Sandfire Resources has reached an agreement to purchase Talisman Mining’s stake in the Springfield joint venture project in the Goldfields region for $72.3 million.
Sandfire Resources has reached an agreement to purchase Talisman Mining’s stake in the Springfield joint venture project in the Goldfields region for $72.3 million.
Talisman has a 30 per cent interest in the project, with Sandfire already owning the remaining 70 per cent.
Sandfire entered into a farm-in deal at the project in 2013 worth $15 million.
Talisman’s tenements within Springfield include the Monty copper-gold deposit, which is currently being developed as a new satellite underground mine to feed Sandfire’s nearby DeGrussa copper-gold mine.
Under the deal, Talisman will receive a cash consideration of $72.3 million.
Talisman will repay all existing debts to Taurus Funds Management under the loan facility associated with the project, which currently stands at $US11.5 million ($14.5 million).
Sandfire will assume the royalty for the Monty project held by Taurus, while Talisman will be granted a 1 per cent net smelter return royalty for the Springfield project.
Completion of the deal is subject to a number of conditions, including due diligence and shareholder approval.
The board of Talisman has unanimously supported the transaction and the company’s largest shareholder, Kerry Harmanis, has also indicated his support for the deal.
Talisman chairman Jeremy Kirkwood said the company was pleased to have reached an agreement.
“We believe the key terms, as outlined, represent strong value realisation for Talisman’s 30 per cent share of the Springfield JV, and are in the best interests of all Talisman shareholders,” he said.
“The upfront $72.3 million cash payment crystallises substantial, immediate and certain value while removing exposure to future development and operating risks at Monty.”
Sandfire managing director Karl Simich said the two companies had established a strong relationship since the original farm-in deal in 2013.
“The transaction allows Talisman and its shareholders to crystallise significant upfront value for their share of the Springfield project on attractive terms, allowing them to focus on their other projects in NSW and WA while retaining exposure to any future exploration success via an ongoing royalty over any future discoveries made at the Springfield joint ventures,” he said.
“From Sandfire’s perspective, the transaction will simplify and streamline the development of Monty and any further exploration going forward.”
Sternship Advisers and Fivemark Partners are acting as Talisman’s financial advisers, and DLA Piper as legal adviser.
Shares in Sandfire were off 0.5 per cent at $9.55 each at 330pm AEDT, while Talisman shares were up 7.7 per cent at 28 cents each.
