Dundee Precious Metals Completes Sale of Tsumeb Smelter
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Dundee Precious Metals Completes Sale of Tsumeb Smelter
Canadian gold mining company Dundee Precious Metals (DPM) has announced the completion of the sale of its Tsumeb smelter in Namibia to a subsidiary of China’s Sinomine Resource Group. This significant transaction, valued at $20 million (C$26.99 million) on a debt-free and cash-free basis, consists of a $5 million holdback in escrow for six months. This holdback is intended to secure DPM's indemnity obligations as stipulated under the share purchase agreement.
Details of the Transaction
The agreement between the entities was finalized in March 2024 and covers the transfer of all associated assets and liabilities. This sale involves all shares that DPM indirectly holds in Dundee Precious Metals Tsumeb Holding. The decision to divest the smelter is aimed at allowing DPM to concentrate its efforts on core business areas and growth initiatives.
Strategic Impact on DPM
David Rae, president and CEO of DPM, expressed his perspective on the deal, noting: “In line with our strategy, the Tsumeb divestiture is another step in our continued track record of creating shareholder value. I would like to extend our thanks to the Government of Namibia, Sinomine, and our former employees and stakeholders for its safe transition and continued success.”
Background on the Tsumeb Smelter
The company initially acquired the Tsumeb smelter in 2010, primarily to ensure a processing outlet for the complex concentrate produced at its Chelopech mine located in Bulgaria. The smelter is equipped to treat complex polymetallic concentrates, including those that contain higher arsenic content, reflecting its capability to manage challenging materials.
Shifts in the Smelting Market
Despite its capabilities, DPM has recognized the need to adapt to changes in the global smelting market. Due to alterations in the quality of the Chelopech concentrate and market dynamics, DPM has found it increasingly feasible to process its concentrate at various third-party facilities. These alternative options offer secure and reliable processing on favorable terms, which DPM considers beneficial for its operational efficiency.
Future Initiatives
In a parallel development, DPM agreed to acquire Canada’s Osino Resources for a valuation of $214 million in late 2023. This strategic acquisition showcases DPM's commitment to expanding its portfolio and reinforcing its position in the mining sector. The company is dedicated to seeking growth opportunities that align with its operational strengths and market potential.
Frequently Asked Questions
What is the significance of the sale of the Tsumeb smelter?
The sale allows Dundee Precious Metals to focus on its core business and growth initiatives, enhancing shareholder value.
Who acquired the Tsumeb smelter from Dundee Precious Metals?
The smelter was sold to a subsidiary of China’s Sinomine Resource Group.
How does this transaction impact Dundee Precious Metals' operations?
The divestment enables DPM to redirect its resources towards more strategic endeavors and explore alternative processing options.
When was the sale agreement signed?
The sale agreement between the parties was officially signed in March 2024.
What recent acquisition has Dundee Precious Metals announced?
DPM announced an agreement to acquire Canada’s Osino Resources for $214 million in December 2023.
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