New Millennium Capital Corp. (TSX V:NML) (“NML” or the “Corporation”) announced today that it has signed a binding heads of agreement (the “Binding HOA”) with Tata Steel Global Minerals Holdings Pte Ltd (“Tata Steel”) to develop the LabMag and KéMag iron ore deposits, known collectively as the Taconite Project. The remainder of the Millennium Iron Range will be retained by NML.
Under the Binding HOA, Tata Steel shall participate in the development of a feasibility study of the Taconite Project (the “Feasibility Study”) and contribute towards 64% of the costs related thereto. The parties would enter into a binding joint venture agreement upon the successful completion of the Feasibility Study and Tata Steel electing to develop one or both of the deposits. After formation of the joint venture, NML is expected to hold a 36% equity interest in the Taconite Project, including a 20% free carry equity interest. In addition, NML will have a 4% right of first refusal on future equity sales by Tata Steel to increase its equity interest to a maximum of 40%.
Tata Steel will arrange the required equity portion of the financing (excluding NML’s optional equity interest) based on a maximum capital expenditure of up to $4.85 billion if both deposits are developed and up to $4.68 billion and up to $3.76 billion respectively, if only the KéMag or LabMag deposits are developed. Arranging debt financing for the project shall be the responsibility of Tata Steel. All dollar amounts in this news release are expressed in Canadian dollars unless otherwise specified.
A conference call to discuss the Binding HOA is scheduled for 11:00 a.m. ET on Monday, March 7, 2011. Details follow at the end of this news release.
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