Talvivaara Mining, Terrafame agree to asset sale and debt settlement

By Caroline Salls

Pittsburgh, July 1 – Talvivaara Mining Co. plc and Terrafame Ltd signed agreements for the sale of Talvivaara’s Sotkamo mining operations assets and the settlement of Talvivaara’s €14 million guarantee liabilities under a loan and streaming holiday agreement and €203.4 million in liabilities under a zinc in concentrate purchase agreement, according to a news release.

The purchase price for the assets sold consists of a full and final settlement of the guarantee liabilities under the holiday and streaming agreements and a cash component of €1.4 million payable by Terrafame.

The assets being sold include a lime plant needed for the Sotkamo operations, a laboratory and rights to geological, laboratory and production-related data associated with the Sotkamo mine.

Talvivaara said the agreements include a cancellation clause under which the transactions would become null and void if an extraordinary general meeting of shareholders does not approve them. Shareholders Solidium Ltd. and Pekka Perä, who together hold roughly 20% of the company’s shares, have preliminary agreed to vote in favor of the transaction at the extraordinary general meeting.

In addition, the parties agreed on the transfer of laboratory personnel to Terrafame as old employees, as well as on the possibility for Terrafame to recruit some of Talvivaara’s personnel currently providing services related to operation of the mine.

The parties agreed to immediately terminate the service agreement and the lime plant lease agreement signed on Nov. 19, 2014 and transferred to Terrafame on Aug. 14, 2015.

Although all of the main assets previously generating income for Talvivaara have been transferred to Terrafame, the company said the arrangement will significantly improve the possibility for the completion of its corporate restructuring proceedings and facilitate the development of new business opportunities.

Talvivaara is a nickel mining company based in Espoo, Finland.

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