Skadden, Arps, Slate, Meagher & Flom LLP and affiliates regularly represents major, mid-tier and junior mining companies; investors in mining projects; and financial institutions acting as underwriters, advisers and lenders in corporate finance, M&A, joint venture and banking transactions, as well as nontransactional matters. Our clients are engaged in all segments of the industry, including exploration, development, production, smelting, refining and metal marketing, and have investments, projects and mineral properties on six continents.
Attorneys from Skadden’s capital markets, mergers and acquisitions, banking, project finance, tax, anti-corruption, international litigation and arbitration, derivative financial products, commodities and futures, and environmental practices have extensive experience with the issues facing mining companies today. The firm works with U.S. and global mining companies that prepare their mineral reserve information in accordance with SEC Industry Guide 7, as well as those that prepare their mineral reserve and resource information in accordance with Canadian National Instrument 43-101, the JORC Code, the SAMREC Code and other relevant industry codes and standards. We understand the transactional, technical and disclosure challenges that are unique to the industry (e.g., the challenges encountered by international mining companies that report measured, indicated and inferred mineral resources in their home jurisdictions while not being permitted to do so in the United States).
We have advised on mining matters worldwide, including in Australia, Bolivia, Brazil, Canada, Channel Islands, Chile, China, Czech Republic, Indonesia, Mexico, Netherlands, Peru, Poland, Russia, Sierra Leone, South Africa, United Kingdom and the United States.
Skadden attorneys regularly advise issuers, investment dealers and financial institutions in a broad range of public and private equity and debt financings for mining companies. These financings include initial public offerings; convertible, high-yield and investment-grade debt offerings; public offerings (including cross-border public offerings by Canadian mining companies under the U.S./Canada Multijurisdictional Disclosure System (MJDS)) and private placements of equity and debt securities. In particular, Skadden attorneys have extensive experience assisting international mining companies to access the U.S. and international capital markets, and to list their securities on U.S. and international securities exchanges.
Capital markets transactions include representing:
- a syndicate of underwriters led by Scotia Capital Inc. in a US$800 million cross-border public offering of common shares by Silver Wheaton Corp. (Canada), the world’s largest precious metals streaming company;
- a syndicate of underwriters led by GMP Securities L.P. and BMO Nesbitt Burns Inc. in a C$1 billion cross-border public offering of common shares of Tahoe Resources Inc. (Canada), a producer of precious metals with mineral properties in the Americas, by Goldcorp Inc. (Canada), as selling shareholder;
- Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Barclays Capital Inc. and Credit Suisse Securities (USA) LLC as joint bookrunning managers in a US$500 million Rule 144A/Regulation S offering of 4.95% senior notes due 2024 by Yamana Gold Inc., a Canadian-based gold producer with mineral properties in Brazil, Argentina, Chile, Mexico and Canada;
- Cowen and Company, LLC as sales agent in connection with a cross-border at-the-market offering of common shares of Avalon Rare Metals Inc. (Canada);
- Southern Copper Corporation, a subsidiary of Grupo México, S.A.B. de C.V., in its US$2 billion registered public offering of unsecured notes in two tranches: US$500 million of 3.875% notes due 2025 and US$1.5 billion of 5.875% notes due 2045;
- a syndicate of initial purchasers led by Citigroup Global Markets Inc. and BMO Capital Markets Corp. in a US$250 million Rule 144A/Regulation S offering of 2.875% convertible senior notes due 2033 by Silver Standard Resources Inc., a Canadian mining company with mineral properties in the United States, Argentina, Mexico and Peru;
- Newcrest Mining Limited (Australia) in a $1 billion Rule 144A/Regulation S offering of guaranteed senior notes by Newcrest Finance Ltd in two tranches: a $750 million offering of 5.45% guaranteed senior notes due 2021 and a $250 million offering of 5.75% guaranteed senior notes due 2041;
- China International Capital Corporation Hong Kong Securities Limited, Citigroup Global Markets Asia Limited and J.P. Morgan Securities (Asia Pacific) Limited as joint sponsors in the secondary listing of ordinary shares of Kazakhmys PLC (United Kingdom) on the Hong Kong Stock Exchange. Kazakhmys is a copper mining company in Kazakhstan;
