Cline Mining Corporation
TSX : CMK

Cline Mining Corporation

June 23, 2008 09:39 ET

Cline Signs MOU with Mitsui Matsushima International Pty. Limited for $19 Million Loan

SUDBURY, ONTARIO--(Marketwire - June 23, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Cline Mining Corporation ("Cline" or the "Company") (TSX:CMK) announces that it has entered into a Memorandum of Understanding with Mitsui Matsushima International Pty. Limited. of Australia ("MMI"), a wholly owned subsidiary of Mitsui Matsushima Co., Ltd. of Japan, under which MMI will provide a loan of C$19 million to Cline. The loan will be used to purchase New Elk Coal Company LLC ("New Elk") and its remaining coal resource properties in southern Colorado, U.S.A., and for general working capital purposes.

The MMI loan of C$19 million will bear interest at the rate of 6% per annum on the amounts outstanding and both principal and interest will be repayable by Cline within two years from the date Cline draws down the loan. The loan and interest will be secured by a charge on Cline's interest in New Elk and it assets. MMI may convert the loan into common shares of Cline, up to an aggregate maximum of 5,438,500 Cline common shares, at a conversion price of C$2.00 per Cline common share during the two year loan period. Cline will be entitled to repay the loan or portions of it at any time subject to MMI being given an opportunity to exercise its conversion right up to the maximum number of Cline common shares allowable, as mentioned above. In addition to the amount of C$10,877,000 which may be converted by MMI into 5,438,500 Cline common shares, MMI, from time to time, will also have the right, subject to disinterested shareholder and regulatory authority approval, to convert the balance of the C$19 million loan into common shares of Cline at the share market price at the time of conversion.

The Memorandum of Understanding also provides that Cline and MMI will enter into a coal marketing and sales agency agreement under which MMI will be the exclusive marketing and sales agent worldwide with respect to the sale of all New Elk coals.

The Memorandum of Understanding is subject to the approval of the Boards of Directors of both Cline and MMI and any necessary regulatory approvals. The Toronto Stock Exchange has accepted notice of the proposed transaction and has conditionally approved the issuance of the additional 5,438,500 common shares issueable thereto.

About Cline

Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coal in Canada and the U.S., iron ore in Madagascar, gold in Canada and holds a uranium investment in Madagascar.

CLINE MINING CORPORATION

Ken Bates, President and Chief Executive Officer

Forward Looking Information

All statements, other than statements of historical fact, contained in this news release, including any information as to the Company's current expectations with respect to the potential acquisition and future development of the New Elk Coal Properties, constitute "forward-looking information" within the meaning of applicable securities laws. Words such as "intend", "may", "will", "plan", "potential" or similar words suggesting future outcomes identifies forward-looking information, which is, by its very nature, not a guarantee of Cline's future operational or financial performance, and are subject to risks and uncertainties, both known and unknown, as well as other factors that could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking information made by, or on behalf of, the Company. Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking information or contribute to the possibility that predictions, forecasts or projections will prove to be inaccurate.

These factors include, but are not limited to: uncertainty related to the Company's title to its properties; liabilities inherent in coal mine development and production; geological, mining and processing technical problems; the Company's inability to obtain required mine licenses, mine permits and regulatory approvals required in connection with mining and coal processing operations; dependence on third party coal transportation systems; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; changes in commodity prices and exchange rates; changes in steel-making methods and other technological changes; the oversupply of, or lack of demand for, metallurgical coal; currency and interest rate fluctuations; various events which could disrupt operations and/or the transportation of coal products, including labour stoppages and severe weather conditions; the demand for and availability of rail, port and other transportation services; the other factors discussed under "Risk Factors" in Cline's 2007 Annual Information Form; and management's ability to anticipate and manage the foregoing factors and risks. Information relating to the magnitude or quality of mineral deposits is deemed to be forward-looking information. The reliability of such information is affected by, among other things: uncertainty of estimates of their size or composition; uncertainty of projections relating to costs or production, transportation or estimates of market prices for products; the possibility of delays in mining activities; changes in plans with respect to exploration, development projects or capital expenditures; and various other risks including those relating to health, safety and environmental matters. The Company cautions that the list of factors set forth above is not exhaustive. Some of the risks, uncertainties and other factors which negatively affect the reliability of forward-looking information are discussed in the Company's public filings with the Canadian securities regulatory authorities, including its most recent management information circular, annual report, quarterly reports, material change reports and news releases. Copies of the Company's Canadian public filings are available at www.sedar.com. The Company further cautions that information contained on, or accessible through, this website is current only as of the date of such information and may be superseded by subsequent events or filings. Except as required by applicable securities laws, the Company undertakes no obligation to update publicly or otherwise revise any information, including any forward-looking information, whether as a result of new information, future events or other such factors that affect this information.

Contact Information

  • Cline Mining Corporation
    Ken Bates
    CEO
    (647) 294-0102
    Email: cline@istar.ca