CALGARY, ALBERTA–(Marketwired – Oct. 5, 2015) – New Millennium Iron Corp. (“NML” or the “Company”) (TSX:NML) (OTCQX:NWLNF) today announced that it has reached a settlement with Tata Steel Global Minerals Holdings Pte. Ltd. regarding the previously reported issue of cash calls stemming from NML’s long-term investment in Tata Steel Minerals Canada Limited (“TSMC”), owner and operator of the DSO Project in the Schefferville/Menihek region of Canada’s Labrador Trough.
As background, NML’s investment originally represented a 20% ownership in TSMC as consideration for the sale of the initial mineral properties for the DSO Project. As per the Joint Venture Agreement dated as of November 6, 2009, NML is required to contribute 20% of all funding requests to shareholders as approved by TSMC’s Board of Directors in excess of TSMC’s first $300 million of specified expenditures. In April and June 2015, NML announced that it had received cash calls that could not be funded in view of the Company’s limited internal cash resources and financing sources available, which would result in a dilution of the Company’s interest in TSMC from the current 20% (see NR 15-04 and NR 15-06).
Further discussions between the parties have produced the following settlement:
- Current cash requirement of just over $1.0 billion for the DSO Project, to fund certain capital and operating expenses for the DSO Properties and the Howse Deposit.
- Total cash calls of $524.5 million to the shareholders have or will be satisfied solely by Tata Steel.
- Shareholder loan of $4.7 million received by TSMC from NML and $0.6 million of accrued interest are converted into equity in TSMC.
- NML is not required to pay, or provide security for, any cash calls up to the $1.0 billion figure.
- NML’s ownership of TSMC is now diluted to 6.0%.
- NML will maintain its 6.0% ownership interest by paying its pro-rata share of any future cash calls over the $1.0 billion figure.
Other provisions include:
- Certain DSO Claims not budgeted for exploration or evaluation by NML and which NML is restricted from developing in competition with TSMC, are transferred to TSMC as part of the settlement.
- TSMC agrees to give priority to utilizing NML’s Port of Sept-Îles dock capacity.
- As a result of its reduced ownership, NML is no longer able to nominate a director to TSMC’s Board.
- TSMC to provide specified operating and financial information to NML.
Robert Patzelt, NML’s President and CEO, commented, “This settlement is the result of a detailed and lengthy review by NML and independent specialists of the costs, strategy, development program and mining operations undertaken by TSMC in respect of the DSO Project, and is accepted by NML. The DSO Project has evolved into a larger-capacity, longer-life operation than as set out in the Joint Venture Agreement between ourselves and Tata Steel, and is the Labrador Trough’s newest supplier to the seaborne iron ore market. This is a significant achievement, especially in light of recent challenges in the capital and in the iron and steel markets. We are pleased to have resolved the cash call issue and be able to continue our partnership with Tata Steel.”
About New Millennium
The Company controls the emerging Millennium Iron Range, located in the Province of Newfoundland and Labrador and in the Province of Quebec, which holds one of the world’s largest undeveloped magnetic iron ore deposits. In the same area, the Company and Tata Steel Limited (“Tata Steel”), one of the largest steel producers in the world, have advanced a Direct Shipping Ore (“DSO”) Project to the production stage, from which trial shipments have begun. Tata Steel owns approximately 26.2% of New Millennium and is the Company’s largest shareholder and strategic partner.
Tata Steel exercised its exclusive option to participate in the DSO Project and has a commitment to take the resulting production (see news release 10-16 dated September 14, 2010). The DSO Project is owned and operated by Tata Steel Minerals Canada Ltd. (“TSMC”),. The DSO Project contains 98.9 million tonnes of Measured and Indicated Mineral Resources at an average grade of 59.3% Fe, 6.7 million tonnes of Inferred Resources at an average grade of 56.7% Fe and about 20.0 – 25.0 million tonnes of historical resources that are not currently in compliance with NI 43-101 (see news release 09-03 dated February 11, 2009, news release 09-05 dated March 4, 2009, news release 09-16 dated December 9, 2009, news release 10-12 dated July 8, 2010, news release 12-14, dated May 31, 2012 and news release 14-02 dated February 24, 2014). A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, the Company is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon.