- Citigroup Global Markets Asia Limited, Macquarie Capital Securities Limited, BOCOM International Securities Limited and VMS Securities Limited as joint bookrunners in the $225 million initial public offering and listing on the Hong Kong Stock Exchange of Newton Resources Ltd. (China), an iron ore mining company;
- Stillwater Mining Company, a producer of palladium and platinum, in the exit of its majority stockholder, Norimet Limited (United Kingdom), a subsidiary of Russia-based MMC Norilsk Nickel. Norimet sold its entire 49.8 million share interest in Stillwater for approximately $950 million;
- Citi and JPMorgan, as joint global coordinators and sponsors, in the $747 million initial public offering and listing on the Hong Kong Stock Exchange of Mongolian Mining Corporation. This was the first Hong Kong listing of a Mongolian-controlled company;
- Morgan Stanley & Co. Incorporated and Renaissance Securities (Cyprus) Limited as joint global coordinators in a $251 million secondary offering of preferred American Depositary Shares by Mechel OAO, a mining and metals company with operations in Russia, which was the first SEC-registered public offering of preferred shares by a Russian corporate issuer;
- Goldman Sachs International, J.P. Morgan Securities Ltd. and Morgan Stanley & Co. International plc as joint bookrunners in a €475 million high-yield offering of senior secured notes by New World Resources N.V., a leading producer of hard coal in Central Europe and the owner of the largest hard coal mining company in the Czech Republic;
- a syndicate of underwriters led by RBC Capital Markets, Morgan Stanley & Co. Incorporated, J.P. Morgan Securities Inc. and Scotia Capital Inc. in a $4 billion cross-border public offering of common shares under the MJDS (the largest public offering of common shares in Canadian history) by Barrick Gold Corporation;
- Morgan Stanley & Co. Incorporated and RBC Capital Markets as lead underwriters in a $281 million cross-border public offering of common shares by First Quantum Minerals Ltd., a Canadian mining company with operations in Zambia, Democratic Republic of Congo and Mauritania; and
- UBS Securities LLC and Morgan Stanley & Co. Incorporated as lead underwriters in a $1 billion Rule 144A/Regulation S offering of copper-linked notes by Barrick Gold Corporation.
Skadden is frequently retained by U.S. and international mining companies, financial institutions and foreign law firms to provide strategic counsel in M&A transactions. We regularly advise on the full spectrum of negotiated and contested situations, including advance preparation for prospective targets, stock sales and purchases, mergers, tender offers, asset sales and purchases, proxy contests and recapitalizations. For example, the firm has been involved in the following mergers and acquisitions:
- ASARCO LLC, a subsidiary of Grupo México S.A.B. de C.V., in its acquisition of the 25 percent stake in Silver Bell Mining L.L.C. it did not already own from Mitsui & Co., Ltd. (Japan);
- a group of Russian investors in connection with the sale of Sibuglemet Holding (Russia) and the related renegotiation of certain financing agreements;
- Lumina Copper Corp. with the U.S. securities and tax aspects of its US$433 million acquisition by First Quantum Minerals Ltd. Both companies are based in Canada;
- OAO Severstal (Russia) in connection with the US$140 million sale by its subsidiary, Canada Limited, of PBS Coals, Inc. to Corsa Coal Corp. (Canada);
- Osisko Mining Corporation in the US$851 million sale of a 50 percent stake in its mining and exploration assets to Yamana Gold, Inc. and in its subsequent US$3.3 billion joint acquisition by Yamana Gold and Agnico Eagle Mines Limited. Skadden previously represented Osisko in connection with a US$2.4 billion unsolicited bid from Goldcorp Inc. All four companies are based in Canada;
- Millhouse in connection with a proposed investment and a shareholders’ agreement regarding OAO GMK Norilsk Nickel, the world’s leading producer of nickel and palladium.
- ECU Silver Mining Inc. (Canada) in its approximately $309 million acquisition by Golden Minerals Company to create a junior miner with operations in Mexico and South America;
- Stillwater Mining Company in its $487 million acquisition of Peregrine Metals Ltd., a copper exploration company;
- TJCC Holdings Ltd. and International Mining Machinery (Hong Kong) in the $585 million sale of a 41 percent stake in International Mining to Joy Global, Inc. and in the subsequent $856 million mandatory offer by Joy Global for the remaining 59 percent stake in the company. International Mining and Joy Global are both mining equipment manufacturers; and
- Bank of America Merrill Lynch, Goldman, Sachs & Co. and RBC Dominion Securities, as financial advisors to Potash Corporation of Saskatchewan Inc., in its response to the $40 billion unsolicited offer to acquire all outstanding Potash shares by BHP Billiton Limited.
