Tiomin Resources Inc.

Tiomin Resources Inc.

April 05, 2006 08:30 ET

Tiomin Buys Back Pangea's NPI on its Kenyan Mineral Sands Properties

TORONTO, ONTARIO--(CCNMatthews - April 5, 2006) - Tiomin Resources Inc. ("Tiomin" or the "Company") (TSX:TIO) is pleased to announce that it has entered into an agreement (the "Termination of Royalty Agreement") with Pangea Goldfields Inc. ("Pangea"), a subsidiary of Barrick Gold Corporation whereby Tiomin can buy back the 20% Net Profit Interest Royalty ("NPI Royalty") that Pangea holds on the mineral sands exploration licences of Kwale, Kilifi, Vipingo, and Mambrui in Kenya.

Pursuant to the terms of the Termination of Royalty Agreement, Tiomin has agreed to make a cash payment of US$2.0 million and issue 5 million common shares of the Company to Pangea at the date of closing, which is to be five business days after availability of drawdown on the project debt financing for the Kwale development project. If the closing date does not occur on or before September 27, 2006, the agreement will be terminated without payment, and Pangea's royalty interest will continue. Furthermore, Tiomin has agreed to make a cash payment of US$1.0 million, only if and when commercial production is reached, for each of the other properties (Kilifi, Vipingo, and Mambrui), or if Tiomin sells an interest in any such property to a third party. Pangea will have the right of first refusal on any sale of interest in the four properties mentioned above.

On April 4, 2006, Tiomin announced that it had appointed a syndicate of three financial institutions to arrange and underwrite a loan of US$120 million for the construction of the Kwale project. The Company has initiated the first phase of the resettlement program which involves 22 landowners located near the planned plant facility and the central dune deposit. Rehabilitation of the Koromojo water reservoir is also underway. Tiomin is expected to award the engineering, procurement and construction management (EPCM) contract in April and proceed with construction activities upon completing project financing.

Certain of the information contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those respect to the prices of rutile, zircon, ilmenite, estimated future production, estimated costs of future production, the Company's sales policy and permitting lines, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of rutile, zircon and ilmenite, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the Ontario Securities Commission.

Contact Information

  • Tiomin Resources Inc.
    Jean-Charles Potvin
    (416) 350-3776, ext. 227
    Tiomin Resources Inc.
    Bruce Ramsden
    Chief Financial Officer
    (416) 350-3776, ext. 232
    Tiomin Resources Inc.
    Laurie Gaborit
    Investor Relations
    (416) 350-3776, ext. 222