Iberian Minerals Corp.

Iberian Minerals Corp.

October 20, 2006 16:26 ET

Iberian Minerals Corporation: Pre-Emptive Rights Exercised by Dundee Resources Limited and Trafigura Beheer B.V.

TORONTO, ONTARIO--(CCNMatthews - Oct. 20, 2006) - Iberian Minerals Corporation (TSX VENTURE:IZN) Iberian Minerals Corp. (the "Company") has been advised by Dundee Resources Limited ("Dundee Resources") and Trafigura Beheer B.V. ("Trafigura") that both parties intend to exercise certain pre-emptive rights to purchase additional Special Warrants of the Company as follows.

Dundee Resources has informed the Company it will be purchasing 2,846,154 Special Warrants of IZN at $1.30 per Special Warrant, for a total additional investment of $3,700,000. Each Special Warrant is comprised of one one common share of the Company (a "Share"), one-quarter of one series 1 common share purchase warrant (the "Series 1 Warrant") and one-quarter of one series 2 common share purchase warrant (the "Series 2 Warrant"). Each whole Series 1 Warrant will entitle the holder at any time for a period of two years from the date of issuance thereof (the "Initial Exercise Period") to acquire one Share at an exercise price of C$2.20. Each whole Series 2 Warrant will entitle the holder at any time for a period of two years from the date of issuance thereof to acquire one Share at an exercise price of C$2.60. Notwithstanding the foregoing, each whole Series 2 Warrant is exercisable by the holder for an additional two years from the last day of the Initial Exercise Period if, during the Initial Exercise Period, the Company becomes classed as a Tier 1 Company on the TSX-V, lists on the Toronto Stock Exchange or is otherwise permitted by applicable regulations to issue common share purchase warrants exercisable for four years.

Trafigura has informed the Company it will be purchasing 560,000 Special Warrants of IZN at $1.30 per Special Warrant, for a total additional investment of $728,000, on the same terms as those stated above.

This represents an investment in the Company by Dundee Resources and Trafigura of $4,428,000.

Upon closing, the gross proceeds of the issuance and sale of the Special Warrants (the "Escrowed Proceeds") will be held in escrow. The Escrowed Proceeds (and accrued interest) will be automatically released to the Company only upon (i) the Company's Spanish subsidiary receiving the permit from the applicable Spanish authorities for Ampliacion de la actividad en Mina de Aguas Tenidas con la Construccion de una Planta de Tratamiento de Mineral y un Deposito de Esteriles (Expansion of the activity at Aguas Tenidas Mine with a Construction of an Ore Treatment Plant and Tailings Deposit) and (ii) the issuance of 30,000,000 common shares pursuant to previously issued instalment receipts (the "Escrow Release Condition"), all on terms and conditions satisfactory to the Purchaser, acting reasonably. The Special Warrants will be exercisable by the holders thereof at any time and will be automatically exercised (without any further action by the holders thereof) concurrently with the satisfaction of the Escrow Release Condition. If the Escrow Release Condition is not satisfied on or prior to December 31, 2006 (the "Deadline Date"), the Escrowed Proceeds plus accrued interest shall be used by the Company to repurchase the outstanding Special Warrants for cancellation at a price (the "Redemption Price") equal to the issue price thereof, plus the interest accrued on the Escrowed Proceeds.

This Special Warrant placement is expected to close by October 30th, 2006 and is subject to regulatory approval.

About Iberian Minerals Corp.

Iberian Minerals Corp. through its wholly owned subsidiary MATSA is currently proceeding with the re-opening of the Aguas Tenidas copper/zinc project located in the Region of Andalucia, SW Spain. In January this year, a feasibility report on the project was prepared by SRK Consulting of Cardiff UK, which demonstrated the technical feasibility and economic viability of the project (press release Jan. 20th, 2006). The project has sufficient reserves for a 13 year operating life at a production rate of 1.60 million tonnes annually. The Company has also signed a long term offtake agreement with Trafigura Beheer AG for the sale of all its metal concentrates from Aguas Tenidas.

The Company is in the process of arranging US$168.2 million financing package for the project through a combination of project bank debt, subordinated debt, and equity. Construction is expected to begin in the fourth quarter of 2006, with initial commercial production of metal concentrates commencing in 2008.

In addition to the Aguas Tenidas project the Company, through MATSA, holds an extensive land position of exploration properties within the Iberian Pyrite Belt.

Iberian Minerals Corp. trades on the TSX-V under the symbol IZN, as of October 18th, 2006 there were 131,562,614 shares issued and outstanding.

This press release includes certain "Forward-Looking Statements" within the meaning of the US Private Securities Reform Act of 1995. Other than statements of historical fact, all statements are "Forward-Looking Statements" that involve such various known and unknown risks, uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "Forward-Looking Statements". All dollar amounts are in Canadian dollars unless otherwise noted.

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

Contact Information

  • Iberian Minerals Corporation
    Peter Miller or Norm Brewster
    (416) 815-8558