Central Asia Metals to acquire 100% stake in Lynx Resources for $402.5m
Central Asia Metals (CAML) has conditionally agreed to acquire a 100% stake in Lynx Resources, which owns the SASA zinc-lead mine in Macedonia, in a deal valued at $402.5m.
The company will acquire the stake from Orion Co-Investments III and Fusion Capital.
Following the acquisition, SASA is set to become a low-cost operation with an operating track record and reserve base supporting production until at least 2032.
Central Asia Metals executive chairman Nick Clarke said: "The combination of CAML and Lynx creates an AIM listed, diversified, base metals producer with low-cost, long-life operations, which are expected to generate positive cash-flows throughout the commodity cycle.
"The transaction is projected to be both earnings and cash-flow per share accretive in the first full year, which is in line with our business development strategy of pursuing value accretive acquisitions in the base metals sector that enable CAML to continue paying one of the leading dividends in the sector."
Last year, the mine produced 783,000t of ore, which generated 22,515t of zinc and 28,955t of lead in concentrate.
The latest acquisition will allow CAML to expand and diversify with the addition of SASA, which is located in a prospective jurisdiction.
Furthermore, the combination of CAML and Lynx is expected to provide the commodity, geographic and operational diversification.
Orion Mine Finance chief investment officer Oskar Lewnowski said: "We feel strongly that the combined entity will be well-placed to benefit from strong fundamentals in the copper and zinc markets. We look forward to becoming a long-term, supportive shareholder in CAML."