Centerra closes C$195-million bought deal offering

JOHANNESBURG (miningweekly.com) – Canadian gold miner Centerra Gold has closed its previously announced C$195-million bought deal offering of subscription receipts, the net proceeds of which will be used to partially fund the redemption of the secured and unsecured notes of the Thompson Creek Metals Company, in connection with Centerra’s acquisition of Thompson Creek’s issued and outstanding common shares.

On completion of the transaction, existing Centerra and Thompson Creek shareholders are expected to own about 92% and 8% of the pro forma company, respectively, on a fully diluted in-the-money basis. The company expects the transaction to close by the end of the third quarter.

Earlier this month, Centerra entered into an agreement with BMO Capital Markets, Credit Suisse Securities Canada and Scotiabank, under which they agreed to purchase about 23-million subscription receipts from Centerra at a price of C$7.35 a subscription receipt.

Effective at the closing, the underwriters exercised in full their overallotment option to acquire an additional three-million receipts, which meant that a total of about 27-million subscription receipts were issued for total gross proceeds of about C$196-million.

Each subscription receipt represents the right of the holder to receive, upon closing of the transaction, without payment of additional consideration or further action, one common share of the company, plus an amount equal to the amount per common share of any cash dividends for which a record date has occurred on or after the closing of the offering, and before the date on which common shares underlying the subscription receipts are issued or deemed to be issued.

The deadline for the transaction is December 31. However, if the deadline is not met or is terminated, holders of subscription receipts will receive the full purchase price of their subscription receipts, together with their pro rata portion of interest earned or deemed to be earned on the gross proceeds of the offering.

The subscription receipts, which were offered by way of a short form prospectus in all of the provinces and territories of Canada, except Quebec, and were also offered by way of private placement in the US, commenced trading on the TSX on Wednesday.