Teck Resources has entered a definitive agreement to acquire all of the issued and outstanding common shares it does not already own in AQM Copper.
Teck owns 42,258,545 shares of AQM, which represents nearly 30% of issued and outstanding common shares.
The principal asset of AQM is its 30% indirect interest at Zafranal copper-gold project located in south Peru. Teck already owns 50% of Zafranal project.
According to the agreement, AQM shareholders will receive C$230,000 ($0.17) per common share in cash.
AQM security holders will receive a total cash consideration of nearly C$25m ($18.65m), other than Teck which includes option holders and deferred share unit holders. It implies that AQM carried a total equity value of C$35m ($26m) on a 100% fully diluted basis.
The agreement also provides a non-solicitation covenant on the part of AQM. It provides the opportunity to AQM to consider and accept a superior proposal, subject to customary ‘fiduciary out’ provisions.
All AQM’s directors and officers have provided their consent to vote in favour of the transaction. The AQM board also recommended AQM security holders to vote for the transaction.
Subject to customary conditions and regulatory approvals, the transaction is expected to close by January next year.
The Zafranal copper-gold project is owned by Compañia Minera Zafranal (CMZ), a joint venture company, which Teck holds a 50% direct interest in and the remaining 50% direct interest is held by Peruvian company Minera AQM Copper Peru (MAQM). Upon completion of this transaction, Teck will hold an 80% interest in CMZ.