Centerra Gold will acquire Thompson Creek Metals Company in a deal having a transaction value, including the assumption of capital lease obligations, of $1.1 billion.

Thompson Creek operates the Mount Milligan Mine in British Columbia, Canada, a low-cost asset with more than two additional decades of profitable production expected from the current reserve base.

The proposed redemption of Thompson Creek’s 9.75% secured notes due in 2017, the 7.375% unsecured notes due in 2018, and the 12.5% unsecured notes due in 2019 is expected to be financed with a combination of a new $325 million senior secured revolver and term loan facility provided by Scotiabank, a C$170 million bought deal subscription receipt offering and cash on hand at Centerra and Thompson Creek.

Credit Suisse Securities (Canada) acted as financial advisor to Centerra and Stikeman Elliott, Weil, Gotshal & Manges and Holland & Hart acted as Centerra’s legal advisors. Cormark Securities provided a fairness opinion to the Centerra board of directors. BMO Capital Markets and Moelis & Company acted as financial advisors to Thompson Creek. BMO Capital Markets provided a fairness opinion to the Thompson Creek board of directors. Cassels Brock & Blackwell, Perkins Coie and Gibson, Dunn & Crutcher acted as Thompson Creek’s legal advisors.