Iberian Minerals Corp.
TSX VENTURE : IZN

Iberian Minerals Corp.

December 15, 2008 09:20 ET

Iberian Closes Aguas Tenidas Hedge Contracts And Pays Out MATSA Project Facility

TORONTO, ONTARIO--(Marketwire - Dec. 15, 2008) - Iberian Minerals Corp. (TSX VENTURE:IZN) ("Iberian" or the "Corporation") announces that it has closed out the hedge contracts required pursuant to the terms of the US$210 million Aguas Tenidas Project (the "Project") financing lead by Investec Bank (UK) Limited, BNP Paribas and Societe Generale (the "Facility"), as originally announced on June 2, 2008. The close out resulted in net proceeds of approximately US$225 million which have been used to fully pay out US$159.9 million that had been drawn down from the Facility. Project completion is fully funded from the remaining proceeds which are estimated at US$65 million.

The Project is now debt free and all banking covenants and restrictions have now been terminated, thereby affording the Corporation greater flexibility in dealing with the Project on an on-going basis.

Mr Daniel Vanin, President and CEO of Iberian said: "By monetizing the hedge position we have eliminated this project finance liability from the company. We have been able to take advantage of our existing hedge position and the recent fluctuating prices of metals in the market. This opportunity to pay out the MATSA Facility was unique, and is a tremendous benefit to our company and shareholders".

Iberian has now developed and implemented an interim hedging programme in support of continued operations at the Project. Iberian has arranged for MATSA to enter into short term commodity hedging arrangements for the Project (the "Short Term Arrangements") as follows:

(a) 17,450 mT of copper hedged for January 2009 to June, 2010 at an average price of US$3,673 per tonne; and

(b) 9,100 mT of zinc hedged to June 2009 at an average price of US$1,159 per tonne.

The Short Term Arrangements have been based on the targetted 1.7MT production rate at the Project, taking into account start-up and ramp up considerations.; Actual results will depend on many factors, including a decision on the timing of the commissioning of the polymetallic zinc/lead circuit. The counterparty to the Short Term Arrangements is Trafigura Beheer, B.V ("Trafigura"), and the terms are reasonable commercial terms.

In addition, Iberian is considering arranging for a Euro currency hedge based on 2009 Euro denominated costs for the Project. Iberian will continue to monitor and review hedging requirements and opportunities for the Project, and depending on all circumstances including the mine plan, actual results, and economic and market conditions from time to time, amend or change all or any of the Corporation's then outstanding commodity or currency positions.

Pursuant to Multilateral Instrument 61-101 ("MI 61-101"), the entering into of the Short Term Arrangements is a "related party transaction" as Trafigura currently holds 105,420,691 Common Shares representing approximately 41.5% of the issued and outstanding shares of the Corporation. Iberian is exempt from the formal valuation requirement of MI 61-101 in connection with entering into of the Short Term Arrangements in reliance on section 5.5(b) of MI 61-101 as no securities of the Corporation are listed or quoted for trading on the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock market or a stock exchange outside of Canada and the United States.

Additionally the Corporation is exempt from obtaining minority shareholder approval in connection with entering into of the Short Term Arrangements in reliance on section 5.7(1)(f) as the Short Term Arrangements are on reasonably commercial terms that are not less advantageous to the Corporation than if the credit facility were obtained from an arm's length party; the Short Term Arrangements are not convertible into common shares; and no amount is payable in common shares of the Corporation.

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian-based global copper and zinc company with developing and producing 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 a copper-zinc project in the Andalucia region of Spain approximately 110 km north-west of Seville. Construction is nearing completion on a 1.7 million tonnes per year underground mine and concentrator (1.5 million tonnes during ramp up) that will produce copper and zinc concentrates that also contain gold, silver and lead.

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 management information circular of Iberian dated November 20, 2007 and in the annual Management's Discussion and Analysis 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.

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

Contact Information

  • Iberian Minerals Corp.
    Victoria Vargas, Vice President Investor Relations
    and Corporate Communications
    (416) 815-8558