Anglo Minerals Ltd.

Anglo Minerals Ltd.

June 05, 2006 11:55 ET

Anglo Announces Joint Venture with Resources Major

CALGARY, ALBERTA--(CCNMatthews - June 5, 2006) -

(Not for Dissemination in the United States)

Anglo Minerals Ltd. (TSX VENTURE:ALM) ("Anglo" or the "Corporation") is pleased to announce that it has, through its wholly owned subsidiary Prairie Potash Corp. ("PPC"), entered into an Earn-In and Subscription Agreement ("EISA") and Joint Venture Agreement with BHP Billiton Diamonds Inc. ("BHP Billiton"). Pursuant to the EISA, the parties will enter into a joint venture in respect of Anglo's 85% owned Saskatchewan potash project (the "Project") and BHP Billiton will earn a 60% interest in the Project by (i) paying to Anglo the sum of US$3.8 million upon satisfaction of all conditions precedent, including regulatory approval; (ii) spending up to US$40 million over the next approximately 66 months in order to keep the Project in good standing and to complete a feasibility study for the Project; (iii) contingent upon satisfactory results of the feasibility study, paying to Anglo a further US$10 million within 66 months from the closing of the JV transaction; and (iv) subscribing for 1,039,093 common shares of Anglo by way of a private placement at an issue price of approximately $1.059 per share for gross proceeds to Anglo of US$1 million, the proceeds of which will be used by Anglo for general working capital and to advance the Project.

As at and from closing, BHP Billiton will earn a 60% interest in the Project, but the Joint Venture Agreement provides that in the event that BHP Billiton fails to complete the feasibility study or expend the US$40 million as described in paragraph (ii) above, or to make the US$10 million contingent payment as described in paragraph (iii), up to a 56% interest in the Project is subject to relinquishment to PPC. The Joint Venture Agreement also provides that BHP Billiton will be the operator of the JV, will offer to provide Anglo with some limited assistance in financing Anglo's share of the Project and will, upon the Project going into production, market Anglo's share of production. Upon the closing of the within transaction, the Project will be held by BHP Billiton as to 75% and Anglo (through PPC) as to 25%.

Closing of the transactions described above will take place following the satisfaction of all conditions precedent, including the receipt of final approval and acceptance of the transactions by the TSX Venture Exchange.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Anglo Minerals Ltd.
    Todd Montgomery
    (403) 228-0607