UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 14, 2011

 

THOMPSON CREEK METALS COMPANY INC.

(Exact name of registrant as specified in its charter)

 

British Columbia, Canada

 

001-33783

 

98-0583591

(State or Other Jurisdiction

 

(Commission

 

(IRS Employer

of Incorporation)

 

File Number)

 

Identification No.)

 

26 West Dry Creek Circle
Suite 810
Littleton, Colorado 80120

(Address of Principal Executive Offices)

 

(303) 761-8801

Registrant’s Telephone Number, Including Area Code

 

Not Applicable

(Former name or former address, if changed since last
report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Items to be Included in this Report

 

Item 1.01                                             Entry into a Material Definitive Agreement

 

Amended and Restated Purchase and Sale Agreement

 

On December 14, 2011, Thompson Creek Metals Company Inc. (“Thompson Creek” or the “Company”) and one of its wholly-owned subsidiaries entered into an Amended and Restated Purchase and Sale Agreement (the “Amended and Restated Agreement”) with Royal Gold, Inc. (“Royal Gold”) and one of its wholly-owned subsidiaries whereby Thompson Creek, among other things, agreed to sell to Royal Gold an additional 15% of the payable gold from its Mt. Milligan copper-gold project in exchange for a total of $270 million, $112 million of which will be paid shortly after signing. Thompson Creek intends to use the proceeds from the Amended and Restated Agreement to finance a portion of the construction of the Mt. Milligan project and related costs.

 

The Amended and Restated Agreement amended and restated the Purchase and Sale Agreement by and among the Company, Royal Gold, and their respective subsidiaries dated as of October 20, 2010 (the “Original Agreement”). Under the Original Agreement, Thompson Creek agreed to sell 25% of the payable ounces of gold produced from the Mt. Milligan project to Royal Gold in exchange for a total of $311.5 million, $226.5 million of which was paid at closing. The remaining $85 million was required to be paid over the construction period of the Mt. Milligan project. The cash purchase price for the payable gold under the Original Agreement was the lesser of $400 or the prevailing market price for each payable ounce of gold until 550,000 payable ounces have been delivered to Royal Gold and the lesser of $450 or the prevailing market price for each additional payable ounce thereafter.

 

Under the Amended and Restated Agreement, Royal Gold increased its aggregate investment (including amounts previously funded under the Original Agreement and commitments for future funding) from $311.5 million to $581.5 million, and agreed to purchase a total of 40% of the payable ounces of gold produced from the Mt. Milligan project at a cash purchase price equal to the lesser of $435, with no inflation adjustment, or the prevailing market price for each payable ounce of gold (regardless of the number of payable ounces delivered to Royal Gold).

 

Three business days following the execution of the Amended and Restated Agreement, Royal Gold will make a cash payment of $112 million to Thompson Creek. Following this payment, and taking into account payments totaling $252.6 million made by Royal Gold under the Original Agreement, Royal Gold will make future scheduled payments to Thompson Creek in the aggregate amount of $216.9 million, which will be paid on a quarterly basis commencing on March 1, 2012 at the rate of $45 million per quarter in calendar year 2012 (representing an aggregate of $180 million in calendar year 2012), $12 million per quarter in the first two quarters of calendar year 2013, and $12.9 million in the third quarter of calendar year 2013 (representing an aggregate of $36.9 million in calendar year 2013).  Following the scheduled payment in the third quarter of 2013, Royal Gold will have satisfied its obligations to make quarterly payments to Thompson Creek.  Royal Gold’s obligation to make these quarterly payments is subject to the satisfaction of certain conditions included in the Amended and Restated Agreement (including that the aggregate amount of historical payments made by Royal Gold plus the applicable quarterly payment is less than the aggregate costs of developing the Mt. Milligan project incurred or accrued by Thompson Creek as of the date of the applicable quarterly payment). In the event that a quarterly payment is postponed as a result of the

 

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failure by Thompson Creek to satisfy a condition precedent, all subsequent quarterly payments will be adjusted forward one full calendar quarter until such time as all conditions precedent have been satisfied for the next scheduled quarterly payment.

