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Message: Establishes a Stand-By Facility for Up to US$50 Million
| May 12, 2009 |
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Consolidated Thompson Establishes a Stand-By Facility for Up to US$50 Million
Mine production on track to reach full production of 8 MTPY scenario by the end of the year |
| TORONTO, ONTARIO--(Marketwire - May 12, 2009) - Consolidated Thompson Iron Mines Limited (TSX:CLM) ("Consolidated Thompson" or the "Company") is pleased to announce that it has entered into a term sheet with Marret Asset Management Inc. providing for a US$50 million secured note facility. The proposed facility would allow the Company to draw down up to US$50 million at any time prior to December 31, 2009. Consolidated Thompson would issue secured notes that represent any amount drawn down under the facility, which notes would mature on the date that is three years from the date of issue, provide for annual interest payments, and be subject to redemption by the Company at any time. At the time of draw down under the facility, the Company would be entitled to elect the applicable interest rate of either (i) 15% per year, or (ii) 10% per year and the issue of share purchase warrants having a present value that would create a yield of 15% per year. Richard Quesnel, the President and CEO of the Company, commented, "Together with the strategic investment by WISCO and our recently completed equity offering, this facility provides Consolidated Thompson with additional financial flexibility to accelerate any desired capacity expansion at the Bloom Lake mine, pursue other strategic initiatives and to cover any contingencies relating to the development of the Bloom Lake mine." As stated on May 4, 2009, both Consolidated Thompson and WISCO remain committed to completing WISCO's strategic investment in Consolidated Thompson as soon as possible. Consolidated Thompson and WISCO have agreed to extend the deadline to complete the transaction to June 1, 2009. Closing of this secured note facility is subject to regulatory approval, satisfactory completion of due diligence investigations, negotiation and execution of definitive agreements and the approval of the CLM board. The Company has agreed to issue 3,500,000 share purchase warrants to the lenders with an exercise price of CDN$3.75 and an expiry date that is three years from the date of issue. Macquarie Capital Markets Canada Ltd. acted as advisor to the Company in connection with this stand-by facility. Information on Consolidated Thompson 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. |
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