord Genuity, and Ashanti Capital Pty Ltd
have been engaged as placement agents in connection with an equity
raise.
Further Information
Additional information about the Transaction, including a copy
of the Transaction Agreement and an investor presentation, will be
included in a Current Report on Form 8-K to be filed by MAC with
the SEC and available at www.sec.gov.
Investor Conference Call
MAC will host an investor conference call to discuss the
Transaction on Thursday, March 17, 2022 at 10:30am ET. All
interested parties may listen by selecting the webcast link.
https://edge.media-server.com/mmc/p/h2vkhgsv
Parties who wish to participate in the webcast via
teleconference may dial (833) 945-2473, or parties outside of the
U.S. may dial (706) 634-7494. The conference ID number is 7576184.
An audio-only replay will be available for replay after the call's
completion. To access the recording, please dial (855) 859-2056 or,
within the U.S. only, (404) 537-3406, and when prompted for the
conference ID, enter 7576184.
About Metals Acquisition Corp.
MAC was formed as a blank check company for the purpose of
effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with
one or more businesses. The Company is led by Mick McMullen (Chief
Executive Officer), Jaco Crouse (Chief Financial Officer) and Dan
Vujcic (Chief Development Officer). The Company is focused on
green-economy metals and mining businesses in high quality, stable
jurisdictions.
Important Information About the Proposed Business Combination
and Where to Find It
In connection with the proposed business combination, MAC
intends to file a preliminary and definitive proxy statement with
the SEC. MAC's shareholders and other interested persons are
advised to read, when available, the preliminary proxy statement
and the amendments thereto and the definitive proxy statement as
well as other documents filed with the SEC in connection with the
proposed business combination, as these materials will contain
important information about CSA, MAC and the proposed business
combination. When available, the definitive proxy statement and
other relevant materials for the proposed business combination will
be mailed to shareholders of MAC as of a record date to be
established for voting on, among other things, the proposed
business combination. Shareholders will also be able to obtain
copies of the preliminary proxy statement, the definitive proxy
statement, and other documents filed with the SEC that will be
incorporated by reference therein, without charge, once available,
at the SEC's website at www.sec.gov, or by directing a request to:
Investors@soa-corp.com. The information contained on, or that may
be accessed through, the websites referenced in this communication
is not incorporated by reference into, and is not a part of, this
communication.
Participants in the Solicitation
MAC and its directors and executive officers may be deemed
participants in the solicitation of proxies from MAC's shareholders
with respect to the business combination. MAC stockholders and
other interested persons may obtain, without charge, more detailed
information regarding the directors and officers of MAC in MAC’s
final prospectus filed with the SEC on July 30, 2021 in connection
with MAC’s initial public offering. Information regarding the
persons who may, under SEC rules, be deemed participants in the
solicitation of proxies to MAC’s shareholders in connection with
the proposed business combination will be set forth in the proxy
statement for the proposed business combination when available.
Additional information regarding the interests of participants in
the solicitation of proxies in connection with the proposed
business combination will be included in the proxy statement that
MAC intends to file with the SEC.
Use of Projections and Non-GAAP Measures
This press release contains projected financial information with
respect to the combined company, namely the CSA Copper Mine’s
projected EBITDA for 2022. Such projected financial information
constitutes forward-looking information and is for illustrative
purposes only, and should not be relied upon as necessarily being
indicative of future results. The assumptions and estimates
underlying such projected financial information are inherently
uncertain and are subject to a wide variety of significant
business, economic, competitive and other risks and uncertainties
that could cause actual results to differ materially from those
contained in the prospective financial information. Actual results
may differ materially from the results contemplated by the
projected financial information contained in this press release,
and the inclusion of such information in this press release should
not be regarded as a representation by any person that the results
reflected in such projections will be achieved. The independent
auditors of MAC have not audited, reviewed, compiled, or performed
any procedures with respect to the projections for the purpose of
their inclusion in this press release, and accordingly, did not
express an opinion or provide any other form of assurance with
respect thereto for the purpose of this press release. Some of the
financial information and data contained in this press release,
such as EBITDA, have not been prepared in accordance with United
States generally accepted accounting principles (“GAAP”). EBITDA is
defined as net earnings (loss) before interest expense, income tax
expense (benefit), depreciation and amortization. MAC believes
these non-GAAP measures of financial results provide useful
information to management and investors regarding certain financial
and business trends relating to the CSA Copper Mine’s financial
condition and results of operations. MAC believes that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating projected operating results and
trends. MAC’s method of determining these non-GAAP measures may be
different from other companies' methods and, therefore, may not be
comparable to those used by other companies and MAC does not
recommend the sole use of these non-GAAP measures to assess its
financial performance. Management does not consider these non-GAAP
measures in isolation or as an alternative to financial measures
determined in accordance with GAAP. The principal limitation of
these non-GAAP financial measures is that they exclude significant
expenses and income that are required by GAAP to be recorded in
MAC’s financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which expense and income are excluded or included
in determining these non-GAAP financial measures. In order to
compensate for these limitations, management intends to present
non-
GAAP financial measures in connection with GAAP results. MAC is
not providing a reconciliation of projected EBITDA for future years
to the most directly comparable measure prepared in accordance with
GAAP because MAC is unable to provide this reconciliation without
unreasonable effort due to the uncertainty and inherent difficulty
of predicting the occurrence, the financial impact, and the periods
in which the adjustments may be recognized. For the same reasons,
MAC is unable to address the probable significance of the
unavailable information, which could be material to future
results.
