Glencore Canada Corporation (“Glencore”) and Ontario Teachers’ Pension Plan (“Ontario Teachers'”) today announced the formation of BaseCore Metals LP, a 50:50 joint venture limited partnership focused on base metals streams and royalties (“BaseCore Metals”).
Under the terms of the agreements for BaseCore Metals, Glencore contributed a portfolio of selected royalties (the “Royalty Portfolio”) and Ontario Teachers’ subscribed for its interest in BaseCore Metals for cash at closing (which amount was then paid to Glencore). The value of the initial Royalty Portfolio contributed to BaseCore Metals is approximately US$300 million.
The Royalty Portfolio includes a selection of existing royalties on producing and development stage properties in North and South America, including the Antamina and Highland Valley mines as well as the Horne 5 and El Pilar projects.
BaseCore Metals will actively pursue investment opportunities, focusing primarily on base metals streams and royalties. BaseCore Metals will provide future transaction partners with deep sector expertise, operating and technical skills alongside access to capital.
Commenting on the transaction, Ivan Glasenberg, CEO of Glencore, said: “The creation of BaseCore Metals is unique in the sector and will enable us to secure further offtakes for our marketing business. We are pleased to be partnering with Ontario Teachers’ to take advantage of the significant opportunities that are expected to emerge across the sector in the coming years.”
Andrew Claerhout, Senior Managing Director, Infrastructure and Natural Resources at Ontario Teachers’ added: “This investment in BaseCore Metals and base metal streams and royalties reflects an important component of Ontario Teachers’ Natural Resources mandate to ensure attractive relative returns through exposure to commodities that are well-positioned to benefit as the world transitions to a low-carbon economy. Working with strategic operators who have an active presence in key industries is a central tenet of Ontario Teachers’ investment strategy, and we are pleased to be forming this partnership with Glencore.”
BaseCore Metals will be an independently operated entity, governed by its own board of directors. Glencore and Ontario Teachers’ will each have the right to nominate directors to the board.
Scotiabank acted as financial advisor and McCarthy Tétrault LLP acted as legal advisor to Glencore. Morgan Stanley acted as financial advisor and Stikeman Elliott LLP acted as legal advisor to Ontario Teachers’.