SYDNEY, NS, Dec. 17 /CNW/ - Atlantic Industrial Minerals Incorporated (TSXV:ANL.V) ("AIM") announced today that it has entered into a formal agreement with respect to its previously announced plan to sell its common shares of Kelly Rock Limited to Municipal Capital Incorporated. Kelly Rock currently operates the Glen Morrison Limestone Quarry and supplies limestone to Nova Scotia Power Incorporated under a 7-year supply contract expiring in 2010. AIM currently owns 675,000 common shares of Kelly Rock while Municipal Capital owns one common share and 675,000 preferred shares of Kelly Rock. Kelly Rock has debts outstanding to Municipal Capital of approximately $264,000, and as of August 31, 2008, the Kelly Rock preferred shares held by Municipal Capital, the aggregate accrued and unpaid dividends on the preferred shares were $1,113,750, for a total obligation upon redemption of the preferred shares of approximately $1,788,750. Municipal Capital also owns 7,136,744 common shares of AIM.
Under the terms of the agreement, in consideration for the 675,000 common shares of Kelly Rock, Municipal Capital would provide sufficient funds to Kelly Rock to allow it to repay its outstanding debt owed to the Corporation, which was approximately $872,527 as of August 31, 2008. AIM, in turn, would repay certain debt it owes to Municipal Capital, which was approximately $771,632 as of August 31, 2008. Municipal Capital would also return 3,615,872 of its AIM common shares to AIM for cancellation. It is expected that this transaction would remove approximately $2,836,302 in obligations from the consolidated balance sheet of AIM. The current trading price of AIM shares is approximately $0.11 per share. In addition, Kelly Rock would pay aggregate royalties to AIM of $225,000 in respect of production at the Glen Morrison Limestone Quarry over the 2008, 2009 and 2010 fiscal years of AIM in lieu of the current royalty, which would be canceled. If the transaction is approved by shareholders and completed, David MacKenna, Glen Dexter and Barclay Cunningham intend to resign as officers and directors of AIM.
Following the transaction, Atlantic Industrial Minerals would have 10,770,116 common shares outstanding and would continue to own the following:
- 50% interest in Glencoe Resources Inc. which owns the mineral rights to the Glencoe limestone resource; - 100% interest in the limestone resource at Port Au Port Peninsula, Newfoundland and Labrador; and, - 100% interest in Great Bras d'Or Springs Inc. water resource.
The proposed transaction is subject to final regulatory and shareholder approval, including approval by a majority of the votes cast at the meeting excluding votes attached to common shares held by MCI, Mr. MacKenna and any affiliated or related parties of MCI, Mr. MacKenna. A meeting of shareholders to consider the transaction has been scheduled for January 15, 2009. Shareholders should refer to the management information circular to be distributed in connection with the shareholders meeting for additional information regarding the transaction.
AIM is a natural resource company based in Sydney, Nova Scotia, engaged in the production and sale of industrial minerals. The common shares of AIM are listed on the TSX Venture Exchange.
Commentary regarding forward looking statements:
This news release may contain forward-looking statements, including in connection with the transactions contemplated by the Agreement. Such statements involve known and unknown risks, uncertainties, and other factors outside management's control including, but not limited to, receipt of required approvals for the completion of the transactions contemplated in the Agreement, that could cause actual results to differ materially from those expressed in the forward-looking statements. AIM does not assume responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
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.