Swiss commodity trading and mining company Glencore has agreed to acquire around 17.8% stake it does not own in PolyMet Mining, at a price of $2.11 per share in cash, totalling around $73m.
The agreement builds on Glencore’s recent proposal to take-over the US-based company, which has been unanimously recommended by independent special committee.
The Special Committee was formed by PolyMet’s board of directors, to consider the transaction, along with other alternatives, and to negotiate with Glencore, if required.
The acquisition expected to be completed in the late third quarter or early fourth quarter, subject to approval by PolyMet shareholders, court approval and other conditions.
Independent Special Committee lead independent director and chair Al Hodnik said: “The necessary next step for advancement of the NewRange Copper Nickel joint venture and the development of strategic minerals vital to our economy’s clean energy transformation.
“The Special Committee strived to maximize value for our Minority Shareholders in light of the uncertain permitting environment and associated judicial outcomes as well as the likely need for further substantial financing to meet the company’s obligations to NewRange.
“We want to thank our loyal and devoted Minority Shareholders, and in particular our Minnesota stakeholders, who have supported the company for nearly two decades.”
The Swiss company currently holds 159,806,774 common shares of PolyMet, which accounts to nearly 82.19% of its total issued and outstanding common shares.
It also holds a purchase warrant, which enables it to purchase 811,190 Common Shares at an exercise price of $5.87 per common share.
If the 2019 Warrant is exercised, Glencore would hold a total of 160,617,964 common shares, representing nearly 82.26% of the issued and outstanding share capital.
PolyMet said that the transaction provides the company’s minority shareholders with an opportunity to realise an attractive cash premium for their shares with limited closing risk.
The consideration represents a 167% premium to the unaffected share price on June 30, 2023, the last day of trading before to the Glencore’s proposal to acquire PolyMet.
The transaction, which is not subject to a financing condition, is expected to provide immediate liquidity and certainty of value, and removes uncertainty and risk.
Earlier this year, PolyMet has formed the NewRange Copper Nickel joint venture (JV) with Teck Resources, in which PolyMet and Teck each hold a 50% stake.
The NorthMet and Mesaba deposits, which contain high-demand copper, nickel, cobalt and platinum group metals now come under the JV management.
