Business & Finance
Business and Finance
Business and Finance
Mon, July 20, 2009
Fri, July 17, 2009 Consolidated Thompson Iron Mines Limited: Consolidated Thompson Receives China Government Approvals for WISCO Strategic Investm
TORONTO, ONTARIO--(Marketwire - July 17, 2009) - Consolidated Thompson Iron Mines Limited (TSX:CLM) ("CLM" or the "Company") is pleased to announce that Wuhan Iron and Steel (Group) Corporation ("WISCO") has received the necessary approvals from the China government in respect of the previously announced strategic investment of US$240 million by WISCO into CLM. Closing of the strategic investment has been scheduled for Monday, July 20, 2009.
The Strategic Investment
WISCO has agreed to subscribe for 38,681,023 common shares of the Company at a price of C$2.72 per share for an aggregate subscription price of C$105,212,382.56, which shares represent 19.99% of the issued and outstanding CLM shares post-transaction. In connection with this subscription, WISCO will be entitled to nominate a director to the Board of CLM. In addition, CLM has granted WISCO a pre-emptive right to maintain its proportionate interest in CLM in certain circumstances.
CLM and WISCO will establish a limited partnership, of which WISCO will hold a 25% interest, and to which CLM will contribute the Bloom Lake property. WISCO will contribute the balance of the previously announced US$240 million investment, after the payment for the common shares of CLM, to the limited partnership in exchange for its interest therein. CLM will be the manager of the Bloom Lake project and, once Bloom Lake is in commercial production, CLM will receive a management fee on a per tonne basis. WISCO is entitled to a minimum annual distribution from the partnership equal to not less than the profits from the annual sale of 1.6 million tonnes of iron ore concentrate.
Under an offtake agreement with the limited partnership, WISCO will be obligated to purchase, at fair market value, a percentage of iron ore production during each year of the life of the Bloom Lake project that is no less than its percentage interest in the limited partnership. WISCO will also be entitled, upon certain conditions, to other long-term off take rights to purchase, at fair market value, both additional amounts of initial production and amounts resulting from future expansion of the Bloom Lake project, as well as from CLM's Lamelee and Peppler Lake projects.
About Consolidated Thompson Iron Mines Limited
Consolidated Thompson Iron Mines Limited is an exploration and development mining company. The Company believes that its updated positive Feasibility Study, based on the current understanding of the quality and size of the Bloom Lake deposit, reflects the potential to expand and advance the project and exploit other opportunities in the iron ore industry. The Company has approximately 155.0 million shares outstanding and trades on the TSX under the symbol "CLM".
Forward-Looking Information
Except for statements of historical fact relating to the Company, certain information contained herein constitutes ''forward-looking information'' under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the terms of the agreement; receipt of all necessary approvals; the negotiation and execution of the definitive agreements; benefits from the agreement; capital required to complete the development of the Bloom Lake mine and the timing of such requirements; the conclusions, parameters and assumptions underlying current mine plans, the development potential and timetable of Bloom Lake project; capital and operating expenditures; iron ore prices; permitting time lines and permitting; government regulation of mining operations; environmental risks and the impact of management appointments. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Estimates regarding the anticipated timing, amount and cost of mining at the Bloom Lake Project are based on assumptions underlying mineral reserve and mineral resource estimates and the realization of such estimates as are set out in CLM's feasibility study. Capital and operating cost estimates are based on extensive research of the Company, purchase orders placed by the Company to date, recent estimates of construction and mining costs and other factors that are set out in CLM's feasibility study. Production estimates are based on mine plans and production schedules, which have been developed by the Company's personnel and independent consultants. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Consolidated Thompson to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks described in the annual information form of the Company posted under the profile of the Company on SEDAR at [ www.sedar.com ]. Although management of Consolidated Thompson has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Consolidated Thompson does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
