Dundee Precious Metals (DPM), a Canadian gold mining company, has struck a deal to sell the Tsumeb smelter in Namibia to a subsidiary of China’s Sinomine Resource Group for $49m (352.27m yuan) in cash.
DPM signed a definitive share purchase agreement, under which it agreed to transfer all its interest in the Tsumeb smelter.
This transaction includes all associated assets and liabilities through the sale of all shares DPM indirectly holds in Dundee Precious Metals Tsumeb Holding.
In addition to the sale price, DPM is set to receive all cash collected from IXM related to a positive balance in metals exposure at Tsumeb, currently estimated at approximately $17.2m.This will effectively raise the purchase price.
The completion of the deal is subject to standard closing conditions including approval under the Namibia Competition Act and the necessary consents from Chinese regulatory authorities for overseas investments.
It is expected to be finalised in the third quarter of 2024.
DPM plans to utilise the proceeds from the sale to reinforce its balance sheet and support its primary mining operations, adhering to its disciplined capital allocation strategy.
The company acquired the smelter in 2010 to ensure a processing outlet for the complex concentrate produced by its Chelopech mine in Bulgaria.
However, due to shifts in the global smelting market and alterations in the quality of the Chelopech concentrate, DPM has found it feasible to process its concentrate at various other third-party facilities.
These alternatives offer secure and reliable processing options on favourable terms, the company noted.
DPM president and CEO David Rae said: “We are pleased to announce the sale of the Tsumeb smelter, which is consistent with our strategic objective of focusing on our gold mining assets and simplifying our portfolio going forward.
“We are extremely proud of the investments that we have made to transform Tsumeb’s operational and environmental performance into a specialised custom smelter with a highly skilled workforce.”
In December 2023, DPM agreed to acquire Canada’s Osino Resources for $214m (C$287m).
