WGI Heavy Minerals announces sale of Transworld Garnet India (Pvt.) Limited

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[{"type":"text","content":"\n\n\n\nCOEUR D'ALENE, ID, June 11 /CNW/ - WGI Heavy Minerals, Incorporated (TSX:\nWG) today announced that the Company and its partner, Heavy Industrial\nMinerals India (Pvt.) Limited, have entered into an agreement to sell their\ninvestment in Transworld Garnet India (Pvt.) Limited ("TGI") for a cash\nconsideration of 836,000,000 Ruppees, approximately US $19.5 million, to V.V.\nMineral, of Tamil Nadu, India. WGI's share of the proceeds is approximately\nUS $17.3 million consisting of its 74% equity interest and the repayment of\ndebt financing. The exact amount of the proceeds to be received by WGI will\ndepend upon exchange rates at the time of closing which is expected to be in\nAugust, 2008.\n\n\nWGI has also signed a three-year distribution agreement with annual\nrenewals with V.V. Mineral covering garnet, ilmenite and other minerals that\nmay be present in the beach sands mined by V.V. Mineral. The distribution\nagreement provides WGI with an assured minimum supply of 60,000 metric tons\nannually of garnet, which is a significant increase over current production\nrates. Garnet grades and quality levels will be consistent with material\ncurrently supplied to WGI by TGI. Additional quantities of garnet will be\nsupplied as V.V. Mineral's capacity expands. In addition, WGI will act as a\nbroker for the sale of V.V. Mineral's ilmenite products and will have first\nopportunity to negotiate contractual arrangements for other minerals with V.V.\nMineral once production begins.\n\n\nThe Board of Directors of WGI is currently intending that, following the\nclosing of the sale to V.V. Mineral, the Board will distribute US $0.80 per\nshare in cash to the Company's shareholders.\n\n\n"The transaction and this partnership with V.V. Mineral are very positive\nsteps for WGI shareholders who will benefit from the Company's exit from its\nproblematic production operations in India while maintaining a reliable supply\nof minerals. This will allow WGI to focus on its core business of marketing\nand selling garnet," said Greg Emerson, Chief Executive Officer of WGI..\n\n\n"This alliance matches V.V. Mineral, one of the leading producers of\nheavy minerals in India, with WGI, an experienced, global marketing, sales and\ndistribution network for those products. WGI expects to continue supplying the\nquality garnet pro...

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