Would so-called Party B been a better buyer for Thompson Creek Metals? – by Barry Critchley (Financial Post – September 29, 2016)


Let’s hope the directors at Thompson Creek Metals — a company with interests in copper, gold and molybdenum and whose shares were delisted from the NYSE this year — made the right decision.

In three weeks, shareholders will give their opinion on the takeover by Centerra Gold, the largest Western-based gold producer in Kyrgyzstan. Centerra is offering paper to Thompson Creek (TC) shareholders.

Centerra also raised $195 million via an offering of $7.35 installment receipts, the proceeds of which will be used to help repay two maturing TC debt issues. TC’s debt holders will be made whole in the transaction, which was announced in July and will wrap next month. But TC’s equity holders may not be so lucky. They will end up with a minority stake in Centerra, whose main asset is the Kumtor mine in the Kyrgyz Republic.

And a review of Centerra’s latest MD&A indicates that things are far from perfect. In all, five pages of that 44 page document released in late July — a few weeks after the deal with Thompson Creek was announced — were devoted to matters in the Kyrgyz Republic.
Readers learn about a notice of arbitration involving environmental claims (a US$220 million judgment against the gold mine is now under appeal); how the gold mine is under an interim order not to pay dividends and of how the mine is not allowed to pay any cash to Centerra; and about plans “seeking to unwind” a US$200 million inter-corporate dividend paid to Centerra in late 2013.

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