OZ Minerals has signed a sale implementation agreement with China Minmetals, officially finalising a deal first announced on April 1st.
The US$1.2 billion deal excludes OZ Minerals’ Prominent Hill mine in South Australia and its Martabe gold-silver project in Indonesia after Treasurer Wayne Swan blocked any deal involving Prominent Hill on the grounds of national security.
The deal will allow OZ to get out from under the $1.3 billion of debt it has been struggling to repay since late 2008, while maintaining ownership of its two most prized assets.
“This transaction will provide a complete solution to our financing issues and see shareholders retain their OZ Minerals shares and therefore exposure to the Prominent Hill operation and its long-term growth profile,” OZ Minerals managing director and CEO Andrew Michelmore said.
The transaction will see the sale by OZ Minerals of Sepon, Golden Grove, Century, Rosebery, Avebury, Dugald River, High Lake, Izok Lake and certain other exploration and development assets to Minmetals.
Once the deal is completed and all debts are paid, OZ Minerals expects to retain a cash balance of approximately $500 million.