LabMag contains a total of 3.9 billion tonnes of Proven and Probable reserves at a grade of 29.7% Fe plus 0.39 billion tonnes of Measured and Indicated resources at an average grade of 29.7% Fe and 1.1 billion tonnes of Inferred resources at an average grade of 29.6% Fe. KéMag contains a total of 2.4 billion tonnes of Proven and Probable reserves at an average grade of 30.6% Fe and 1.0 billion tonnes of Inferred resources at an average grade of 31.6% Fe (see LabMag and KéMag NI 43-101 Technical Reports filed on SEDAR May 12, 2014). Tata Steel also exercised its exclusive right to negotiate and settle a proposed transaction in respect of the LabMag Project and the KéMag Project (see news release 11-09 dated March 6, 2011).
The Millennium Iron Range now hosts other taconite deposits. The first is the Lac Ritchie property located at the north end of the Range. The initial 2011 drilling of 40 holes in this property revealed Indicated Resources of 3.330 billion tonnes at an average grade of 30.3% Fe, and Inferred Resources of 1.437 billion tonnes at an average grade of 30.9% Fe (see news release NR 12-11, dated April 02, 2012).
Two other taconite deposits are located south of the LabMag deposit in the Millennium Iron Range. The initial 2012 drilling of 23 holes in the Sheps Lake property and of 50 holes in the Perault Lake property revealed Indicated Resources of 3.580 billion tonnes at an average grade of 31.22%, and Inferred Resources of 795 million tonnes at an average grade of 30.56% (see news release NR 13-04, dated February 11, 2013).
The Howells Lake – Howells River North deposit is located between the LabMag and KéMag deposits, and evidences mineral continuity in the Range. The 2011 and 2012 drilling of 11 holes in the Howells River North property and of 45 holes in the Howells Lake property, revealed Indicated Resources of 7.631 billion tonnes at an average grade of 30.39% Fe, and Inferred Resources of 3.310 billion tonnes at an average grade of 29.83% Fe (see news release NR 13-15, dated May 23, 2013).
The Company’s mission is to add shareholder value through the responsible and expeditious development of the Millennium Iron Range and other mineral projects to create a new large source of raw materials for the world’s iron and steel industries.
Dean Journeaux, Eng., and Thiagarajan Balakrishnan, P. Geo., are the Qualified Persons as defined in National Instrument 43-101 who have reviewed and verified the scientific and technical mining disclosure contained in this news release.
This news release contains certain forward looking statements and forward looking information (collectively referred to herein as “forward looking statements”) within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as “could”, “should”, “can”, “anticipate”, “expect”, “believe”, “will”, “may”, “projected”, “sustain”, “continues”, “strategy”, “potential”, “projects”, “grow”, “take advantage”, “estimate”, “well positioned” or similar words suggesting future outcomes. In particular, this news release may contain forward looking statements relating to future opportunities, business strategies, mineral exploration, development and production plans and competitive advantages.
The forward looking statements regarding the Company are based on certain key expectations and assumptions of the Company concerning anticipated financial performance, business prospects, strategies, regulatory developments, exchange rates, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, the actual results of exploration and development projects being equivalent to or better than estimated results in technical reports or prior activities, and future costs and expenses being based on historical costs and expenses, adjusted for inflation, all of which are subject to change based on market conditions and potential timing delays. Although management of the Company considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect.
By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward looking statements, including among other things: inability of the Company to continue meet the listing requirements of stock exchanges and other regulatory requirements, general economic and market factors, including business competition, changes in government regulations or in tax laws; general political and social uncertainties; commodity prices; the actual results of exploration, development or operational activities; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Company; timing and availability of external financing on acceptable terms; conclusions of, or estimates contained in, feasibility studies, pre-feasibility studies or other economic evaluations; and lack of qualified, skilled labour or loss of key individuals; as well as those factors detailed from time to time in the Company’s interim and annual financial statements and management’s discussion and analysis of those statements, along with the Company’s annual information form, all of which are filed and available for review on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list is not exhaustive.
The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this news release are made as of the date of this news release and the Company does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
With respect to the disclosure of historical resources in this news release that are not currently in compliance with National Instrument 43-101, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, the Company is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon.
President & Chief Executive Officer
Tel: (514) 935-3204 ext. 370
Vice-President, Investor Relations and Corporate Affairs
Tel: (514) 935-3204 ext. 349
Tel: (416) 577-9927