The scope and scale of mining projects often leads to joint ventures, whether between two or more mining companies or a mining company teaming with an end-user or marketing company. Skadden regularly advises clients in negotiations of joint ventures, including on issues of governance, offtake agreements with venturers, ability to call for cash or credit support from venturers and related issues of dilution, competition, conflicts of interest, duties of opportunity, and project financing. For example, the firm has been involved in these significant mining joint ventures:
- ICT Group (Russia), the principal investment arm of ICT Cyprus Limited, in its joint venture with Oleg Miserva to develop coal mining production and to export coal in Russia, including entry into acquisition and shareholders’ agreements;
- Marubeni Corporation in its acquisitions of non-controlling stakes in multibillion-dollar copper mining projects in Chile from Antofagasta plc and related joint venture agreements;
- Nafta Moskva Investment Company in its approximately $1.3 billion acquisition of a stake in Open Joint Stock Company Polyus Gold, a leading gold producer in Russia and Kazakhstan, from Interros Company, a private equity firm; and
- State Grid International Development Limited, a subsidiary of State Grid Corporation of China, a utility company and an end-user of copper, in the formation of a joint venture with Quadra Mining Limited, a mid-tier copper mining company with operations in Nevada, Arizona, Chile and Canada, to develop and operate Quadra’s Sierra Gorda project and Franke Mine in Chile and invest in other copper assets.
Skadden’s banking attorneys work with a wide range of mining companies (producers, development-stage companies and exploration-stage companies) on all types of financing transactions. In addition to representing U.S. and international mining companies in sophisticated financing transactions, we also regularly represent some of the world’s largest commercial banks, investment banks, private equity funds and other institutional lenders, investors and other financing sources. For example, the firm has been involved in the following financing transactions relating to the mining industry:
- Bank of America Merrill Lynch, Goldman Sachs and BBVA as lead arrangers of a US$340 million secured syndicated bridge loan to Hochschild Mining plc (United Kingdom) to finance its acquisition of the Peruvian assets of International Mineral Corporation. Skadden also represented Bank of America Merrill Lynch, Goldman Sachs and BBVA as lead managers in a US$350 million Rule 144A/Regulation S high-yield offering of 7.75% senior notes due 2021 by Compañía Minera Ares S.A.C. (Peru), a wholly owned subsidiary of Hochschild Mining, to refinance the bridge facility;
- Barclays Bank PLC as administrative agent in a US$545 million exit financing for Patriot Coal Corporation as part of its emergence from Chapter 11;
- Scotiabank Perú S.A.A. as sole lead arranger and administrative agent, and the syndicate of lenders in a US$100 million senior credit facility to Compañía Minera Ares S.A.C. (Peru), a wholly owned subsidiary of Hochschild Mining plc (United Kingdom);
- Americas Mining Corporation, a subsidiary of Grupo México, S.A.B. de C.V., in a US$2.1 billion senior secured credit facility;
- Bank of America Merrill Lynch as lead arranger in a US$1.1 billion secured syndicated term loan facility to Minera Frisco, S.A.B. de C.V. (Mexico) to finance the acquisition of AuRico Gold México, S.A. de C.V. from AuRico Gold Inc. (Canada);
- Credit Suisse AG in connection with its arrangement of a fully underwritten covenant-lite $5 billion senior secured term loan to Fortescue Metals Group Limited (Australia). The facility refinanced Fortescue’s existing debt and provided additional liquidity and funding certainty. At the time, the transaction was the second largest leveraged covenant-lite term loan to date, the largest institutional term loan in recent years, and the largest leveraged metals and mining term loan of all time. This transaction was named “U.S. Leveraged Loan of the Year” for 2012 by International Financing Review and “Debt Market Deal of the Year” at the 2013 ALB Australasian Law Awards; and
- Stillwater Mining Company in a new five-year $100 million senior secured revolving credit facility from Wells Fargo Capital Finance, LLC.
Skadden regularly advises mining companies on a wide range of non-transactional matters, including securities law compliance and corporate governance, taxation, U.S. and international litigation and arbitration, FCPA compliance and defense, environmental compliance and various commercial matters. For example, attorneys in Skadden’s Mining practice have advised international mining companies on various disclosure issues relating to ongoing securities law compliance and corporate governance, assisting international mining companies with matters relating to FCPA compliance and internal reviews, and defending international mining companies in connection with class action securities litigation in the United States.