Timminco Limited

Timminco Limited

March 14, 2007 17:12 ET

Timminco Limited Announces Asset Impairment and Restructuring Charges

TORONTO, ONTARIO--(CCNMatthews - March 14, 2007) - Timminco Limited (TSX:TIM), a leading producer of specialty and light metals, today announced that its Board of Directors has approved asset impairment and restructuring charges as at December 31, 2006 amounting to $33.2 million relating to operations and assets utilized in its Magnesium business. These charges will be reflected in the consolidated financial statements of Timminco as at December 31, 2006. The Company will release its audited 2006 financial statements by the end of March.

The Company recognized an asset impairment charge of $25.1 million for a group of assets at the Haley, Ontario plant, $6.1 million for the Aurora, Colorado plant and the related spare parts at both facilities. The section of the Haley, Ontario plant determined to be impaired is that group of assets pertaining to the cast house and the specialty metals production equipment. The impairment resulted from lower volumes being processed through the Haley assets due to management's decision to source a significant volume of materials from lower cost foreign sources. The impairment at the Aurora facility resulted from decreased throughput as management has outsourced a portion of the production of semi-finished extrusions to lower cost foreign sources and the implementation of remote fabrication sites, such as the Company's Mexico facility, to lower costs and better service customers.

The restructuring charge of $2.0 million is related to the closure of certain activities at the Company's Haley facility and a reduction of headcount at the Company's Haley and Aurora facilities. The majority of these costs are in respect of severance and will be paid in 2007.

"The majority of these write-offs are non-cash items and as such does not materially impact the current or future cash flows of the Company" said Robert Dietrich, Executive Vice President and CFO. "We are pleased that during the restructuring we were supported by both our lenders and majority shareholder and now our operating businesses are well positioned to take advantage of market opportunities with a competitive cost structure."


This news release contains forward-looking statements concerning the Company's business and operations. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and the Company's actual results could differ materially from those expressed or implied in such statements.

There are financial and operational risks inherent in the business, which include, but are not limited to: commodity prices, currency exchange, interest rate, capital, credit, regulatory, political, operational and environmental risks. The Company takes specific measures to manage these risks, and any forward-looking statements in this news release were based on the assumption of no significant changes or trends with respect such risk factors. Although the Company maintains insurance against risks that are typical in its industry, such insurance may not provide adequate coverage under all circumstances. Reference should be made to the most recent Management Discussions and Analyses for a description of the major risk factors. The Company disclaims any duty to update forward-looking statements other than through relevant future Management Discussions and Analyses.


TIMMINCO LIMITED is an international company, a world leader in the production and marketing of alloy magnesium, silicon metal and specialty ferrosilicon, calcium and strontium alloys. The Company's products are used in a broad range of specialized industrial applications and industries such as engineered extruded products, chemical, pharmaceutical, electronics and automotive and metallurgical. The Company's common shares are traded on the Toronto Stock Exchange under the symbol TIM.

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Contact Information

  • Timminco Limited
    John Walsh
    President & CEO
    (416) 364-5171
    (416) 364-3451 (FAX)
    Email: jwalsh@timminco.com
    Timminco Limited
    Robert Dietrich
    Executive Vice President and CFO
    (416) 364-5171
    (416) 364-3451 (FAX)
    Email: rdietrich@timminco.com