RE: Paf interview18 Sep 2023 23:22
Ravenswood Gold Mine from CAG to the Buyer.
Transaction consideration comprises total cash payments to Resolute of up to A$300 million as follows:
• A$100 million of immediate value paid on Financial Close, represented by:
o A$50 million of cash; and
o A$50 million in a Promissory Note;
• Up to A$50 million via a Gold Price Contingent Payment instrument; and
• Up to A$150 million via an Upside Sharing Payment instrument.
Promissory Note (A$50 million)
• Quantum: A$50 million to be paid in cash to Resolute at maturity.
• Interest Rate: Annual coupon of 6% to be capitalised and paid to Resolute at maturity.
• Maturity: Matures at the earlier of a Liquidity Event (defined as disposal, IPO or winding up) with a maximum term of seven years.
• Security: May be taken on a subordinated basis in conjunction with project financing to senior lenders.
• Distributions: Any equity distributions by the Buyer matched by equivalent repayment of the Promissory Note until such time as the Promissory Note has been repaid.
Gold Price Contingent Payment Instrument (up to A$50 million)
• Gold Price Bands: A Gold Price Contingent Payment is payable to Resolute four years following Financial Close based on the following bands:
o A$10 million if the average gold price is greater than A$1,900/oz;
o A$20 million if the average gold price is greater than A$1,975/oz;
o A$30 million if the average gold price is greater than A$2,050/oz;
o A$40 million if the average gold price is greater than A$2,075/oz; and
o A$50 million if the average gold price is greater than A$2,100/oz.
• Production Threshold: Payment of the Gold Price Contingent Payment is subject to the cumulative ounces produced from Ravenswood following Financial Close exceeding 500,000oz of gold over the four-year period and is subject to adjustment if the production plan adopted by the Buyer is reduced or lower than expected.
Upside Sharing Payment Instrument (up to A$150 million)
• Objective: The Upside Sharing Payment is designed to align Resolute with investment outcomes of EMR Fund.
• Trigger: Any Liquidity Event including disposal or a qualifying IPO.
• Method: Determined by reference to the gross money multiple to EMR Fund which is the gross proceeds (before payment of the Upside Sharing Payment) divided by the total capital invested in the acquisition, development and operation of Ravenswood by EMR Fund.
• Quantum: Resolute will receive the Upside Sharing Payment from the Buyer based on the amount by which the gross money multiple exceeds a minimum threshold up to a cap of A$150 million as follows:
o A$7.5 million for each 0.1 that the gross money multiple is above 2.5 up to 4.0; and
o A$5 million for each 0.1 that the gross money multiple is above 4.0.
Conditions Precedent to Financial Close
• Approval from Australia's Foreign Investment Review Boar
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