First Quantum Minerals Ltd. (“First Quantum”), closed a purchase and sale transaction with Eurasian Natural Resources Corporation PLC (“ENRC”) pursuant to which First Quantum sold to ENRC its residual claims and assets of the Kolwezi Tailings project, and the Frontier and Lonshi mines and related exploration interests, all located in the Katanga Province of the Democratic Republic of Congo (“DRC”) and settled all current legal matters relating to these interests for total consideration of US$1.25 billion.
The consideration comprised US$750 million in cash, which was paid on closing, together with deferred consideration of US$500 million in the form of a 3-year Promissory Note with an interest coupon of 3 per cent. The interest coupon is payable annually in arrears.
Under the terms of the transaction, ENRC acquired, with certain limited exceptions, all of First Quantum's assets and property either physically located within the DRC or relating to the operations formerly carried out by First Quantum and its subsidiaries in the DRC, through the acquisition of: Congo Mineral Developments Limited (as 65 per cent shareholder in KMT, the former developer of the Kolwezi Tailings project); Frontier SPRL (the former owner/operator of the Frontier Mine); Compagnie Minière de Sakania SPRL (the former owner/operator of the Lonshi Mine); and Adastra Offshore Ltd. (as sole shareholder of Roan Prospecting & Mining SPRL, holder of certain assets relating to the Kolwezi Tailings Project).
In connection with the transaction, First Quantum, ENRC, the DRC Government, the Congolese entities Gécamines and Sodifor, International Finance Corporation and Industrial Development Corporation of South Africa also settled all disputes relating to the companies being sold and their assets and operations in the DRC and each of First Quantum, ENRC, the DRC Government, Gécamines, Sodifor, International Finance Corporation and Industrial Development Corporation released one another of all claims and judgments relating to the foregoing or to any other matter arising in the DRC on or before the date of closing.
First Quantum was represented in this transaction by a deal team led by John Turner and Daniel Batista and including Susan Newell and Jennifer Butcher (M&A) from the Toronto office of Fasken Martineau DuMoulin LLP, with assistance from Nigel Gordon and June Paddock (corporate/commercial) and Stuart Hills (banking) from Fasken Martineau's London Office, and Christian Victory from Appleby's Grand Cayman office.
ENRC was represented by a deal team led by Vica Irani and including Denis Bandet, Etienne Dinner, Rhys Phelps, Noura Abdul-Cater (M&A and corporate/commercial) and David Fricker (banking) from the London and Paris offices of Jones Day.
Fasken Martineau DuMoulin LLP also represented First Quantum (and, in the case of the arbitration proceedings, International Finance Corporation and Industrial Development Corporation) in the arbitration and court proceedings that were settled in connection with the transaction, with a team was led by Geoffrey Cowper, assisted by Dominique Gibbens, René Cadieux and Philippe Charest-Beaudry in Montréal, Keri Gammon in Toronto, Colin Edstrom in Vancouver, and Robert Paydon in London. The Paris office of Simmons & Simmons LLP also represented FQM in connection with both the transaction and the arbitrations, with a team led by Yves Baratte and including Claudia (Sophie) Gallizioli and Sophie Da Cunha in the Paris office and Olivier Mignolet in the Brussels office.
The DRC and Gécamines were represented by the Paris-based firm Bredin Prat with a team led by José Maria Pérez and including Louis Christophe Delanoy, Tim Portwood, Raëd Fathallah as well as Andrea Pinna.
FQM was represented in the BVI proceeding by a team led by Paul Girolami, QC, of Maitland Chambers (London) assisted by Andrew Willins and Eliot Simpson of Appleby's BVI office and Ciaran Keller of Maitland Chambers. ENRC was represented by Kenneth Maclean, QC, and James Nadin of One Essex Court (London) and William Hare, Christopher Young and Robert Nader of Forbes Hare's BVI office.
The Government Relations support was provided by Dan Brock of Fasken Martineau in Toronto.