Laguna Gold Funded $12.5M for Mine Purchase

 Nyrstar NV (Nyrstar or the ‘Company’) recently announced that it has entered into a Share Purchase Agreement (the ‘Agreement’) to sell its El Toqui mine in Chile to Laguna Gold Limited (Laguna), an Australian based mining company, for a total cash consideration of US$25 million (the ‘Consideration’), plus future proceeds through a price participation agreement with Laguna (the ‘Transaction’).

Macquarie Bank Limited has granted facilities totalling US$12,500,000 to Laguna to assist with the purchase.

The Consideration payable to Nyrstar consists of US$12 million payable in cash by the closing of the Transaction and US$13 million in milestone cash payments over a four year period following the closing of the Transaction. In addition, Nyrstar will have the opportunity to retain upside exposure to an improving commodity price environment by receiving additional cash proceeds through a price participation agreement with Laguna on the first 7.9 million tonnes of ore processed at El Toqui following the closing of the Transaction. The price participation commences above a zinc price of $2,100 per tonne and is applicable at set zinc prices. As an example, assuming a flat zinc price of $2,300 per tonne post-closing of the Transaction, Nyrstar would receive additional proceeds of approximately US$19.5 million from the price participation on an undiscounted basis.

As part of the Transaction, Nyrstar and Laguna have also agreed to enter into an off-take agreement pursuant to which Laguna will sell to Nyrstar 100% of the zinc concentrate production from El Toqui for the initial four year period following the closure of the Transaction and 85% of the zinc concentrate production thereafter. Closing of the Transaction is subject to customary closing conditions and is expected to occur within two months.

GrilloHiggins Lawyers from Melbourne, Australia, acted for Laguna, and its team was led by partner Garrick Higgins and Senior Associate Eli Davis-Ross.

Bofill Mir & Alvarez Jana Lawyers assisted Laguna in Chile. BMO Capital Markets Limited and Lazard & Co. acted as financial advisors to Nyrstar in connection with the Transaction.

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