Business
Stelco announces sale of Wabush mine interest
Stelco announces sale of Wabush mine interest.
About this update from Starr Peak Mining Ltd
[{"type":"text","content":"\n\n\n\nHAMILTON, ON, June 6 /CNW/ - Stelco Inc. (TSX: STE) announced today that\nit has entered into an agreement providing for the sale of its 44.6% interest\nin the Wabush mine joint venture to Consolidated Thompson Mines Limited\n("Consolidated") for total consideration with an estimated value to Stelco of\n$163.4 million.\n\n\nThe total transaction value includes cash of $44.4 million, assumed\nliabilities estimated at $94.6 million, approximately 1.9 million warrants to\npurchase shares of Consolidated valued at $1.7 million, and an agreement for\nConsolidated to supply iron ore pellets to Stelco until December 31, 2009\nvalued at $22.7 million. In addition, Stelco will retain its share of the\nWabush iron ore inventory, which is valued at approximately $35.7 million.\n\n\nThe Wabush mine joint venture holds assets including the Scully iron ore\nmine and related assets situated at or near Wabush, Newfoundland and Labrador,\nand pelletizing facilities and related infrastructure located in Quebec.\nWabush joint venture partners include Stelco, Cleveland-Cliffs Inc. (26.8%),\nand Dofasco Inc. (28.6%). The sale of Stelco's interest in Wabush is the\nresult of an agreement between Stelco and Cleveland-Cliffs Inc, the mine's\noperating partner, with Consolidated providing for the sale of the interests\nof each of Stelco and Cleveland-Cliffs Inc to Consolidated.\n\n\n"The Wabush mine requires some redevelopment work which has an associated\ncapital requirement. Consolidated is better positioned to complete this work\ngiven operating synergies available to them with their neighbouring mining\ninterests," said Rodney Mott, President and CEO. "This transaction will\nimprove our financial position and accelerates our efforts to surface value in\nStelco," added Mott.\n\n\nCompletion of the transaction is subject to the execution of definitive\nagreements and the receipt of all required third party consents and regulatory\napprovals. Dofasco Inc., the owner of the remaining 28.6% interest in the\nWabush mine joint venture, has a right of first refusal over the proposed\ntransaction which may be exercised for a period of 90 days in accordance with\nthe provisions of the project agreements governing the joint venture. It is\nexpected that the completion of the transaction will occur shortly following\nthe wa...