Liberty Gold Corp. reports signing a share purchase agreement (the “Agreement”) for the sale of its interest in the Halilağa copper gold porphyry deposit (“Halilağa” or “the Project”), situated in Biga Province, northwest Turkey, to Cengiz Holdings A.Ș. (“Cengiz”).
In accordance with the terms of the Agreement, Liberty Gold and its joint venture partner, Teck Madencilik Sanayi Ticaret A.Ș. (“Teck”), a subsidiary of Teck Resources Limited, have decided to jointly sell their 100% interest in the company that holds the Project to Cengiz for US$55 million cash, to be paid in three phases spread across a two-year period. The consideration will be apportioned 60% to Teck and 40% to Liberty Gold, pro-rata to their ownership interests.
Cengiz will acquire the Project by buying the shares in a Turkish corporation held by Teck and Liberty Gold (the “Transaction”). As an outcome of the Transaction, Liberty Gold will receive a total of US$22 million.
Cengiz is active in the fields of mining, energy, construction, metallurgy, and the chemicals/fertilizer sectors. It started its initial activities in the late 1970s in construction, and is at present one of Turkey’s leading groups with over 12 main companies, 96,000 employees, and a yearly turnover of US$6 billion.
As a part of Cengiz’s mining and metallurgy operations, Cengiz’s subsidiaries Eti Bakir A.Ș. and Eti Aluminyum A.Ș. own and run aluminum, copper, phosphate, antimony, and coal mines across Turkey and the Seydisehir Aluminum Electrolysis facility, Samsun Cathode Copper Smelter facility, and Mazidagi Fertilizer and Metal recovery plants.
Terms of the Agreement
Closing of the Transaction is conditional on customary conditions including the consent of the Turkish Ministry of Energy and Natural Resources (the “Ministry”).
The US$55 million purchase price will be paid in three phases as follows:
- US$10 million on the 1st anniversary of the closing date (US$4 million to Liberty Gold)
- US$10 million on the 2nd anniversary of the closing date (US$4 million to Liberty Gold)
- US$35 million on the closing date (US$14 million to Liberty Gold)