Timminco Limited

Timminco Limited

July 24, 2009 18:39 ET

Timminco Completes Divestiture of Magnesium Business

TORONTO, ONTARIO--(Marketwire - July 24, 2009) - Timminco Limited ("Timminco")(TSX:TIM) announced that it has completed the divestiture of its magnesium business, with the closing of the merger of Timminco's remaining magnesium extrusion and specialty metals business with the magnesium operations of Winca Tech Limited, a leading Chinese-based producer of magnesium products ("Winca"), to form Applied Magnesium International Limited ("Applied Magnesium").

The merger was effected through the sale by each of Timminco and Winca of certain of their subsidiaries, intellectual property rights, equipment, non-cash working capital and other assets to Applied Magnesium, including Timminco's facility in Nuevo Laredo, Mexico and Winca's facilities in Hebi and Linyi, in the Henan and Shandong provinces, respectively, of the People's Republic of China. Key senior managers and employees of Timminco's magnesium business have accepted employment with Applied Magnesium and will form the core management team of its North American operations, based in Denver, Colorado.

In connection with the sale, Timminco received a 19.5% equity interest in Applied Magnesium as well as promissory notes of Applied Magnesium in the aggregate principal amount of US$3.7 million. Winca holds the remaining equity and has received a promissory note from Applied Magnesium in the principal amount of US$4.0 million. The equity interests in Applied Magnesium are subject to a shareholders agreement, which includes board representation and special approval rights in favour of minority shareholders, as well as share transfer restrictions. The promissory notes issued to Timminco are non-interest bearing and subject to additional conditions, including the financial performance and liquidity of Applied Magnesium.

"We are pleased to have closed the trans actions with Winca as contemplated by the agreements executed in April," said John Fenger, President and Chief Operating Officer of Timminco. "The completion of the divestiture of our magnesium business will enable us to focus on our core silicon businesses."

About Timminco

Timminco produces solar grade silicon for the solar photovoltaic energy industry. Using its proprietary, patent pending technology, Timminco purifies silicon metal into solar grade silicon (also known as upgraded metallurgical silicon) for use in the manufacture of solar cells. Timminco also produces silicon metal for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.


This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding Applied Magnesium and Timminco's investments in Applied Magnesium. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: global economic conditions; future growth plans and strategic objectives; liquidity risks; limitations under existing credit facilities; long-term contracts for supplying solar grade silicon; solar grade silicon production cost targets; selling prices of solar grade silicon and silicon metal; achieving and maintaining the purity of solar grade silicon; production capacity expansion at the Becancour facilities; pricing and availability of raw materials for the silicon business; customer capabilities in producing ingots; limited history with the solar grade silicon business; dependence upon power supply for silicon metal production; protection of intellectual property rights; government and economic incentives; closure of the magnesium facilities and the completion of related proposed transactions; cost and availability of magnesium metal; dependence upon key customers of magnesium extruded and fabricated products; credit risk exposure; customer concentration; equipment failures; labour disputes; foreign currency exchange; dependence upon key executives and employees; completion and integration of potential acquisitions, partnerships or joint ventures; risks with foreign operations and suppliers; environmental, health and safety laws and liabilities; transportation disruptions; conflicts of interest; interest rates; intellectual property infringement claims; new regulatory requirements; changes in tax laws; and climate change.
These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2008, and Timminco's most recent Management's Discussion and Analysis, each of which is available via the SEDAR website at www.sedar.com. In addition, the proposed debt financing remains subject to conditions as identified in this news release and there is no assurance that such financing will be completed on terms acceptable to Timminco if at all. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.

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