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Glencore, Canadian pension fund forge base metals streams, royalties JV

Glencore Plc and Ontario Teachers' Pension Plan created a 50/50 joint venture focused on base metals streams and royalties named BaseCore Metals LP.

The proposed joint venture was flagged by media outlets in November.

Under the deal announced Dec. 5, Glencore contributed an initial portfolio of royalties in the joint venture, while the Canadian fund subscribed for its stake in BaseCore Metals by paying Glencore in cash.

The value of the initial royalty portfolio was about US$300 million and comprises existing royalties on producing and development-stage properties in North and South America, including the Antamina copper project in Peru, the Highland Valley mines in British Columbia and the Horne 5 and El Pilar gold projects.

Glencore CEO Ivan Glasenberg said, "The creation of BaseCore Metals is unique in the sector and will enable us to secure further offtakes for our marketing business."

BaseCore Metals will be an independently operated entity governed by its own board of directors, with Glencore and Ontario Teachers' holding the right to nominate directors to its board.

Scotiabank acted as financial advisor and McCarthy Tétrault LLP acted as legal advisor to Glencore. Morgan Stanley acted as financial advisor and Stikeman Elliott LLP acted as legal advisor to Ontario Teachers', according to the release.