Terrafame acquires assets related to mining operations from Talvivaara Mining Company Plc 1.7.2016 17:46
Terrafame Ltd. and Talvivaara Mining Company Plc have completed a transaction in which Terrafame has purchased essential assets related to the operation of the Sotkamo mine from Talvivaara Mining Company Plc. The assets being acquired include, for example, the lime plant necessary for the production process, the laboratory, and the geological data related to the mine. In the transaction, the employees of the laboratory will transfer to Terrafame Ltd.’s service as existing employees, and Terrafame Ltd. is entitled to recruit key employees of Talvivaara Mining Company Plc working at the mine.
Terrafame will pay a total of EUR 1.4 million in cash for the assets. In addition, Terrafame will transfer as compensation to Talvivaara Mining Company Plc the receivables with a nominal value of approximately EUR 14 million held by Terrafame and guaranteed by Talvivaara Mining Company Plc. As part of the transaction, Terrafame will pay Talvivaara Mining Company Plc the service fees and the rent of the lime plant until the end of June in accordance with the agreements made between the companies.
“Since autumn 2015, we have sought a solution with Talvivaara Mining Company Plc concerning key assets related to Terrafame’s mining operations. We are pleased that the asset purchase agreement has now been concluded. As a result of the transaction, all assets and operations related to the mine are now owned by Terrafame. This clarifies the situation at the mine significantly and thus contributes to discussions on the additional financing of Terrafame,” says Matti Hietanen, CEO of Terrafame Group Ltd.
“Terrafame Group and Talvivaara Mining Group Plc signed a preliminary agreement in January 2016 related to the acquisition of the assets. Terrafame withdrew from the preliminary agreement in the beginning of June, and the transaction now concluded was negotiated after this event. From Terrafame’s perspective, the transaction now concluded is the fastest and clearest way to ensure that Terrafame can assume ownership of the assets,” Hietanen concludes.
The transaction has been completed on 30 June 2016, and the ownership of the assets has been transferred to Terrafame. Should Talvivaara Mining Company Plc’s Extraordinary General Meeting to be held no later than 15 August 2016 not approve the transaction, it would become null and void. The transaction does not include other terms and conditions that could annul the transaction, and from the perspective of Terrafame Group, the transaction has now been completed in full.
In December 2015, Terrafame Group implemented a contractual arrangement in which the receivables guaranteed by Talvivaara Mining Company Plc and held by Nyrstar Sales & Marketing AG were transferred to Terrafame Group. These receivables concern debts related to agreements made by the now bankrupt Talvivaara Sotkamo Ltd. and guaranteed by Talvivaara Mining Company Plc.
Terrafame Group Ltd.
CEO Matti Hietanen, tel. +358 40 823 8806
Terrafame Group Ltd. is a special-purpose company wholly owned by the State of Finland. It is responsible for managing the state ownership and exercising the owner's power at Terrafame Ltd. Terrafame Group's role is to secure private supplementary financing and support the stabilisation and development of the mining company's operations. Terrafame Group is also responsible for helping the development of new technological solutions related to mine water purification.
Terrafame Ltd. is a Finnish mining company producing primarily nickel and zinc by bioheapleaching at its mine located in Sotkamo. The aim is environmentally sustainable, safe and economically viable mining operations. Terrafame is owned by Terrafame Group Ltd.