Engineering & Mining Journal

APR 2017

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REGIONAL NEWS - AFRICA 14 E&MJ • APRIL 2017 www.e-mj.com Trevali Buying Glencore Interests in Rosh Pinah, Perkoa Trevali Mining has entered into definitive agreements with Glencore PLC and cer- tain of its subsidiaries to acquire a portfo- lio of zinc assets from Glencore, including an 80% interest in the Rosh Pinah mine in Namibia, a 90% interest in the Perkoa mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namib- ia, an option to acquire 100% interest in the Heath Steele property in Canada, and certain related exploration properties and assets for an aggregate purchase price of approximately $400 million. Trevali is headquartered in Vancouver, British Columbia, and produces zinc and lead-silver concentrates from its 2,000-met- ric-tons-per-day (mt/d) Santander mine in Peru and its 3,000-mt/d Caribou mine in the Bathurst mining camp of northern New Brunswick. The Glencore transaction will more than double Trevali's zinc produc- tion to approximately 410 million payable pounds per year (lb/y), positioning the com- pany as a top 10 global zinc producer. "The acquisition of Rosh Pinah and Perkoa is an historic event and unique opportunity for Trevali and sets the stage for a multi-asset, low-cost global zinc producer," said Dr. Mark Cruise, presi- dent and CEO, Trevali Mining. "The as- sets provide a strong upside in the current strengthening macro-zinc environment through scale of production as well as an attractive package of exploration ground." The transaction is subject to custom- ary regulatory approvals and is expected to close by July. Following completion of the transaction, Glencore will have offtake agreements for all four of Trevali's mines. The Rosh Pinah mine is located in southwest Namibia, approximately 600 kilometers (km) south of Windhoek, the nation's capital. The underground mine is owned 80.08% by Glencore and 19.92% by Namibian empowerment companies. Production during 2017 is forecast at 100 million pounds (lb) to 105 million lb of zinc in concentrates at all-in sustaining costs of $0.68/lb to $0.72/lb. Mine life is forecast at more than 14 years. The Perkoa mine is located in Sanguie province, Burkina Faso, approximately 120 km west of the capital city of Ouaga- dougou. The underground mine is owned 90% by Glencore and 10% by the govern- ment of Burkina Faso. Production during 2017 is forecast at 165 million lb to 170 million lb of zinc in concentrates at all-in sustaining costs of $0.83/lb to $0.87/lb. Mine life is forecast at more than six years. Consideration to be paid by Trevali to Glencore on closing of the transaction will consist of approximately $244 million in cash and the issuance of about 175 mil- lion Trevali common shares. Glencore will become a cornerstone investor in Trevali, with an approximate 25% interest in the company. "Trevali has a proven track record in the sector, as demonstrated by their success in open- ing up the Santander mine in Peru and the Caribou mine in Canada," said Daniel Maté, head of zinc marketing for Glencore. "We have been working together as part- ners since their first mine was built, and we share the same vision for the future growth of the business through value-creating or- ganic and inorganic growth opportunities. We are excited to form part of this unique global zinc vehicle, providing pure zinc ex- posure across a wide geographic footprint." Teck Sells Interest in Haib to Deep-South Resources Teck Resources Ltd. announced it has en- tered into a definitive agreement to sell its 70% interest in Haib Minerals Ltd. to Deep-South Resources Inc., who holds the remaining 30% interest in Haib. Haib holds a 100% interest in the Haib copper project located in Namibia. As part of the consideration under the sales agreement, Teck will receive 13.6 million common shares of Deep-South at closing. The shares issued on closing, together with the 4.17 million common shares currently held by Teck, will result in Teck holding approximately 35% of Deep-South's outstanding shares on an undiluted basis. In the event that Teck's common shares represents less than 35% of the issued and outstanding common shares immediately following closing, Deep- South will issue additional shares to Teck in order for the company to maintain post-closing ownership at 35%. In addi- tion, Teck holds a $373,195 convertible debenture, that if Teck were to convert the entire principal amount, Teck would hold approximately 38% of Deep-South's out- standing common shares immediately fol- lowing closing of the transaction, calcu- lated on a partially diluted basis assuming the conversion of the debenture only. Teck, headquartered in Vancouver, Canada, is a diversified resource compa- ny committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. The Rosh Pinah mine in Namibia is expected to produce 100 million lb zinc in concentrates.

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