Canada Fluorspar Announces Completion of Strategic Investment With Arkema Re-Activating the St. Lawrence Fluorspar Project
October 12 2011 - 4:00PM
Marketwired
Canada Fluorspar Inc. ("CFI" or the "Company") (TSX VENTURE:CFI)
and Arkema ("Arkema") (PARIS:AKE) are pleased to announce the
closing, in escrow, of the second phase of the previously announced
strategic agreement to re-activate CFI's fluorspar project located
in St. Lawrence, Newfoundland.
Under the terms of an investment agreement entered into between
Arkema and CFI dated October 11, 2011, Arkema will fund $60 million
into a newly formed general partnership, Newspar and CFI will fund
$14 million into Newspar. In addition, CFI will contribute to the
Partnership the mining rights and permits related to the Blue Beach
mine, the Tarefare mine, the mill facilities and the tailings pond
needed to produce fluorspar (the "Project"). On closing, CFI and
Arkema will each have a 50% interest in Newspar. The funds and
documentation related to the transactions contemplated by the
investment agreement will be released from escrow once the mining
licences and leases relating to the Project are transferred into
Newspar. It is expected that these licences and leases will be
transferred in short order. In addition, when the escrow condition
is satisfied, subscription receipts held by Arkema since June 27,
2011 issued at $0.75 per share will be converted to 10,357,722
common shares and $7.76 million held in escrow will be released to
CFI.
In addition to his roles as President and CEO of CFI, Lindsay
Gorrill has become the CEO of Newspar. Newspar will be governed by
a management committee made up of two nominees of each of Arkema
and CFI and an additional independent member. Arkema's nominees to
the management committee of Newspar are Richard Rowe, Global Group
President, Fluorochemicals and Danny Wright, Industrial Project
Director, Fluorochemicals and CFI's nominees are Richard Carl,
Executive Chairman of CFI and Leo Power, a director of CFI.
As part of the Partnership, CFI and Arkema will each receive a
pro rata share of the output at a price equal to the costs of
production. In addition, Arkema will have the right to acquire for
a period of 10 years, approximately 20% of CFI's share of the
output on a pricing basis that includes costs plus a fixed margin
and will have the option to acquire additional fluorspar from CFI
at market price.
Lindsay Gorrill, President and CEO of CFI and CEO of Newspar
commented, "closing the second phase of the Arkema investment
allows us to move forward on the re-activation of the fluorspar
mines at St. Lawrence and in doing so generate over 150 direct full
time jobs on the Burin Peninsula." Mr. Gorrill also added that, "it
is increasingly clear to CFI that Arkema has been and will be the
right choice as a partner for the Project. Arkema's commitment to
health, safety and the environment aligns with our own and we look
forward to developing the Project at St. Lawrence with them."
Richard Carl, Executive Chairman of CFI noted that, "closing the
second phase of our arrangements with Arkema solidifies our
partnership and allows CFI to advance the development of our
project to completion without encumbering our balance sheet with
debt. In an increasingly volatile financial world meeting these
financial parameters allows CFI an unencumbered path to future
growth."
Arkema is a global chemical company and France's leading
chemicals producer. Deploying a responsible and innovation-based
approach, Arkema produces state of the art specialty chemicals that
provide customers with practical solutions to such challenges as
climate change, access to drinking water, the future of energy,
fossil fuel preservation and the need for lighter materials. With
operations in more than 40 countries, 14,000 employees and 8
research centres, Arkema generates annual revenue of Euros 5.9
billion.
Advisors
CFI's legal counsel for this transaction is Stikeman Elliott
LLP. Torys LLP has advised Arkema.
Conference Call
The Company will host a conference call on Thursday, October 13,
2011 at 4:00 p.m. Eastern Standard Time (EST) to discuss the
completion of the transaction and to provide an update on the
status of the activities at the mine site.
Participants should dial 1-888-437-9364 or 1-719-457-2657 at
least 10 minutes prior to the conference time of 4:00 p.m. EST. For
those unable to attend the call, a replay will be available after
7:00 p.m. at 1-877-870-5176 and 1-858-384-5517 pass code 9327354
until midnight, October 20, 2011.
About the Company
The Company is a specialty mineral resource company engaged in
the development and production of fluorspar deposits at its
property located in St. Lawrence, Newfoundland, Canada, and is
moving forward to reactivate existing underground fluorspar mines,
expand an existing mill, construct a new, environmentally-sound
Tailings Management Facility and build a new deep-water marine
terminal in the outer St. Lawrence Harbour for the export of
fluorspar concentrate product.
For more information please see: www.canadafluorspar.com.
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.
Contacts: Canada Fluorspar Inc. Lindsay Gorrill President and
CEO 1-800-823-8095lgorrill@canadafluorspar.com Spinnaker Capital
Markets Inc. Ali Mahdavi Partneram@spinnakercmi.com
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