VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 29, 2017) - Trevali Mining Corporation ("Trevali" or the "Company") (TSX:TV)(LMA:TV)(OTCQX:TREVF)(FRANKFURT:4TI) announces the closing of its previously announced bought deal private placement of subscription receipts (the "Subscription Receipts") at a price of C$1.20 per Subscription Receipt (the "Offering") for gross proceeds of C$264,546,000. The Offering was conducted by a syndicate of underwriters led by BMO Capital Markets and including Scotia Capital Inc., TD Securities Inc., Eight Capital, National Bank Financial Inc., Paradigm Capital Inc., Cormark Securities Inc., GMP Securities L.P., Haywood Securities Inc., and Raymond James Ltd. (collectively, the "Underwriters").
A total of 220,455,000 Subscription Receipts were sold pursuant to the Offering, including 28,755,000 Subscription Receipts as a result of the Underwriters' full exercise of an underwriters' option. The Subscription Receipts were distributed by way of a private placement in each of the provinces and territories of Canada, in the United States pursuant to applicable exemptions, and in certain international jurisdictions.
The net proceeds of the Offering will be used to fund a portion of the cash consideration payable to certain subsidiaries of Glencore PLC ("Glencore") whereby Trevali will acquire (the "Transaction") a portfolio of zinc assets from Glencore, including an effective 80% interest in the Rosh Pinah Mine in Namibia, an effective 90% interest in the Perkoa Mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namibia, an option to acquire a 100% interest in the Heath Steele property in Canada and certain related exploration properties and assets for an aggregate purchase price of approximately US$400 million (the "Consideration"), and for general working capital purposes.
The gross proceeds of C$264,546,000, less 50% of the commission payable to the Underwriters and the Underwriters' expenses incurred to date, has been deposited into escrow and shall be released immediately prior to the completion of the Transaction upon the satisfaction of certain conditions (the "Release Conditions") in order to partially fund the Consideration. Each Subscription Receipt entitles the holder thereof to receive one underlying common share in the capital of Trevali (a "Common Share") for no additional consideration or further action on the part of the holder thereof upon satisfaction of the Release Conditions.
If the Release Conditions are not satisfied prior to August 31, 2017, or the definitive agreements relating to the Transaction are terminated pursuant to their terms, the escrow agent will return to the holders of the Subscription Receipts an amount equal to the aggregate purchase price paid for the Subscription Receipts held by them, together with a pro rata portion of interest earned on the escrowed proceeds and the Subscription Receipts will be cancelled and be of no further force or effect.
The TSX has conditionally approved the listing of the Common Shares underlying the Subscription Receipts subject to certain conditions, including receipt of approval of shareholders.
Amendment to Definitive Agreements
As announced by Trevali on March 13, 2017, a portion of the Consideration will be paid to Glencore on closing of the Transaction in cash (the "Cash Consideration") and the remainder by issuing Glencore Common Shares at a deemed price of C$1.20 per Common Share (the "Share Consideration").
The parties have entered into agreements on the date hereof adjusting the breakdown of the Cash Consideration and Share Consideration to be paid to Glencore on closing of the Transaction to allow a greater portion of the Consideration to be paid in Common Shares (the "Amending Agreements"). Specifically, the parties have agreed that the Cash Consideration will now consist of US$227.4 million, subject to customary adjustments, and that the Share Consideration will consist of an aggregate of 193,432,310 Common Shares at a deemed price of C$1.20 per Common Share, representing US$172.6 million in the aggregate. A copy of the Amending Agreements will be available for viewing on Trevali's SEDAR profile at www.sedar.com.
The Transaction is subject to obtaining requisite regulatory approvals (including in respect of antitrust matters), Trevali shareholder approval and other customary closing conditions. The effective date of the Transaction is April 1, 2017 and the closing of the Transaction is expected to occur on or before July 31, 2017.
Further information regarding the Transaction will be contained in a management information circular that Trevali will prepare and file in due course in connection with the special meeting of Trevali shareholders to be held to approve: (i) the issuance of the Share Consideration to Glencore as set forth in the Amending Agreements; (ii) the termination of Trevali's shareholder rights plan; (iii) the issuance of the Common Shares issuable on conversion of the Subscription Receipts; and (iv) a change to the articles of Trevali. All shareholders are urged to read the management information circular once it becomes available as it will contain additional important information concerning the Transaction.
TREVALI SHAREHOLDERS' MEETING
As required by the TSX, Trevali will seek shareholder approval to issue the Common Shares in connection with the Transaction and the Offering. The special meeting of Trevali shareholders is currently scheduled to be held on May 17, 2017 in Vancouver, British Columbia, Canada.
The Board, with interested directors abstaining, based in part on the recommendation of a special committee of directors, has unanimously determined that the proposed Transaction is fair and in the best interests of the Company and will recommend that shareholders vote in favour of resolutions supporting the Transaction.
ABOUT TREVALI MINING CORPORATION
Trevali is a zinc-focused, base metals mining company with two commercially producing operations.
The Company is actively producing zinc and lead-silver concentrates from its 2,000-tonne-per-day Santander mine in Peru and its 3,000-tonne-per-day Caribou mine in the Bathurst Mining Camp of northern New Brunswick. Trevali also owns the Halfmile and Stratmat base metal deposits, located in New Brunswick, that are currently undergoing a Preliminary Economic Assessment reviewing their potential development.
The common shares of Trevali are listed on the TSX (symbol TV), the OTCQX (symbol TREVF), the Lima Stock Exchange (symbol TV), and the Frankfurt Exchange (symbol 4TI). For further details on Trevali, readers are referred to the Company's website (www.trevali.com) and to Canadian regulatory filings on SEDAR at www.sedar.com.
