Iberian Minerals Corp.

Iberian Minerals Corp.

November 28, 2007 16:53 ET

Iberian Minerals Mails Compania Minera Condestable Acquisition Information Circular and Enters Into Definitive Agreements

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2007) - Iberian Minerals Corp. ("Iberian" or the "Company") (TSX VENTURE:IZN) is pleased to announce that it has mailed to shareholders a Management Information Circular in respect of the proposed acquisition (the "Acquisition") of approximately 92% of the issued and outstanding shares of Compania Minera Condestable S.A. ("CMC") from Trafigura Beheer B.V. ("Trafigura"), as previously announced on September 19, 2007. CMC is the owner and operator of a copper/gold property located 90 km south of Lima, Peru which has been in continuous production under Trafigura's ownership since 1998. The acquisition of CMC will transform Iberian into an immediate copper producer and provide immediate cash flow to complete the Company's development of the Aguas Tenidas Project located in Spain.

In connection with the Acquisition, the Company has entered into a definitive share purchase agreement dated November 20, 2007 (the "Acquisition Agreement") with Trafigura pursuant to which the Company will purchase all of the issued and outstanding shares of Urion Worldwide Investments Limited ("Urion"), a wholly-owned subsidiary of Trafigura, and the holder of approximately 92% of the issued and outstanding shares of CMC. As partial consideration for the Acquisition, the Company will issue to Trafigura, 65,990,833 common shares in the capital of the Company ("Common Shares") at a deemed price of $1.80 per Common Share for a deemed aggregate issue price of US$115 million (exchange rate of US$1.00 = $1.0329). Trafigura has also been granted a 46% net operating profit ("NPI") of CMC for a term of four years commencing January 1, 2011 payable in cash or, at the option of Trafigura and subject to regulatory approval, including the approval of the TSX Venture Exchange, in Common Shares. The Acquisition is a non-arms' length transaction as Trafigura is a related party of Iberian, currently holding approximately 21% of the issued and outstanding capital of Iberian.

The Company has also entered into a definitive credit agreement dated November 20, 2007 (the "Loan Facility") with Trafigura, for a $20 million unsecured loan facility bearing interest at LIBOR + 1%. The Loan Facility provides for drawdowns in minimum amounts of $500,000 which will only be available if the Company has insufficient funds (less than $10 million cash on hand) and shall be used for the development of the Aguas Tenidas Project. In the event that the Company has any excess cash on hand, it is required to immediately make payments in respect of the outstanding amount under the Loan Facility. Trafigura may agree, on request by the Company, to provide up to $60 million of additional financing to the Company on the same terms as the Loan Facility.

On closing of the Acquisition, Trafigura will enter into a registration rights agreement pursuant to which the Company shall grant Trafigura the right to nominate 3 of 7 directors to Iberian's Board of Directors, in addition to certain registration rights, piggy-back rights and pre-emptive rights, based on the percentage of Common Shares held by Trafigura. Trafigura will also be subject to restrictions on its ability to dispose, sell or encumber any Common Shares representing more than 20% of the issued and outstanding share capital of the Company.

The Board of Directors of Iberian, including members of the Special Committee, received an opinion from its financial advisor, Orion Securities Inc., that the acquisition is fair from a financial point of view to the shareholders of Iberian, other than Trafigura (in respect of whom no opinion was provided) and are recommending that shareholders approve the Acquisition. The Acquisition is conditional upon, among other things, the approval of the majority of votes cast by Iberian's minority shareholders at the shareholders' meeting and the approval of the TSX Venture Exchange. The Iberian shareholders' meeting will be held on December 19, 2007 in Toronto, Ontario and the Acquisition is expected to close on or before January 30, 2008. Upon completion of the Acquisition, Trafigura will hold approximately 42% of the issued and outstanding Common Shares, Urion will be a wholly-owned subsidiary and CMC will be a 92% owned subsidiary of Iberian. Further details of the transaction can be found in the Management Information Circular of Iberian, as filed on SEDAR at www.sedar.com.

Shareholders are cordially invited to attend the Iberian shareholders' meeting on December 19, 2007 which will be held at the Toronto Board of Trade in Toronto, Ontario at 10:00 a.m. EST. Shareholders are encouraged to complete and return the proxy or voting instruction form included with the Management Information Circular as soon as possible in order to cast their vote on the proposed transaction. The proxy or voting instruction form has instructions on how to complete and return the proxy or voting instruction form, as applicable along with the deadlines for submission. If you have any questions on how to complete and return the proxy or voting information form, please contact the Company's proxy solicitation agent, Georgeson Inc. at 1.888.605.8405.

The Board of Directors of Iberian has determined that the Acquisition is fair and in the best interest of Iberian shareholders and recommends that Iberian shareholders vote in favour of the Acquisition.

Orion Securities Inc. acted as the sole financial advisor to Iberian and Cassels Brock & Blackwell LLP acted as Iberian's legal advisor. Stikeman Elliott LLP acted as legal advisor for Trafigura.

About Iberian Minerals Corp.

Iberian is a company engaged in the business of exploring for, with the ultimate goal of developing and producing, base metals. Iberian is a corporation amalgamated under the Business Corporations Act (New Brunswick) and subsequently continued under the laws of Canada pursuant to the provisions of the CBCA. The Corporation's registered office and head office is located at 366 Bay Street, Suite 1100, Toronto, Ontario, M5H 4B2.

Iberian, through its wholly owned subsidiary MATSA, is the owner of the Aguas Tenidas Project, which is a 100% owned copper/zinc property located in the Region of Andalucia, Spain, comprising investigation permits and mining concessions covering 222.6 km2 of land. On January 20, 2006 the Corporation announced that a feasibility report on the Aguas Tenidas Project had been completed by SRK Consulting of Cardiff U.K. demonstrating the technical feasibility and economic viability of the project. Elements of the feasibility report were subsequently updated by Adam Wheeler and RSG Consulting Pty Ltd., as announced by Iberian on May 22, 2007. The Corporation, through MATSA, also holds an extensive land position of exploration properties within the Iberian Pyrite Belt. Iberian has signed a life-of-mine offtake agreement with Trafigura for the sale of all its metal concentrates from the Aguas Tenidas Project.

About Trafigura Beheer B.V.

Trafigura Beheer B.V. is one of the largest independent commodities traders worldwide, employing over 1,500 people operating 50 offices in 36 countries. Trafigura is a privately owned company, incorporated under the laws of the Netherlands. Trafigura is the second largest base metal trader and the third largest independent oil trader in the world. Trafigura currently holds 39,429,858 Common Shares, representing approximately 21% of the issued and outstanding Common Shares as at November 1, 2007 and on closing of the Acquisition will hold 105,420,691 Common Shares representing approximately 42% of the issued and outstanding Common Shares.


This news release contains certain "forward-looking statements" and "forward-looking information" under applicable securities laws concerning Iberian's transactions with Trafigura. 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 transactions will be completed, that all required third party regulatory, governmental and shareholder approvals for transactions will be obtained and all other conditions to completion of the transactions will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of Iberian or Trafigura 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 the Iberian shareholders failing to obtain minority shareholder approval in respect of the Acquisition, failure to reach definitive agreements in respect of the contemplated transactions, as well as changes in market conditions and other risk factors discussed or referred to in the annual Management's Discussion and Analysis for Iberian and the Management's Information Circular, both of which have been filed with the applicable securities regulatory authorities and are 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.
    Peter Miller
    (416) 815-8588
    Iberian Minerals Corp.
    Norman Brewster
    (416) 815-8588