Dentons advises Saturn on $600 million acquisition of Saskatchewan oil assets

Deal: Saturn to acquire Saskatchewan oil assets for $600 million

Value: $600 million

Dentons Canada is serving as legal counsel to Saturn Oil & Gas in its acquisition of two oil assets in southern Saskatchewan in a deal valued at approximately $600 million. Also in this week’s deals roundup are Torys, BLG, Gowlings, Cassels, and DuMoulin Black assisting in energy and mining sector deals.

Saturn to acquire Saskatchewan oil assets for $600 million

Saturn Oil & Gas Inc. has agreed to acquire two oil assets in southern Saskatchewan, the Battrum area assets in Southwest Saskatchewan and the Flat Lake area assets in Southeast Saskatchewan, from Crescent Point Energy Corp. in a deal valued at approximately $600 million.

In connection with the acquisition, Saturn has secured a US$625 million debt commitment from Goldman Sachs, which will replace Saturn’s existing senior secured term loan facility, and a $150 million reserves-based loan from the National Bank of Canada.

Dentons Canada LLP and Baker Botts LLP are serving as Canadian and US legal counsel, respectively, to Saturn, while Echelon Capital Markets is acting as financial advisor.

Torys LLP and Latham Watkins LLP are serving as Canadian and US legal counsel, respectively, to Goldman Sachs.

DLA Piper LLP is serving as legal counsel to the underwriters.

“The acquired assets are a perfect fit with Saturn's existing Saskatchewan operations,” said Saturn’s CEO, John Jeffrey. “The financial flexibility offered by our transformed capital structure ideally positions Saturn to efficiently develop our expansive light oil-focused assets, optimize our cost structure, and create value for our shareholders.”

The deal is expected to be completed in the late second quarter of 2024, subject to customary closing conditions.

Pan American to sell Peruvian gold mine to Zijin

Pan American Silver has agreed to sell its 100 percent interest in the La Arena gold property in Peru to Jinteng Mining in Singapore, a subsidiary of China’s Zijin Mining Group, in a deal consisting of approximately $328.3 million (US$245 million) in cash up front and an approximately $67 million (US$50 million) contingent payment.

The La Arena property, which has been in operation since 2011, comprises the La Arena gold mine and the La Arena II project.

Under the terms of the deal, Zijin will grant Pan American a life-of-mine gold net smelter return royalty of 1.5 percent on the La Arena II project.

Borden Ladner Gervais LLP partner Fred R. Pletcher is serving as Canadian legal advisor, and Rodrigo Elias & Medrano partners Oscar Benavides and Claudio Ferrero as Peruvian legal advisor, to Pan American, alongside in-house counsels Christopher Lemon, Antonio Arrascue, and Valeria Ferrero.

Gowling WLG partners France Tenaille, Brett Kagetsu and Ian MacDonald are serving as Canadian legal advisors to Zijin, while Miranda & Amado partners Alberto Delgado, Fiorella Zumaeta, and Pablo Sotomayor are acting as Peruvian legal advisors.

“With the sale of La Arena, we continue to deliver on our strategy to optimize our portfolio, following the Yamana transaction, while maintaining future upside through the retention of royalties,” said Pan American CEO and President Michael Steinmann. “Proceeds from the transaction will further strengthen our financial position and allow us to deliver on our capital allocation priorities of investing in high-quality assets, debt reduction and returning capital to our shareholders.”

The deal is anticipated to close in the third quarter of 2024.

Treasury Metals grabs spotlight through merger with Blackwolf Copper and Gold

Treasury Metals Inc. is out to gain market recognition with its proposed acquisition of Alaska-focused Blackwolf Copper and Gold and its development-stage Niblack project.

Cassels Brock & Blackwell LLP is acting as legal counsel, and Haywood Securities Inc. as financial advisor, to Treasury.

DuMoulin Black LLP is acting as legal counsel, and Fiore Management and Advisory Corp. as financial advisor, to Blackwolf.

Upon deal completion, existing Treasury and Blackwolf shareholders will own approximately 68.3 percent and 31.7 percent, respectively, of the combined company.

Treasury expects this business combination to help advance its Goliath Gold Complex (GGC) project in northwestern Ontario to production.

Treasury President and CEO Jeremy Wyeth said, “With the sponsorship of mining and capital markets leader, Frank Giustra, we will undertake a corporate strategy that continues the advanced-stage development of the GGC Project, and introduces a more aggressive exploration strategy across the new portfolio and sets the stage for heightened strategic corporate activity.”

Blackwolf CEO Morgan Lekstrom said, “Treasury has done an incredible job of advancing the GGC Project through the start of engineering and permitting, and we are optimistic that it can evolve into a major Canadian gold camp. The combined financial strength and asset portfolio gives us the capital to move into a new stage of growth in a rising gold market.”

Blackwolf’s largest shareholder Frank Giustra said, “This is a strong transaction for Blackwolf and Treasury shareholders that puts the company on the path of a buy and build strategy that I have implemented many times. We see the GGC Project as buildable and expandable on a district scale.”

The merger is anticipated to be completed by the third quarter of 2024.