Advising on the disposal of Lynx Resources for US$402.5m
07 Nov 2017
Simmons & Simmons has advised Orion Mine Finance and Fusion Capital on the sale of Lynx Resources
International law firm Simmons & Simmons has advised Orion Mine Finance and Fusion Capital on the sale of Lynx Resources, the owner of the SASA zinc, lead and silver mine in the Republic of Macedonia, for US$402.5m to Central Asia Metals (“CAML”). The transaction was announced on 22 September and closed on 6 November. In addition to cash consideration, Orion Mine Finance has been issued with US$50m of shares in AIM listed CAML. The transaction constitutes a reverse takeover for CAML, and is funded by a combination of equity and debt financing, and included a placing, a new senior debt facility and rollover of the existing debt.
Simmons & Simmons advised Orion Mine Finance and Fusion Capital on their joint venture and original acquisition of the mine from Solway Industries in 2015, on the offtake arrangements for the project and also subsequently advised Lynx Resources on the $75m debt raise for the mine, financed by leading project finance lenders Société Générale and Investec, and Macedonian lender Ohridska Banca (which was recognised by Trade & Forfaiting Review as one of their Deal of the Year winners for 2016 and was shortlisted for the IFLR European Awards 2017 as Project Finance Deal of the Year).
This latest transaction is indicative of increased M&A activity in the mining sector in particular in relation to key base commodities and is another major project / transaction that Simmons & Simmons has recently advised upon in the resources space (in which we have been advising numerous investors, banks and project developers).
Commenting on the transaction, Energy and Natural Resources Partner, Iain Duncan, said: ‘‘We are pleased to have been working on this notable mining transaction and in particular to have advised, since 2015, on the acquisition of the asset, on project offtake arrangements, then on the project financing and now on the disposal of this highly significant project’’.
Corporate partner, Isabella Roberts also noted: "This was a complex transaction with a number of elements needing to be brought together in order to deliver it successfully, and we are very happy that we have been able to do that".
The Simmons & Simmons team was led by Iain Duncan with the corporate team, Isabella Roberts, Edward Baker, Lesley Olsen, Phoebe So, Annabel Stark, Amy Sumaria and Emma Houlden, the resources financing team, Adam Cooper, Rose-Anna Daukes, Simon Kenolty and Shu Shu Wong and our tax team, Nick Cronkshaw and Tom Brown.