Iberian Minerals to Buy Aguas Tenidas Underground Contractoradmin
Iberian Minerals Corp. announced today that the Company, through its wholly-owned subsidiary Minas de Aguas Tenidas S.A.U. (“MATSA”) has entered into an agreement with INGENIERIA DE SUELOS Y EXPLOTACION DE RECUROS S.A (“Insersa”) whereby MATSA will purchase the Aguas Tenidas underground mining division of Insersa for the sum of Euros 6,000,000, payable as to Euros 5,520,000 in cash and Euros 480,000 in common shares of Iberian.
The cash portion of the consideration will be paid as to 30% (Euros 1,656,000) on closing, 30% (Euros 1,656,000) six months after closing, and the remaining balance of 40% (Euros 2,208,000) in one year. All future payments are without interest.
The common shares of Iberian to be issued will be calculated by converting Euros 480,000 to Canadian dollars as of the day before closing, with the issuance price to be determined as the weighted average of the closing price of the Company’s common shares on the TSXV for the twenty-day trading days prior to the closing date. For illustration, applying the formula to exchange rates and closing prices on July 17, 2009, approximately 1,767,805 common shares of the Company will be issued (to be finally calculated as at the date of closing), being less than 1% of the total 336,596,792 currently outstanding shares of the Company.
Daniel Vanin stated; “We are happy to have reached this agreement with Insersa. The purchase will allow us to have complete control over our underground operations, with direct supervision and monitoring of timely development and mining of stopes for production ore, and the timing of haulage of ore and waste from underground to surface. We expect the purchase to significantly enhance our operational efficiency and effectiveness at Aguas Tenidas. This agreement achieves a long term strategy goal of fully controlling our underground operations as part of the integrated MATSA team”.
Insersa has provided underground services to MATSA for a number of years, and currently has 190 employees at the Aguas Tenidas site, most of whom will now become part of the MATSA direct employee count. Included in the purchase is Insersa’s onsite equipment, including 3 articulated 25 tonne trucks, 3 drill jumbos, 1 scooptram, 2 shotcrete jumbos, 1 shotcrete transport truck and ancillary equipment such as pumps, fans and tools and light trucks.
The transaction is subject to definitive documentation, board and regulatory approval, as required, and due diligence, and is expected to close on July 31, 2009. Financing for funds due on closing will be from existing funds on hand. The Company will be revising its cash needs forecast as a result of the purchase for the balance of 2009.