Narrative
Full Description
Project narrative
On August 31, 2018, China Construction Bank Corporation (“CCBC”) issued a binding commitment letter in which it agreed to fully underwrite a $870,000,000 (approximately C$1.1 billion) loan to Gold Mountains (H.K.) International Mining Company Limited — a wholly-owned subsidiary of Zijin Mining — to facilitate the acquisition of a 55% ownership stake in Canada-based Nevsun Resources Ltd. The loan was intended to carry a 5-year maturity and an interest rate of LIBOR plus an unknown margin, but was further syndicated and finalized the following year. Also on August 31, 2018, Bank of China Limited committed to provide a credit facility worth up to $660,000,000 (approximately C$834 million) to Zijin Mining to facilitate the acquisition of a 55% ownership stake in Nevsun Resources Ltd (captured via Record ID#89502). On January 9, 2019, Chinese-lender majority eleven-lender syndicate entered into a $840 million loan agreement with Gold Mountains HK International Mining Co. Ltd. for the Nevsun acquisition. The loan had a maturity date of five (5) years, although the other terms as well as the specific amounts contributed by each member of the syndicate are unknown. The loan was guaranteed by Zijin Mining Group Co. Ltd. China Construction Bank (Record ID #93637), through its Fujian branch, acted as Coordinator, Mandated Lead Arranger, Bookrunner, and Security Agent with support from its Hong Kong branch. China CITIC Bank (Record ID #93820), Industrial and Commercial Bank of China (ICBC) (Record ID #93821), and the Bank of China's (BoC) Macau branch (Record ID #93822) also acted as Mandated Lead Arrangers. Agricultural Bank of China (ABC), Hong Kong branch (Record ID #93823), China Development Bank (CDB), Hong Kong branch (Record ID #93827), Credit Agricole, the Export-Import Bank of China (Record ID #93826), China Everbright Bank (Record ID #93824), China Minsheng Banking Corp Ltd (CMBC), and the Postal Saving Bank of China (PSBC) (Record ID #93825) acted as Lead Arrangers. On March 12, 2019, Zijin Mining Group Co. Ltd. completed a full acquisition of Nevsun Resources Ltd., which holds an ownership interest in the Timok Project, a high-grade copper-gold development project in Serbia, its Bisha zinc-copper mine in Eritrea, and additional exploration licences and permits in Serbia, Macedonia, and the Bisha mining district. The transaction was one of the landmark 'Belt and Road' mergers and acquisitions deals of 2018, being the largest takeover in the history of the Zijin Mining Group Co. Ltd. at that time. The two principal properties of Nevsun Resources Ltd. were the Timok Project in Serbia, which hosts the copper-gold Cukaru Peki deposit on the Brestovac-Metovnica exploration permit, and the Bisha Project in Eritrea, which hosts the copper-zinc-gold Bisha deposit and includes potential satellite VMS deposits at Harena, Northwest, Hambok and Asheli.
Staff comments
1. Nevsun Resources Ltd. was incorporated under the laws of the Province of British Columbia under the Companies Act (British Columbia) on July 19, 1965 under the name “Hogan Mines Ltd.” Since then, it has undergone four name changes, the last of which occurred on December 19, 1991 when it adopted its current name (Nevsun Resources Ltd.). Nevsun Resources Ltd.’s head office is located at 1750 - 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X1 and its registered and records office is located at 2600 - 595 Burrard Street, Vancouver, British Columbia, V7X 1L3. 2. On August 8, 2018 (Beijing Time), Zijin Mining issued a takeover offer proposal to Nevsun. After friendly negotiations between the two parties, Nevsun’s board of directors (“Nevsun’s Board”) consented to support the takeover offer. On September 5, 2018 (Beijing Time), Zijin Mining entered into the Pre-Acquisition Agreement with Nevsun and a Lock-up Agreement with Nevsun’s directors and executive officers. Zijin Mining proposed to make an all cash takeover to acquire all of the Nevsun’s issued common shares which was approximately 302,592,672 common shares (of which, 3,197,191 Nevsun’s common shares were held by Zijin Global Fund, which were managed by a subsidiary of Zijin Mining) and any other common shares that were issued after the date of the offer (including any but prior to the expiry time). The offer price represented a premium of 21% over the closing price of the Nevsun’s common shares on the previous trading day. The total amount of the consideration was approximately CAD $1,839,016,284 (based on the current number of issued common shares and options of Nevsun, assuming all of the options are exercised; excluding the common shares held by Zijin Global Fund), approximately equivalent to RMB 9,530,150,187 or $1.39 billion. 3. On April 30, 2019, Nevsun Resources (Eritrea) Ltd. (“Nevsun Eritrea”), a subsidiary of Nevsun Resources Ltd., entered into an equity transfer agreement with Eritrean National Mining Corporation and Bisha Mining Share Company (BMSC). Nevsun Eritrea transferred its 5% equity interest in Bisha to Eritrean National Mining Corporation at a consideration of $10 million. The registration change of this equity transfer was completed on May 30, 2019. Nevsun Resources Ltd. subsequently owned a 55% equity interest in BMSC through Nevsun Eritrea, while Eritrean National Mining Corporation owned a 45% equity interest in BMSC. 4. Nevsun Resources Ltd. is sometimes referred to as "耐森资源公司有限" in Chinese.