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Franco-Nevada to buy Glencore precious metals stream for $500 million

Published 2016-02-10, 05:41 p/m
© Reuters. Franco-Nevada to buy Glencore precious metals stream for $500 million
GLEN
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FNV
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TORONTO, Feb 10 (Reuters) - Toronto-based Franco-Nevada
FNV.TO has agreed to acquire a precious metal stream in
southern Peru from Glencore (L:GLEN) for $500 million and arranged a $550
million financing to fund the deal, it said on Wednesday.
Franco-Nevada's President and Chief Executive David Harquail
said the acquisition would further strengthen the company's
portfolio, following its recent Antamina and Candelaria
investments.
"This investment is expected to be immediately accretive and
provide our shareholders with gold price optionality over
multiple cycles and potential further exploration and expansion
upside," he said.
Franco-Nevada said it had agreed financing for the deal with
a syndicate of underwriters led by BMO Capital Markets, CIBC
Capital Markets, RBC Capital Markets and Scotiabank. The
underwriters have agreed to purchase 11.5 million Franco-Nevada
shares at $47.85 per share.
They also have an option to purchase an additional 1.725
million shares and the gross proceeds for Franco-Nevada could
rise to $663 million.
Franco-Nevada said the Glencore stream is referenced to
production from the Antapaccay mine in southern Peru, which is
owned by Glencore, and has been expanding production since late
2012.

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