Iberian Board agrees to recommend Trafigura Offer of Cdn.$1.10 per share for the company and provides 2012 guidance
Not for distribution to United States newswire services or for dissemination in the United States
TORONTO, Nov. 17, 2011 /CNW/ - Iberian Minerals Corp. ('Iberian')
announces that it has entered into an agreement (the 'Pre-Acquisition Agreement') with Trafigura Beheer B.V. ('Trafigura') pursuant to which Trafigura has agreed, subject to the terms of the Pre-Acquisition Agreement, to make an offer to purchase all outstanding registered shares of Iberian (the 'Iberian Shares') that it does not already own by way of a take-over bid at a price of Cdn.$1.10 per Iberian Share in cash (the 'Offer').After consulting with its financial and legal advisors and upon the recommendation of a special committee comprised of the independent directors of Iberian (the 'Special Committee'), the Board of Directors of Iberian entitled to vote on the matter has unanimously determined that the Offer is fair, from a financial point of view, to the holders of Iberian Shares and in the best interests of Iberian and its shareholders and has agreed to recommend to shareholders that they accept the Offer. Cormark Securities Inc. ('Cormark'), the financial advisor to the Special Committee, has provided an opinion to the effect that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration proposed to be paid to the holders of Iberian Shares (other than Trafigura and its affiliates) pursuant to the Offer is fair from a financial point of view to such shareholders.
Trafigura is Iberian's largest shareholder owning approximately 218.4 million Iberian Shares representing approximately 48.3% of the issued and outstanding Iberian Shares. Accordingly, the Offer will be an 'insider bid' pursuant to Multilateral Instrument 61-101 and requires a formal independent valuation to be completed. Cormark was retained by the Special Committee to complete such valuation and has determined that the Offer is within the range determined by such valuation. The details of Cormark's valuation will be included in the take-over bid circular to be mailed to Iberian's shareholders in respect of the Offer.
The Special Committee, in its review of the Offer and determination to recommend the Offer to shareholders, considered a number of factors, including those listed below:
-- Significant Premium to Market - The Offer represents a 39%
premium to yesterday's closing price of the Iberian Shares on
the TSX Venture Exchange and a 38% premium to the 20-day volume
weighted average price for the 20-day period ending yesterday;
-- Certainty of Cash- The consideration to be offered is 100%
cash, which provides shareholders with definite liquidity of
their holdings in Iberian and certainty of return, which are
important considerations given the high degree of equity market
volatility currently being experienced;
-- Operational Update - The board of directors of Iberian met on
November 16, 2011 to review and approve 2012 budgets for
Condestable and Aguas Tenidas. At Aguas Tenidas, the 2012
budget calls for incremental non-discretionary capital
expenditures in the next four years, which were not previously
forecast, in order to sustain mining throughput at current
levels and to support ongoing mine development. In addition,
recently completed definition drilling and reserve modeling at
Aguas Tenidas has resulted in a revised interpretation of
long-term copper and zinc grades that are lower than previously
modeled; and
-- Fairness Opinion - The opinion of Cormark to the Special
Committee, dated November 16, 2011, as to the fairness of the
consideration, from a financial point of view, to the minority
shareholders.
Concurrent with signing the Pre-Acquisition Agreement, Hedgehog Capital LLC (Iberian's largest shareholder after Trafigura), Drakanea Management Limited and Iberian's directors and key officers each entered into a lock-up agreement pursuant to which each has agreed to tender all Iberian Shares and all in-the-money securities held by them in favour of the Offer. In total, approximately 17% of the Iberian Shares, on a fully diluted basis, are subject to the lock-up agreement, which, in addition to the Iberian Shares already owned by Trafigura, represents approximately 59.2% of the Iberian Shares on a fully diluted basis.
Pursuant to the Pre-Acquisition Agreement, Iberian may not solicit other offers, but is entitled to consider any acquisition proposals made by third parties to satisfy the Board of Directors' fiduciary duties. The Pre-Acquisition Agreement also provides for, among other things, customary provisions relating to the support of the Board of Directors, non-solicitation and the payment to Trafigura of a termination fee of Cdn.$10 million if the acquisition is not completed in certain specified circumstances. The obligation of Trafigura to take up and pay for the Iberian Shares under the Offer is subject to certain conditions, certain of which may be waived by Trafigura in certain circumstances.
Trafigura has advised Iberian that it intends to commence the Offer and mail the take-over bid circular not later than December 30, 2011. The Offer will be open for acceptance for a period of not less than 35 days. The Board of Directors has agreed that its directors' circular recommending the Offer will be mailed to shareholders at the same time as or as soon as reasonably practicable after the mailing of the take-over bid circular. The precise details of the Offer will be contained in the take-over bid circular.
Cormark is acting as financial advisor to the Special Committee and Heenan Blaikie LLP is acting as legal counsel to Iberian. BMO Capital Markets is acting as financial advisor to Trafigura and Stikeman Elliott LLP is acting as legal counsel to Trafigura.
Conference Call
Iberian will host a conference call for analysts and shareholders commencing at 8:30 a.m.(Eastern time) today, November 17, 2011, to discuss the Offer.
