Centerra Gold to acquire Thompson Creek solely for Centerra shares

Centerra Gold is proposing to acquire all of the shares of Thompson Creek under a B.C. Plan of Arrangement in consideration solely for Centerra shares, with the acquired shares contributed immediately to a new holding subsidiary of Centerra. As there is no nominal cash or other non-share consideration, the Thompson Creek shareholders are not required to file an election form in order to receive rollover treatment - so that Centerra will have lower basis in the acquired shares. The U.S. tax disclosure indicates that the exchange is expected to be a “B” reorg (which requires that the sole consideration be shares).

The exchange ratio (resulting in the Thompson Creek shareholders holding only 8% of Centerra) reflects that Thompson Creek has U.S.$673 million of deferred revenue obligations under a gold stream arrangement for its B.C. mine, as well as U.S.$823 million of long-term debt. Centerra has renegotiated the gold stream arrangement to reduce the gold delivery obligation and create a copper delivery obligation.

Neal Armstrong. Summary of Thompson Creek Circular under Mergers & Acquisitions – Mergers – Share-for-Share.