Nov 22 2004
Teck Cominco Limited announced today that Teck Cominco and Marubeni Corporation have agreed to sell to Votorantim Metais their respective share interests in Refinerìa de Zinc de Cajamarquilla S.A. (“Cajamarquilla”), which owns and operates the Cajamarquilla zinc refinery in Peru. Cajamarquilla is owned as to 85% by Teck Cominco and as to 14% by Marubeni. Completion of the transaction is subject to customary conditions of closing. Closing is expected to occur prior to year end.
The aggregate purchase price for the Teck Cominco and Marubeni interests in Cajamarquilla is US$210 million, subject to adjustment for working capital. Teck Cominco will receive cash proceeds of approximately US$136 million, after repaying US$47 million of bank indebtedness related to Cajamarquilla. Teck Cominco expects to record a pre-tax gain of approximately $7 million in the fourth quarter in respect of the sale.
In each of the first five calendar years after the closing date, Votorantim will make additional payments to Teck Cominco and Marubeni of approximately US$425,000 for each 1¢ increase in the average annual LME price for zinc above US$0.454 per lb. If Votorantim commences a substantial expansion of the capacity of the Cajamarquilla refinery during the first three years following closing, it will make an additional payment to Teck Cominco and Marubeni, declining from US$15 million in year one to US$5 million in year three.
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