14/07/2008 - 15:33

Troy raises $48m from asset sale

14/07/2008 - 15:33

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West Perth-based gold miner Troy Resources NL has cashed in its profitable investment in Canadian company Comaplex, raising $47.9 million and potentially more under a 'top up' deal.

West Perth-based gold miner Troy Resources NL has cashed in its profitable investment in Canadian company Comaplex, raising $47.9 million and potentially more under a 'top up' deal.

 

A Troy announcement is pasted below:

Troy is pleased to announce it has agreed to a private sale of its 7,628,571 shares in TSX listed Comaplex Minerals Corp. ("Comaplex"), representing approximately 14.5% of the issued and outstanding shares of Comaplex, to Agnico-Eagle Mines Limited ("Agnico-Eagle") for C$6.15 per share for total proceeds of C$46.9 million (approximately A$47.9 million).

This represents a 21% premium to the most recent market price.

The agreement with Agnico-Eagle is subject to a "disaster out" and a "material adverse change out", not being triggered prior to completion of the transaction. Completion is expected to occur promptly and a further news release will be issued on completion.

As part of the transaction Troy also has a "Top Up" agreement with Agnico-Eagle where, if Agnico-Eagle move to a majority interest in Comaplex within 18 months of this agreement, Agnico-Eagle will pay Troy the difference between their final purchase price per share and this transaction price of C$6.15 per share.

Troy purchased its stake in Comaplex in January 2007 for A$27 million or approximately A$3.53 per share and thus this sale represents a gain of approximately A$2.73 per share or 77%.

Troy's CEO Paul Benson said, "I think this is an excellent win-win outcome for Troy and Agnico-Eagle. We have been great believers in the Meliadine project and are of the view that one day it will be a producing mine. For a company the size of Troy it makes no sense having this much capital tied up in a project over which we have no direct control."

"In addition to receiving a premium to the current market price, Troy shareholders also benefit from the Top Up agreement should Agnico-Eagle move to majority ownership of Comaplex in the next 18 months. This agreement has real option value for Troy shareholders. Agnico-Eagle has one of the most impressive development records in the industry with other interests in the region and I am sure they will bring value to the project."

"From Troy's perspective this has been a great investment appreciating by 77% in the 18 months we held the interest. The total proceeds from the sale of approximately A$47.9 million puts Troy in a fantastic position to capture new growth opportunities."

"This cash balance, together with the complete gold processing plant we have in storage in New South Wales, puts Troy in an excellent position to fast track a new project into production. We are already in discussion with a number of parties about vending the Cobar plant into a new project, I am confident there will be others for us to consider in the not too distant future."

"Current market conditions make financing of projects much more difficult and the last thing we want to do is dilute existing shareholders by issuing new equity at current prices to raise cash. With cash reserves of more than A$55 million, and the Andorinhas gold mine ramping up to full production, we are well placed to pursue new growth opportunities."

 

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