Vancouver-based Farallon Mining Ltd. (TSX:FAN) has plans to be acquired by a Belgian mining firm for roughly $400 million.
Farallon has entered into a support agreement with Nyrstar NV to be purchased for $0.80 per share in an all-cash bid. The sale price represents at 32% premium to the 20-day volume-weighted average share price of Farallon on the TSX.
As a result of the deal, Nyrstar will acquire Farallon’s primary asset, the G-9 zinc mine located in Guerrero state, Mexico, which began commercial production in April 2009.
Farallon sold 25,388 tonnes of zinc concentrate and approximately 10,493 tonnes of copper concentrate in the second quarter ending June 30, 2010. It reported gross sales of $39 million, up from $20 million in the same period a year earlier. It reported a net profit of just under $2 million, up from a net loss of $8 million.
Farallon’s directors, officers and largest shareholder Acuity Investment Management Inc., which represent 19% of the shares outstanding, have agreed to tender their shares to the offer, pending any superior proposal from another third party under certain circumstances.
Under the support agreement, Farallon has agreed to pay Nyrstar a $12 million termination fee in certain circumstances, including a board recommendation of any superior proposal.
Farallon’s share price range during the past week: between $0.63 and $0.67; 52-week high: $0.71; 52-week low: $0.315.