Anaconda Mining Inc announced that, pursuant to an agreement dated today, it has closed the sale of its Chilean iron ore exploration assets to a private Chilean company, Hierro Tal Tal SA, for up to USD 11 million in cash payments, a gross sales royalty and a 1.25% carried interest in Compania Portuaria Tal Tal SA.
With the cash proceeds received at closing of USD 2 million, Anaconda will repay the full principal amount plus accrued interest of approximately USD 711,000 to the holders of the Series III Debentures within one week of the closing.
In addition, the company will pay other outstanding debt service obligations and vendor payables. Per the terms of the share purchase agreement, Anaconda will receive another cash payment of USD 2 million on May 31st 2012, which the company expects to use primarily to repay portions of other debts including the Convertible Loan and the Series I and II Debentures. All amounts are in Canadian dollars unless stated otherwise.
Mr Dustin Angelo president & CEO of Anaconda said that "The sale of the Chilean iron ore assets is a very positive step for the company in realizing its long term strategic goals. The company has sought a way to derive value from the iron ore assets while separating them from our gold asset and the sale achieves those objectives. Anaconda can now focus its efforts on enhancing the performance of the Pine Cove mine and build off its recent success at the producing project.”
He added that "Furthermore, the company plans to pursue growth through exploration initiatives within the Pine Cove mining license. Anaconda will also evaluate expansion opportunities on the Baie Verte Peninsula as well as through corporate transactions or asset acquisitions of other gold assets throughout North America. In addition, the cash infusion from the sale has helped the company improve its balance sheet. With the other USD 2 million payment in approximately six months and cash flow from Pine Cove, Anaconda could potentially pay down a significant amount of its debt by the summer 2012."
Mr Antonio Barros GM of Tal Tal stated that "Tal Tal is currently undertaking advanced economic studies in preparation for financing the construction of an iron mine, near the town of Taltal in northern Chile, which will produce sinter feed for the Asian markets. Production is expected to begin by December 2012. Tal Tal is also planning further exploration with the goal of expanding resources in the area."
