UK-based investment and capital advisory firm Audley Capital Advisors has signed an agreement to acquire Talvivaara’s nickel mining operations in Sotkamo, eastern Finland from its Bankruptcy Estate.
Finland, through its wholly owned company Terrafame, also signed an investment agreement with Audley.
In November 2014 Talvivaara Sotkamo filed for bankruptcy following a decline in nickel price.
The Audley Consortium will become the lead investor and operator with an 85% ownership interest in the new mining company and the remaining 15% would be owned by Terrafame.
According to Talvivaara, the agreements are aimed at re-establishing the operations and continuing the business of the mine within a newly established mining company.
The consortium and Terrafame propose to inject more than €200m to restart operations of the mine.
Prior to closing the transaction, various steps are needed to be put in place including the provision of the necessary regulatory permits and the obtaining of committed financing.
The parties have agreed not to disclose the purchase price.
Closing is expected to take place during the summer 2015 and until then the Bankruptcy Estate will maintain and manage the business.
Finland Minister of Economic Affairs Jan Vapaavuori said: "If completed, the deal signed with Audley will provide sufficient financing to develop the mining operations and Talvivaara with new managerial talent."
Jari Salminen of Talvivaara Sotkamo Bankruptcy Estate said: "The transaction to be completed would support both the position of the employees and minimisation of the environmental risks. All efforts will be made in order to finalise the transaction."
Image: Audley Consortium will own an 85% interest in the new mining company. Photo: courtesy of Finnish Government.