M&As this week: Max Resource, Murray Kentucky Energy

2 March 2018 (Last Updated March 2nd, 2018 09:28)

Max Resource has agreed to purchase the entire outstanding share capital of Copperbelt Minerals.

Max Resource has agreed to purchase the entire outstanding share capital of Copperbelt Minerals.

The company will issue 12 million common shares priced at C$0.20 ($0.15) a share, equivalent to C$2.4m ($1.89m), to the shareholders of Copperbelt Minerals. In addition, Max Resource has agreed to make a cash payment of $1.06m at various stages of development.

Max Resource is engaged in gold, silver and copper exploration, while the target company holds the Copperbelt Project located in Cundinamarca Department of central Colombia. Both companies are based in Canada.

Max Resource also holds the sole right to purchase 50% of the 3% net smelter royalty (NSR) for $3m at any time before the start of production from the Copperbelt Project.

Murray Kentucky Energy has acquired the remaining 49% stake in coal mining company Western Kentucky Coal Resources from Armstrong Energy.

Murray Kentucky is engaged in coal exploration, while Armstrong Energy is focused on producing thermal coal from surface and underground mines.

“The company will issue 13.1 million shares to the shareholders of Clara and an additional 13.4 million units upon meeting certain performance-based milestones.”

Companies involved in the transaction are based in the US.

Lucara Diamond has acquired digital platform provider Clara Diamond Solutions for an up-front consideration of C$28.82m ($22.8m).

The company will issue 13.1 million shares to the shareholders of Clara and an additional 13.4 million units upon meeting certain performance-based milestones.

Lucara has also agreed to a profit-sharing mechanism, with the Clara technology founders and Clara management retaining 13.33% and 6.67% respectively of the annual EBITDA generated.

Profit sharing will be subject to a maximum of $25m a year and is valid for ten years.

Lucara has engaged BMO Capital Markets as financial advisers and Blake, Cassels & Graydon in a legal capacity for the transaction. Clara has engaged DuMoulin Black as its legal adviser, while Stikeman Elliott is legal adviser to Clara founders.

Based in Canada, the acquirer company is engaged in diamond mining, while the target company is a provider of a digital sales platform that transforms rough diamonds into specific polished diamonds.