...Acquisition of Terrane Metals Corp. and Gold Stream Transaction with Royal Gold, Inc.
Monday, 25 October 2010
Thompson Creek Metals Company Inc. ("Thompson Creek" or "Company") (NYSE:TC and TSX:TCM), today announced that it has completed its acquisition of Terrane Metals Corp. ("Terrane") effective October 20, 2010.
As previously announced, the acquisition, by way of Plan of Arrangement (the "Arrangement"), was overwhelmingly adopted by the equityholders of Terrane, and a Final Order from the Supreme Court of British Columbia was issued approving the Arrangement. Pursuant to the terms of the Arrangement, Terrane shareholders are entitled to receive C$0.90 in cash and 0.052 of a Thompson Creek share per Terrane share. Based on a five-day volume weighted average of Thompson Creek's closing price on the Toronto Stock Exchange ("TSX") of C$11.54 per share, the total value of consideration paid to the shareholders of Terrane was approximately C$700 million, of which approximately C$420 million was paid in cash and the remainder was from the issuance of approximately 24.3 million shares of Thompson Creek.
Kevin Loughrey, Chairman and Chief Executive Officer of Thompson Creek, commented, "Today is a very special day for our Company and our shareholders as we complete our first major acquisition and evolve Thompson Creek from a pure molybdenum producer to a diversified base metals company. We appreciate the support of our shareholders, and we welcome the Terrane shareholders, as we continue to explore opportunities to increase shareholder value. We are excited to begin construction of the Mt. Milligan project, which we expect will generate substantial growth in revenues for the Company when it is completed, as well as continue to advance our other development projects."
Concurrent with the closing of the Arrangement, Thompson Creek has completed its Mt. Milligan gold stream transaction with Royal Gold, Inc. ("Royal Gold"), pursuant to which Royal Gold has acquired the right to 25% of the payable gold from the Mt. Milligan project. Total consideration for the transaction was $311.5 million, of which $226.5 was paid in conjunction with the closing of the Arrangement, and the remaining $85.0 million to be paid during construction of the Mt. Milligan project (all amounts in U.S. dollars, unless otherwise noted).
"We are pleased to have completed the gold stream transaction and look forward to a long-term relationship with Royal Gold," stated Mr. Loughrey.
Thompson Creek intends to fund the remaining Mt. Milligan construction costs over approximately the next two and a half years from a combination of (i) combined cash balances of Thompson Creek and Terrane (ii) the $311.5 million of proceeds from the gold stream transaction with Royal Gold, (iii) up to $450 million of debt finance in the form of equipment financing and a potential bank credit facility, (iv) internal cash generation, and (v) potential warrant proceeds including Thompson Creek's existing warrants due in 2011 (potential proceeds of C$220 million) as well as the Terrane warrants due in 2011 and 2012 that will remain outstanding (potential net proceeds of approximately C$26 million).
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