Forward Looking Statements
This press release includes “forward-looking statements”. MAC’s
actual results may differ from expectations, estimates, and
projections and, consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions (or the negative versions of such words or expressions)
are intended to identify such forward-looking statements. These
forward-looking statements include, without limitation, MAC’s
expectations with respect to future performance of the CSA Copper
Mine and anticipated financial impacts and other effects of the
proposed business combination, the satisfaction of the closing
conditions to the proposed transaction and the timing of the
completion of the proposed transaction. These forward-looking
statements involve significant risks and uncertainties that could
cause the actual results to differ materially from those discussed
in the forward-looking statements. Most of these factors are
outside MAC’s control and are difficult to predict. Factors that
may cause such differences include, but are not limited to: the
occurrence of any event, change, or other circumstances that could
give rise to the termination of the Transaction Agreement; the
outcome of any legal proceedings that may be instituted against MAC
following the announcement of the Transaction Agreement; the
inability to complete the proposed transaction, including due to
failure to obtain approval of the shareholders of MAC, certain
regulatory approvals, or satisfy other conditions to closing in the
Transaction Agreement; the occurrence of any event, change, or
other circumstance that could give rise to the termination of the
Transaction Agreement or could otherwise cause the transaction to
fail to close MAC’s inability to secure the expecting financing for
the consideration under the Transaction Agreement; the inability to
obtain or maintain the listing of MAC’s shares following the
proposed transaction; the risk that the proposed transaction
disrupts current plans and operations as a result of the
announcement and consummation of the proposed business combination;
the ability to recognize the anticipated benefits of the proposed
business combination, which may be affected by, among other things;
the supply and demand for copper; the future price of copper; the
timing and amount of estimated future production, costs of
production, capital expenditures and requirements for additional
capital; cash flow provided by operating activities; unanticipated
reclamation expenses; claims and limitations on insurance coverage;
the uncertainty in mineral resource estimates; the uncertainty in
geological, metallurgical and geotechnical studies and opinions;
infrastructure risks; and dependence on key management personnel
and executive officers; and other risks and uncertainties indicated
from time to time in the final prospectus of MAC for its initial
public offering and the proxy statement relating to the proposed
business combination, including those under “Risk Factors” therein,
and in MAC’s other filings with the SEC. MAC caution that the
foregoing list of factors is not exclusive. MAC caution readers not
to place undue reliance upon any forward-looking statements, which
speak only as of the date made. MAC do not undertake or accept any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect any change
in its expectations or any change in events, conditions, or
circumstances on which any such statement is based.
More information on potential factors that could affect MAC’s or
CSA’s financial results is included from time to time in MAC’s
public reports filed with the SEC, including its Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K as well as the preliminary and the definitive proxy
statements MAC intends to file with the SEC in connection with
MAC’s solicitation of proxies for the meeting of stockholders to be
held to approve, among other things, the proposed business
combination. If any of these risks materialize or MAC’s assumptions
prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. There may be
additional risks that MAC does not presently know, or that MAC
currently believes are immaterial, that could also cause actual
results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect MAC’s
expectations, plans or forecasts of future events and views as of
the date of this communication. MAC anticipates that subsequent
events and developments will cause its assessments to change.
However, while MAC may elect to update these forward-looking
statements at some point in the future, MAC specifically disclaims
any obligation to do so, except as required by law. These
forward-looking statements should not be relied upon as
representing MAC’s assessment as of any date subsequent to the date
of this communication. Accordingly, undue reliance should not be
placed upon the forward-looking statements.
No Offer or Solicitation
This press release shall not constitute a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the proposed business combination. This press release
shall also not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of
securities in any states or jurisdictions in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, or an exemption therefrom.
_____________________________ 1 Based on management estimates. 2
2022E EBITDA based on management estimates, using market offtake
terms, forward curve commodity prices at March 15, 2022 and
assuming full year ownership. Actual results may vary based on date
of deal completion. Copper price hedges for 30% of production for
the first 3 years expected to be in place (actual forward curve at
time of deal completion may vary). See “Use of Projections and
Non-GAAP Measures.” 3 Normalised for realisation costs consistent
with management estimates in the forecast period (including
treatment charges and refining charges). 4 Based on management
estimates. 5 2022E EBITDA based on management estimates, using
market offtake terms, forward curve commodity prices at March 15,
2022 and assuming full year ownership. Actual results may vary
based on date of deal completion. Copper price hedges for 30% of
production for the first 3 years expected to be in place (actual
forward curve at time of deal completion may vary). See “Use of
Projections and Non-GAAP Measures.” 6 Subject to significant
conditions, including negotiation of binding documentation. 7
Revolving working capital facility available at financial close, it
can not be used for acquisition funding or associated costs. 8 To
the extent redemptions are higher than expected, additional new
equity and alternative sources of funding would need to be
secured.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220317005377/en/
Mick McMullen Chief Executive Officer Metals Acquisition Corp.
+1 (817) 698-9901
Dan Vujcic Chief Development Officer Metals Acquisition Corp.
+44 7825 090950
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