by Greg Klein | April 2, 2014
An all-cash deal announced April 2 will turn Canada Fluorspar TSXV:CFI over to private equity firm Golden Gate Capital. Under the definitive agreement, and pending shareholder approval, Golden Gate will pay $0.35 for each Canada Fluorspar share, an 87% premium over the 20-day volume-weighted average and a 67% premium to the April 1 close. The company would then de-list. The agreement also gives Canada Fluorspar a $2-million convertible advance to fund the company prior to completing the deal.
Canada Fluorspar directors recommend the offer, which requires a two-thirds shareholder vote as well as regulatory approvals. The company has also agreed to a non-solicitation requirement, while Golden Gate has the right to match any superior proposals.
In a statement accompanying the announcement, Canada Fluorspar president/CEO Lindsay Gorrill said, “Golden Gate Capital has a vision for the St. Lawrence fluorspar project that, combined with its financial strength, will help ensure a long-term economically viable project that will benefit the town of St. Lawrence and the Burin Peninsula.” The southern Newfoundland project is a 50/50 joint venture with French chemical giant Arkema.
A pre-feasibility study released in January 2013 used a 5% discount rate to calculate a pre-tax net present value of $124 million and a 16.4% pre-tax internal rate of return. Capex came to $154 million to re-open the former mine.
In December Canada Fluorspar released a resource estimate for its 100%-held deposits outside the Newspar JV.