Iberian Minerals Corp.
TSX VENTURE : IZN

Iberian Minerals Corp.

October 02, 2009 09:00 ET

Iberian Minerals Announces Bridge Financing

TORONTO, ONTARIO--(Marketwire - Oct. 2, 2009) - Iberian Minerals Corp. (TSX VENTURE:IZN) announced today that it has approved a term sheet with Trafigura Beheer, B.V., the principal shareholder of the Corporation, for a bridge financing of up to US$21,000,000 (the "Bridge Facility"). Trafigura currently holds 154,582,163 registered shares of Iberian, or approximately 45.73% of the current issue of 338,055,865 registered shares.

As previously announced, the Corporation anticipated a funding requirement in the range of US$20 to US$30 million for Aguas Tenidas to meet costs relating to the Insersa purchase, increased development and plant capex at Aguas Tenidas resulting from the decision to increase to a target of 2.2Mtpa processing capacity, and general capex increases.

The Bridge Facility will be available for working capital purposes, is non-revolving, and open for one year but matures early upon closing of a contemplated senior debt financing by Minas de Aguas Tenidas, S.A. ("MATSA"), a wholly-owned subsidiary of Iberian and the owner of the Aguas Tenidas Mine in Spain. The Bridge Facility bears interest at 7% payable upon maturity and is unsecured. A 1% upfront fee (US$210,000) is payable upon first drawdown. Draws are available in a first tranche of US$6 million, and thereafter in three further draws of US$5 million.

Iberian has commenced the process of seeking senior debt financing to replace the Bridge Facility to be secured by the Aguas Tenidas assets, and expects a senior facility to be in place before the end of 2009.

In connection with the Bridge Facility, 22,000,000 warrants will be issued to Trafigura, pro rata as draws occur. Each warrant will be exercisable for one registered share of Iberian at $0.52 for a period of one year. If fully exercised, and assuming no further share issuances, Trafigura will hold a total of 176,582,163 registered shares, or approximately 49% of the then current issue of 360,055,865 registered shares.

The Bridge Facility is subject to board and TSXV approvals. It is expected that the Bridge Facility will close, and first drawdown will occur, on or about October 8, 2009.

Related Party Transaction

Pursuant to Multilateral Instrument 61-101 ("MI 61-101"), the Bridge Facility is a related party transaction with Trafigura. It is also expected that Iberian will engage Trafigura to assist in securing the senior debt financing and will pay Trafigura a fee as consideration for such services. For the purposes of MI 61-101, such engagement is considered to be a connected transaction to the related party transaction. In respect of the related party transaction, including the connected transaction, Iberian is relying on the exemptions from the formal valuation and minority approval requirements contained in sections 5.5(a) and 5.7(a) of MI 61-101 as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction will exceed 25% of Iberian's market capitalization.

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian listed global base metals company with interests in Spain and Peru. The Condestable Mine, located in Peru approximately 90 km south of Lima, operates at 2.2 million tonnes per year producing copper, and associated silver and gold in a concentrate. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville. Ramp-up continues on a 1.7 million tonnes per year underground mine and concentrator that will produce copper, zinc and lead concentrates that also contain gold and silver.

FORWARD LOOKING STATEMENTS:

This news release contains certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "except", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based included that all required third party regulatory and governmental approvals will be obtained. Many of these assumptions are based on factors and events that are not within the control of Iberian and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the annual Management's Discussion and Analysis and Annual Information Form for Iberian filed with the applicable securities regulatory authorities and available at www.sedar.com. Although Iberian has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Iberian undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

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.

Contact Information

  • Iberian Minerals Corp.
    Laura Sandilands
    Investor Relations and Corporate Communications
    416-815-8558