Tiomin Resources Inc.

Tiomin Resources Inc.

June 02, 2006 09:00 ET

Tiomin Files Final Prospectus

TORONTO, ONTARIO--(CCNMatthews - June 2, 2006) -


Tiomin Resources Inc. ("Tiomin" or the "Company") (TSX:TIO) announced that it has filed a final prospectus with the securities regulators in all of the provinces and territories of Canada in connection with its previously announced public equity offering (the "Offering").

The Offering consists of 166,666,700 Subscription Receipts at a price of C$0.30 per Subscription Receipt for aggregate gross proceeds of C$50 million. The agents for the Offering have the option to increase the size of the Offering to up to 200,000,000 Subscription Receipts (C$60 million). Each Subscription Receipt will entitle the holder to acquire, for no additional consideration, one Common Share and one-half of one Series O common share purchase warrant of Tiomin (each whole Series O common share purchase warrant a "Warrant"). Each Warrant shall entitle the holder to acquire an additional common share at a price of C$0.36 per common share for a period of 18 months from the date of issuance of the Subscription Receipts.

The Offering is expected to close on or about June 7, 2006. The agents for the Offering are Wellington West Capital Markets Inc., Paradigm Capital Inc. and Jennings Capital Inc.

The Subscription Receipts have been conditionally approved for listing on the Toronto Stock Exchange (TSX) under the stock symbol "TIO.R" and are expected to commence trading on closing of the Offering. The Company has also received conditional approval for listing the Series O common share purchase warrant upon closing of the Offering.

The gross proceeds of the Offering will be deposited with and held in escrow pending satisfaction of certain release conditions (the "Release Conditions"), including in particular the finalization and availability of Tiomin's previously announced senior debt facility in the amount of US$120 million and subordinated debt facility in the amount of US$35 million. If the Release Conditions are satisfied on or before July 31, 2006, the Subscription Receipts will be automatically exercised into common shares and Warrants and the escrowed funds will be released to the Company. If the Release Conditions are not satisfied on or before July 31, 2006, holders of Subscription Receipts will have the right to require Tiomin to redeem their Subscription Receipts for the issue price plus accrued interest, and the escrowed funds will be used to satisfy the redemption price for the Subscription Receipts which are redeemed.

The Company recently signed a mandate with three financial institutions to arrange and underwrite a debt facility of US$120 million. In addition, the Company has finalized terms with the Jinchuan Group Ltd. ("Jinchuan") for a US$35 million subordinated debt facility, subject to approval by the TSX and shareholders of the Company. Tiomin also recently closed a private placement of C$7.4 million with Jinchuan, who now holds approximately 9.9% of Tiomin's outstanding common shares. These funds combined with the proceeds of the Offering will be used mainly to complete the US$176 million project financing requirements for the construction and startup of the Kwale titanium mineral sands project in Kenya. The remaining funds will be used for payment of financing costs associated with the senior debt facility (estimated at US$20 million, including pre-production interest), termination of the Kenyan properties royalty interest, exploration work at its other titanium mineral sands properties and at its advanced-stage Pukaqaqa copper-gold project in Peru, and general corporate purposes.

The securities being offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States.

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