Cyanco is a US-based manufacturer and distributor of sodium cyanide, which is required for gold processing, and the company has production facilities located near the Nevada gold mining region and seaborne export market
Orica House, the company headquarters. (Credit: Easel3 at English Wikipedia)
Australian chemicals company Orica has agreed to fully acquire Cyanco Intermediate (Cyanco) from an affiliate of Cerberus Capital Management for a total of $640m.
Cyanco is a US-based manufacturer and distributor of sodium cyanide primarily serving the gold mining industries in the US, Canada, Mexico, Latin America, and Africa.
The proposed acquisition is expected to complement Orica’s established mining chemicals business and create an integrated global manufacturing and distribution network.
The transaction is expected to be completed by the end of FY2024, subject to the expiration of certain regulatory waiting periods and other customary closing conditions.
Orica managing director and CEO Sanjeev Gandhi said: “I am delighted to announce the acquisition of Cyanco today, accelerating the delivery of Orica’s Mining Chemicals strategy and creating a leading global mining chemicals business.
“Cyanco is a highly complementary business, and by combining it with our established sodium cyanide business, Orica will create a leading integrated global sodium cyanide producer with world-class supply capabilities in mining.”
Orica intends to fund the acquisition primarily from its existing cash on hand and undrawn committed debt facilities, alongside A$400m ($262m) underwritten institutional placement.
In addition, the company will also undertake an additional non-underwritten share purchase plan capped at A$65m ($42.5m) to enable retail investor participation.
Cyanco provides sodium cyanide, which is required for gold processing, with production facilities located near the Nevada gold mining region and seaborne export market.
The company has an attractive financial profile and strong cash flow generation, with a strong commercial discipline embedded in its business model.
Orica said it will incorporate Cyanco’s greenhouse gas emissions profile into its global Scope 1, 2 and 3 inventory and is committed to delivering its existing public climate change targets.
Sanjeev added: “The Acquisition will more than double Orica’s existing sodium cyanide production capacity and provide us with the ability to cater to the highly attractive US and Canadian gold mining industries.
“By combining these two leading businesses, we expect to improve our ability to serve our customers by enhancing Orica’s global network of transfer stations in key gold mining regions, supporting security of supply to mine sites.
“The Acquisition is mutually beneficial to both Cyanco and Orica stakeholders, and we look forward to welcoming Cyanco’s employees to Orica. We are excited about the opportunities this will create for Orica, our customers, and our shareholders.”