The Springfield Joint Venture Projects are located approximately 150km north-east of Meekatharra in the northern Murchison Goldfields region of Western Australia.
Proposed sale of Interest in the Springfield Joint Venture
On 8 August 2018 Talisman announced that it had signed a conditional Share Sale Agreement with Sandfire Resources NL (Sandfire), its partner in the Monty Mining Joint Venture and Springfield Exploration Joint Venture (collectively the Springfield JV), for Sandfire to acquire Talisman A Pty Ltd (Talisman A) (Proposed Transaction), the subsidiary which holds Talisman’s 30% interest in the Springfield JV (Share Sale Agreement).
Key terms of the Share Sale Agreement include:
At completion of the Proposed Transaction, Talisman is to receive net cash from Sandfire equal to A$72.3 million less the amounts to be paid at completion of the Proposed Transaction to Taurus (the Talisman group financier) by Sandfire on behalf of:
- Talisman A, to repay debt owed at completion by Talisman A (to the extent Talisman A's cash reserves at completion are insufficient) under the Taurus loan facility (Loan Facility); and
- Talisman, equal to the amount owed at completion by Talisman under the Taurus working capital facility announced on 28 June 2018 (Working Capital Facility).
The current drawn amount of the Loan Facility is US$11.5 million and the current drawn amount of the Working Capital Facility is US$1.5 million, which may vary prior to completion.
- Sandfire will assume, via its acquisition of Talisman A, an amended form of the existing 2.25% gross revenue royalty held by Taurus over Talisman’s 30% share of Monty.
- Talisman A’s budgeted capital contributions to the Springfield JV, including for Monty development, are being funded by Sandfire for the period from 5 June 2018, but must be repaid to Sandfire if the Proposed Transaction does not complete.
Talisman, Talisman A and Sandfire have also executed a NSR Royalty Deed(NSR Royalty Deed) pursuant to which Talisman A grants to Talisman an uncapped and perpetual 1.0% Net Smelter Return (NSR) Royalty applying to 100% of all contained copper and gold in ore mined and sold from within the Springfield JV mining area above the respective contained metal levels in the current Monty Mine Plan (based on the Monty Feasibility Study released in April 2017)(NSR Royalty).
Condition precedent to Proposed Transaction
The Proposed Transaction is conditional on Talisman shareholders approving the Proposed Transaction at a planned Talisman shareholder meeting on 4 October 2018 for the purpose of ASX Listing Rule 11.2 (Condition).
Investors should be aware that even if the Condition is satisfied, completion of the Proposed Transaction will not occur unless various interrelated actions also occur simultaneously. These actions include certain actions by Taurus, such as releases in relation to the Loan Facility and Working Capital Facility, which are to be provided by Taurus when those facilities are repaid at completion of the Proposed Transaction.
Key termination events under the Share Sale Agreement are contained in Talisman’s ASX announcement dated 8 August 2018.