VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/14/13 -- Formation Metals Inc. (TSX: FCO) ("Formation" or the "Company") announced on June 6, 2013, that it had entered into a binding Letter Agreement to sell, for US$9.0 million in cash, its Sunshine Precious Metals refinery, copper refinery and certain lands at the Big Creek Hydrometallurgical Complex (the "Complex") in Shoshone County, Idaho, to certain entities that are associated or affiliated with Waterton Global Resource Management, Inc. ("Waterton").
On June 10, 2013, Dundee Corporation ("Dundee") issued a press release which disclosed certain opinions of Dundee in respect of the sale of the Complex to Waterton and the upcoming Annual General and Special Meeting of the Company. On June 13, 2013, Dundee filed a Petition in the Supreme Court of British Columbia against the Company, its directors and Waterton seeking to obtain a determination that the sale by the Company of the Complex to Waterton is a sale of all or substantially all of Formation's undertaking subject to approval of the Company's shareholders, under the Business Corporations Act (British Columbia), to obtain injunctions restraining the Company and Waterton from proceeding with the sale pending determination of that issue and seeking leave to commence a derivative proceeding against the directors of the Company based on allegations of breach of fiduciary duty. The Court has set Dundee's claim for an interlocutory injunction and leave to commence the derivative action for hearing on June 19, 2013.
The Company considers the allegations made by Dundee publicly and in its Petition to be without merit, to be designed to disrupt the business of the Company and to be brought for collateral purposes related to Dundee's previously announced intention to contest the election of directors at the upcoming Annual General and Special Meeting of the Company on June 21, 2013. The claims will be vigorously opposed.
The Letter Agreement was the result of several months of negotiation with Waterton. As set out in the Company's June 6, 2013 press release, the sale is subject to confirmatory due diligence, regulatory approval and the execution of a definitive acquisition agreement by June 20, 2013. It was also announced that Cormark Securities Inc. has been engaged to provide a fairness opinion on the transaction to the Company. The anticipated closing date for the proposed sale was determined based on the time estimated by the parties required to satisfy closing conditions, taking into account that Waterton had already performed its initial due diligence over the previous months.
As previously reported, the sale of the Complex is not expected to have an adverse impact on the future development of the Idaho Cobalt Project ("ICP") and will in fact enhance the Company's ability to advance the ICP. The Company concluded last year that a standalone facility would be better suited to process concentrate from the ICP rather than a retro-fit of the existing Complex. The standalone facility can be relocated nearby where the Company holds an additional 16 acres of industrial zoned private land. This also affords the opportunity for Management to consider the relocation of the standalone facility to a location closer to the ICP Minesite, and/or a railhead, which would have a positive impact on future operational expenditures for the ICP. In connection with the sale, the Company will retain all cobalt related data, engineering drawings and plans, along with the cobalt electrowinning cells, which will be moved to the new location.
Most Popular Stories
- Networks Vie for U.S. Hispanic TV Viewers
- Ad Counts Rise in 2013 for Hispanic Magazines
- 2014 World Cup Official Noisemakers Quieter than Vuvuzelas
- Saab Gets Back into the Game; U.S. Auto Sales Soar
- Dell Offers Undisclosed Number of Employee Buyouts
- Authorities Close to Deal with JPMorgan Chase over Madoff Response
- Apple Activates Customer-Tracking iBeacon
- 2013 Tech Gift Guide: iPad Mini Still Hot; Chromecast a Great Low-Cost Option
- A Biography of Jonathan Ive, Apple's Creative Chief
- Top Websites for U.S. Hispanics