Timminco Limited
TSX : TIM

Timminco Limited

April 20, 2009 08:46 ET

Timminco Provides Update on Solar Grade Silicon Customers and Operations and Announces Proposed Financing and New President and Chief Operating Officer

TORONTO, ONTARIO--(Marketwire - April 20, 2009) - Timminco Limited ("Timminco" or the "Company") (TSX:TIM) announced today an update on its on-going discussions with solar grade silicon customers. These discussions have focused on alternatives to the existing contractual commitments, in the context of maintaining long-term relationships with customers in light of the challenging economic environment and market conditions affecting the solar industry.

In the course of these negotiations, some of the Company's solar grade silicon customers have asserted that their contracts have been terminated due to non-compliance. We are in active discussions with each of these customers with respect to their positions and the terms of future relationships, including quality, quantity and pricing for solar grade silicon. These customers have paid deposits, which were non-interest bearing pre-payments to be credited against future deliveries of solar grade silicon under the contracts. As described in more detail in the Company's financial statements and management's discussion and analysis, in the event of an early termination or completion of a supply contract without full utilization of the deposit amount, any remaining balance on the deposit is to be repaid to the customer within a specified time period.

Timminco also announced an update on its solar grade silicon production operations. For the first quarter of 2009, the Company shipped 131 metric tons (mt) of solar grade silicon. The average selling price for such shipments was $58 per kg, resulting in gross revenue of $7.6 million for this product line in the quarter.

Timminco is pursuing discussions with its controlling shareholder, AMG Advanced Metallurgical Group N.V. ("AMG"; Euronext: AMG), regarding it leading a potential equity offering for aggregate gross proceeds of $15.0 million. Such offering is expected to be by way of a private placement, with AMG subscribing for a minimum of 50%, and up to 100%, of the common shares that may be issued. Such offering would be subject to AMG's supervisory board approval, execution of definitive documents and receipt of all necessary regulatory approvals, including approval of the Toronto Stock Exchange. Clarus Securities Inc. has been appointed to represent the Company as the sole agent for this offering.

Timminco further announced the promotion of Mr. John Fenger, President - Light Metals, as the new President and Chief Operating Officer of Timminco. Most recently, Mr. Fenger was responsible for the restructuring of Timminco's magnesium business. Mr. Fenger spent most of his career at Elkem AS where he had most recently been Corporate Vice President and General Manager of that company's Foundry Market Division. In that position and as Senior Vice President of Elkem's Materials Division, Mr. Fenger had full responsibility for its silicon business as well as other metals businesses throughout the world. Mr. Fenger has had extensive experience in the solar industry as a co-founder and a Director of Renewable Energy Corporation, Norway (REC). Mr. Fenger has also served with Deloitte & Touche LLP as Director of International Business Consulting and with Allied Resource Corporation.

Dr. Heinz C. Schimmelbusch, Chief Executive Officer of Timminco, stated: "Mr. Fenger's performance in restructuring Timminco's magnesium business, formerly our primary operating division, exhibited his strong managerial skills and operating experience. He will significantly increase the depth of our management team."

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the common shares in the United States. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any other state securities laws and may not be offered or sold in the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Timminco

Timminco is a leader in the production of low cost solar grade silicon for the solar photovoltaic energy industry. Using its proprietary, patent pending technology, Timminco purifies silicon metal into solar grade silicon (also known as upgraded metallurgical silicon) for use in the manufacture of solar cells. Timminco also produces silicon metal, magnesium extrusions and other specialty metals for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding: discussions with solar grade silicon customers, including claims relating to termination of contracts and future relationships with such customers, repayment of deposits, the proposed equity offering, including gross proceeds therefrom and AMG's participation therein, and changes in Timminco's executive management. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies.
Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to: deteriorating global economic conditions; future growth plans and strategic objectives; liquidity risks; limitations under existing credit facilities; long-term contracts for supplying solar grade silicon; solar grade silicon production cost targets; selling prices of solar grade silicon and silicon metal; achieving and maintaining the purity of solar grade silicon; production capacity expansion at the Becancour facilities; pricing and availability of raw materials for the silicon business; customer capabilities in producing ingots; limited history with the solar grade silicon business; dependence upon power supply for silicon metal production; protection of intellectual property rights; government and economic incentives; closure of the magnesium facilities and the completion of related proposed transactions; cost and availability of magnesium metal; dependence upon key customers of magnesium extruded and fabricated products; credit risk exposure; customer concentration; equipment failures; labour disputes; foreign currency exchange; dependence upon key executives and employees; completion and integration of potential acquisitions, partnerships or joint ventures; risks with foreign operations and suppliers; environmental, health and safety laws and liabilities; transportation disruptions; conflicts of interest; interest rates; intellectual property infringement claims; new regulatory requirements; changes in tax laws; and climate change. These factors are discussed in greater detail in Timminco's Annual Information Form for the year ended December 31, 2008, and Timminco's most recent Management's Discussion and Analysis, each of which is available via the SEDAR website at www.sedar.com. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.

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