First Quantum Minerals Ltd. has reached an agreement with Eurasian Natural Resources Corporation PLC (ENRC) to dispose of its residual claims and assets in regards to the Kolwezi Tailings project and the Frontier and Lonshi mines and related properties located in the Democratic Republic of Congo (DRC). The settlement cost is US$1.25 billion, comprised of US$750 million payable on closing together with a deferred consideration of US$500 million in the form of a three-year promissory note with an interest coupon of three percent which is payable annually in arrears.
Under the terms of the acquisition, ENRC will acquire, with certain limited exceptions, all of First Quantum's assets and property either physically located within the DRC or relating to the operations formerly carried out by First Quantum and its subsidiaries in the DRC, through the acquisition of:
- Congo Mineral Developments Limited (as 65% shareholder in KMT, the former developer of the Kolwezi Tailings project);
- Frontier SPRL (the former owner/operator of the Frontier Mine);
- Compagnie Minière de Sakania SPRL (the former owner/operator of the Lonshi Mine); and
- Roan Prospecting & Mining SPRL (the holder of certain assets relating to the Kolwezi Tailings Project).
Closing of the transaction is expected to occur on or before February 29, 2012, and is subject to certain conditions, including the settlement of various arbitration and court proceedings among First Quantum, ENRC and the DRC Government relating to the companies being sold and their assets and operations in the DRC.
A deal team led by John Turner and including Daniel Batista (M&A), Nigel Gordon, June Paddock (Corporate/Commercial), and Stuart Hills (Banking) is advising First Quantum in this transaction.
Geoff Cowper Q.C. and his co-counsel Dominique Gibbens have led a team of litigators that includes Henri Alvarez Q.C., Keri Gammon, René Cadieux, Philippe Charest-Beaudry, Tina Cicchetti, Stanley Martin and Vincent Cérat Lagana in respect of the arbitration and court proceedings being settled in connection with the transaction, and they continue to advise First Quantum in respect of such settlements.