Dec 20 Triple Flag, a new mining financing firm
backed by U.S. hedge fund Elliott Management Corp, said on
Tuesday it would pay $250 million to buy future silver
production from a mine in Peru owned by Peruvian miner Compañía
Toronto-based Triple Flag, a 7-month-old company founded by
former Barrick Gold chief financial officer Shaun
Usmar, said it would buy the silver "stream" from Milpo's Cerro
Lindo poly-metallic zinc mine. It is Triple Flag's first deal.
In streaming transactions, mining finance companies such as
Triple Flag provide miners with funds upfront in exchange for a
portion of the future output - often a byproduct - from a mine
at a set discounted price.
This type of financing became especially popular during a
mining sector downturn in recent years when debt-laden miners
did not want to tap the equity markets for finance at a time
when their share prices were weak.
Triple Flag said in a statement it would pay 10 percent of
the spot silver price for each ounce of silver it got from the
mine. Silver delivery would start next month.
Cerro Lindo, a low-cost, long-life mine that started
operations in 2007, is one of the world's 10 largest zinc mines.
Milpo is a unit of VM Holdings S.A., the metals and mining
business of Votorantim S.A, a large, private Brazilian
conglomerate with interests in a variety of sectors including
cement, energy and orange juice.
(Reporting by Nicole Mordant in Vancouver; Editing by Bill