Conference Call Information:
Participant dial-in number(s): 416-340-2217 / 866-696-5910
Participant pass code: 7438002
2012 Production and Capex Guidance
Iberian is targeting the following guidance figures for the Condestable and Aguas Tenidas mines in 2012:
Condestable Mine:
-- Production
_______________________________
|Production |Unit| 2012|
|________________|____|_________|
|Ore processed | t |2,562,000|
|________________|____|_________|
|Concentrate |DMT | 91,200|
|________________|____|_________|
|Contained copper| t | 23,250|
|________________|____|_________|
|Fine gold | oz | 14,200|
|________________|____|_________|
|Fine silver | oz | 211,000|
|________________|____|_________|
-- Average head grade of approximately 1.004% Cu, and recovery
rate of 90.4% per year.
-- Cash operating costs of US$1.39 per payable pound of copper
produced.
Approved capital expenditures for the Condestable mine is US$9 million, primarily comprised of replacement of mine equipment, mine projects, plant equipment and exploration. Additional mine development expenditures will be US$13 million related to both depth development and horizontal development to support the current and near-term mining plan.
Aguas Tenidas Mine:
-- Production
_____________________________________
|Production |Unit| 2012|
|______________________|____|_________|
|Ores processed (total)| t |2,165,000|
|______________________|____|_________|
| - Copper Ores | t |1,106,000|
|______________________|____|_________|
| - Polymetallic Ores| t |1,059,000|
|______________________|____|_________|
|Copper concentrate |DMT | 116,500|
|______________________|____|_________|
|Zinc concentrate |DMT | 72,300|
|______________________|____|_________|
|Lead concentrate |DMT | 24,900|
|______________________|____|_________|
|Contained copper | t | 26,400|
|______________________|____|_________|
|Contained zinc | t | 35,400|
|______________________|____|_________|
|Contained lead | t | 5,000|
|______________________|____|_________|
|Fine silver | oz | 900,000|
|______________________|____|_________|
-- Average head grade (copper ores) of approximately 2.05% Cu, and
recovery rate of 86% per year.
-- Average head grade (polymetallic ores) of approximately 4.65%
Zn and recovery of 72%; head grade of approximately 1.09% Cu
and recovery of 60%.
-- Cash operating costs of US$1.40 per payable pound of copper
produced.
Approved capital expenditure budget for the Aguas Tenidas mine is US$53 million, with mine development and mine equipment costs comprising an aggregate of US$18 million, water treatment facility costs of US$12 million and exploration costs following up on the Titan 24 geophysical targets of US$5 million.
Cash Operating Cost per pound of payable copper includes cash operating costs, including treatment and refining charges ('TC/RC'), freight and distribution costs, and is net of by-product metal credits (zinc, gold and silver). The Cash Operating Cost per pound of payable copper indicator is consistent with the widely accepted industry standard established by Brook Hunt and is also known as the C1 cash cost.
About Iberian Minerals Corp.
Iberian Minerals Corp. is a Canadian listed global base metals company with interests in Spain and Peru. The Condestable Mine, located in Peru approximately 90 km south of Lima, operates at 2.2 million tonnes per year producing copper, and associated silver and gold in a concentrate. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville and operates a 2.2 million tonnes per year underground mine and concentrator that produces copper, zinc and lead concentrates that also contain gold and silver.
To find out more about Iberian Minerals Corp., please contact:
Laura Sandilands, Investor Relations and Corporate Communications at 416-815-8558.
About Trafigura
Trafigura is one of the world's leading international commodity traders, specializing in the supply and transport of crude oil, petroleum products, renewable energies, coal, refined metals, ferrous and non-ferrous ores and concentrates.
Established in 1993, Trafigura is owned by its founding shareholders and senior management. Trafigura employs over 6,000 people globally and operates from 67 offices in 44 countries.
Global Media Office: 44 20 7009 1708 / media@trafigura.com
FORWARD LOOKING STATEMENTS:
This news release contains certain 'forward-looking statements' and 'forward-looking information' under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as 'plan', 'expect', 'project', 'intend', 'believe', 'anticipate', 'estimate', and other similar words, or statements that certain events or conditions 'may' or 'will' occur. Forward looking information may include, but is not limited to, statements with respect successful completion of the Offer, the future financial or operating performances of the Corporation, its subsidiaries and their respective projects, the timing and amount of estimated future production and capital expenditures, estimated costs of future production, capital, operating and exploration expenditures, the future price of copper, gold and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the costs and timing of future exploration, requirements for additional capital, government regulation of exploration, development and mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, and limitations of insurance coverage. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the section entitled 'Risk Factors' in the Corporation's annual information form dated March 29, 2010. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
This press release shall not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction. The common shares will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Iberian Minerals Corp.
CONTACT: To find out more about Iberian Minerals Corp., please contact:
Laura Sandilands, Investor Relations and Corporate Communications at
416-815-8558.
Trafigura:
Global Media Office: 44 20 7009 1708 / media@trafigura.com
