Consolidated Thompson Iron Mines Limited
TSX VENTURE : CLM

Consolidated Thompson Iron Mines Limited

June 06, 2007 11:09 ET

Consolidated Thompson Announces Purchase of Majority Interest in Wabush Mines Joint Venture

TORONTO, ONTARIO--(Marketwire - June 6, 2007) - Consolidated Thompson Iron Mines Ltd. (TSX VENTURE:CLM) ("CLM" or the "Company") is pleased to announce that it has entered into an agreement with Cleveland-Cliffs Inc and Stelco Inc. to acquire a 71.4% interest in the Wabush Mines joint venture for a purchase price of US$64.3 million plus 3.0 million common share purchase warrants (the "Acquisition"). Each common share purchase warrant will entitle the holder thereof to acquire one CLM common share for a period of two years from issue at a price of CDN$5.10 which is the closing price of the common shares of CLM on June 5, 2007. The boards of directors of each of Cleveland-Cliffs and Stelco have conditionally accepted this offer, subject to the purchase option of Dofasco Inc. discussed below. In connection with the Acquisition and assuming that Dofasco does not exercise its purchase option, CLM will enter into an off-take arrangement with Cleveland-Cliffs and Stelco from closing until December 2009 in respect of a portion of their pro rata share of the 4.8 million tonnes committed annual Wabush Mines pellet production. CLM is currently in discussions with other international off-take partners and it is confident that definitive agreements can be reached in the near term.

The Wabush Mines joint venture is comprised of integrated assets including the Scully Iron Ore Mine, Point-Noire pelletizing facilities, harbour and port facilities at Sept-Iles, integrated railway facilities and other related assets situated near Wabush, in Newfoundland and Labrador and Quebec. Current annual capacity of the Wabush Mines is approximately 4,800,000 metric tonnes of pellets.

The transaction, if accepted, would be beneficial to all parties. CLM would continue to develop Bloom Lake with a number of operational and financial benefits, including:

- Transforming CLM into an integrated producer immediately

- Improving development timeline of Bloom Lake

- Establishing off-take relationships

- Operational synergies between Wabush and Bloom Lake

- Strong financial accretion from year 1

Assuming completion of the acquisition, CLM would upgrade the milling facilities at Wabush to produce high quality iron ore concentrate from the Bloom Lake Iron Ore Deposit and the Scully Mine at a rate exceeding 8.0 million tonnes per year. CLM would also upgrade the pelletizing facilities at Pointe Noire to process part of this concentrate and produce high quality pellets in excess of 5.0 million tonnes per year.

CLM's development of Bloom Lake is advancing with the commencement of production now targeted for Q1 2009. CLM believes that the close proximity, extensive infrastructure of the Wabush Mines assets and experienced workforce will accelerate the development of the Bloom Lake Deposit through the use of shared facilities, access to transportation and port facilities as well as streamline permitting requirements.

Commenting on the proposed acquisition, Richard Quesnel, President and Chief Executive Officer of CLM, said: "While a standalone Bloom Lake project is extremely financially robust as evidenced by the results of our recent 7 million tonnes per year feasibility study and the signing of a Memorandum of Understanding with a major China-based trading company for the long-term supply of iron ore concentrate; the proposed acquisition offers CLM the opportunity to have an integrated operation with immediate financial results and substantial operational synergies. As a result, we are very confident that this acquisition would represent immediate added value to our shareholders."

Bruce Humphrey, Chairman of CLM, stated: "Since entering into discussions with the owners of Wabush Mines in late 2006, we have had the opportunity to perform extensive due diligence, including technical and engineering reviews as well as consultation with the Governments of Newfoundland and Labrador and Quebec and the employees of Wabush Mines. This potential Acquisition combined with an expansion at Bloom Lake would generate sustainable development in the area, benefit our regional economies and enhance shareholder value."

Completion of the Acquisition is subject to a number of conditions, including receipt of requisite regulatory approval, including without limitation, the acceptance of the TSX Venture Exchange and the execution of definitive agreements. Completion of the Acquisition is conditioned upon a 90 day purchase option that may be exercised by Dofasco Inc., a subsidiary of Mittal Steel Company N.V., the remaining partner of the Wabush Mines joint venture. If Dofasco exercises this purchase option, the Acquisition will not occur. Otherwise, closing is expected to occur shortly after the waiver or expiry of the purchase option. Cleveland-Cliffs and Stelco have granted CLM exclusivity rights with respect to the Wabush Mines joint venture assets during the term of the agreement except for any third party in respect of discussions or negotiations to acquire all shares or assets of Cleveland-Cliffs or Stelco.

Orion Securities Inc. is acting as financial advisor to Consolidated Thompson. Cassels Brock & Blackwell LLP is acting a legal advisor to Consolidated Thompson.

About Consolidated Thompson

CLM holds the Bloom Lake Iron Ore Property which is located in the Normanville Township, Duplessis County, Province of Quebec, on the south end of the Labrador Trough (approximately 400 km north of Sept-Iles). The Bloom Lake deposit is situated approximately 10 km north of the Mount-Wright iron ore mining operation of Quebec Cartier Mining Company.

Consolidated Thompson Iron Mines Ltd. is an exploration and development company. Further information is available at www.consolidatedthompson.com.

Forward Looking Information

Certain statements contained in this news release may contain forward-looking information within the meaning of Canadian securities laws. Such forward-looking information are identified by words such as "estimates", "intends", "expects", "believes", "may", "will" and include without limitation, statements regarding the Company's plan of business operations; ability to negotiate and enter into definitive agreements regarding the acquisition; waiver, or exercise by third parties of their purchase option; potential benefits of the acquisition; the costs and timing associated with integrating the acquisition; production levels, timing and costs; potential contractual arrangements and the delivery of equipment; receipt of working capital; anticipated revenue; mineral reserve and resource estimates; and projected expenditures. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from such statements. Factors that could cause actual results to differ materially include, among others, metal prices, third party risks, acquisition risks, risks inherent in the mining industry, financing risks, regulatory risks and environmental concerns. Most of these factors are outside the control of the Company. Investors are cautioned not to put undue reliance on forward-looking information. Except as otherwise required by applicable securities statutes or regulation, the Company expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.

Consolidated Thompson Iron Mines Limited is an exploration and development company. The Company has approximately 37.6 million shares outstanding and trades on the TSX Venture exchange under the symbol (CLM).

THE TSX VENTURE EXCHANGE HAS NOT PASSED ON THE PROPOSED ACQUISITION AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OF ACCURACY OF THIS RELEASE

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