 

The Amended and Restated Agreement contains representations and warranties that each party made to each other as of execution of the Amended and Restated Agreement, as well as representations and warranties that Thompson Creek and its subsidiary will make as of or immediately prior to the date that Royal Gold will make the $112 million cash payment and each date that Royal Gold makes a quarterly payment.  The assertions embodied in those representations and warranties were made or will be made solely for the purpose of the Amended and Restated Agreement, which governs the contractual rights and relationships, and allocates risks, among the parties thereto, and may be subject to important qualifications and limitations agreed to by Thompson Creek and Royal Gold in connection with negotiating their respective terms.  Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from that which may be viewed as material to stockholders. For the foregoing reasons, no person should rely on the representations and warranties made by the parties to the Amended and Restated Agreement as statements of factual information at the time they were made or otherwise.

 

Pursuant to the Amended and Restated Agreement, each of Thompson Creek and Royal Gold agreed to guarantee the performance of the obligations of its respective subsidiaries under the agreement.

 

The foregoing description of the terms of the Amended and Restated Agreement is qualified in its entirety by the Amended and Restated Agreement, which is filed herewith as Exhibit 10.1 and incorporated into this Item 1.01 by reference.

 

Thompson Creek first announced the original transaction in a press release on July 15, 2010 with respect to which it filed a Form 8-K on July 15, 2010.  Thompson Creek filed the Original Agreement as an exhibit to a Form 8-K filed on October 20, 2010.

 

Amendment to Credit Agreement.

 

On December 14, 2011, the Company executed a third amendment to its senior secured revolving credit agreement dated December 10, 2010 (the “Credit Agreement”) with the lenders named therein and JPMorgan Chase Bank, N.A., as administrative agent for the lenders.  The amendment allows the Company to enter into the Amended and Restated Agreement.  The amendment also modifies the measurement of the Company’s consolidated liquidity for purposes of the minimum consolidated liquidity test to include the amount of cash to be received in the immediately following fiscal quarter pursuant to the Amended and Restated Agreement.  The amendment also modifies the consolidated leverage ratio and consolidated interest coverage ratio thresholds included in the financial covenants.

 

A copy of the third amendment to the Credit Agreement is filed herewith as Exhibit 10.2 and incorporated into this Item 1.01 by reference.

 

Item 8.01                                             Other Events

 

On December 15, 2011, Thompson Creek issued a press release announcing the execution of the Amended and Restated Agreement and the third amendment to the Credit Agreement.  A copy of the press release is attached hereto as Exhibit 99.1 and incorporated into this Item 8.01 by reference.

 

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Item 9.01                                             Financial Statements and Exhibits

 

(d) Exhibits

 

10.1                           Amended and Restated Purchase and Sale Agreement by and among Thompson Creek Metals Company Inc., Terrane Metals Corp., Royal Gold, Inc. and RGLD Gold AG, dated as of December 14, 2011.*

 

10.2                           Third Amendment to the Credit Agreement dated December 14, 2011 by and among Thompson Creek Metals Company Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto dated December 10, 2010.

 

99.1                           Press Release dated December 15, 2011.

 


*                                         Certain portions of this exhibit have been omitted by redacting a portion of the text (indicated by asterisks in the text). This exhibit has been filed separately with the U.S. Securities and Exchange Commission pursuant to a request for confidential treatment.

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

THOMPSON CREEK METALS COMPANY INC.

 

 

 

 

 

By:

/s/ Wendy Cassity

Date: December 15, 2011

Name:

Wendy Cassity

 

Title:

Vice President, General Counsel and Secretary

 

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Exhibit Index

 

Exhibit No.

 

10.1                           Amended and Restated Purchase and Sale Agreement by and among Thompson Creek Metals Company Inc., Terrane Metals Corp., Royal Gold, Inc. and RGLD Gold AG, dated as of December 14, 2011.*

 

10.2                           Third Amendment to the Credit Agreement dated December 14, 2011 by and among Thompson Creek Metals Company Inc., JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders party thereto dated December 10, 2010.

 

99.1                           Press Release dated December 15, 2011.

 


*                                         Certain portions of this exhibit have been omitted by redacting a portion of the text (indicated by asterisks in the text). This exhibit has been filed separately with the U.S. Securities and Exchange Commission pursuant to a request for confidential treatment.

 

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