Weda Bay Minerals Inc.

Weda Bay Minerals Inc.

September 26, 2005 16:51 ET

Weda Bay Retires OMG Debt-Product Supply Agreement Cancelled

TORONTO, ONTARIO--(CCNMatthews - Sept. 26, 2005) - Weda Bay Minerals Inc. (TSX:WDA) (the "Company") today announced that the Company has fulfilled its remaining obligations to OM Group Inc. (OMG) through the payment of US$2.5 million which has resulted in the cancellation of the Product Supply Agreement (PSA).

Under the revised agreement with OMG, Weda Bay Minerals has paid US$2.5 million to OMG and also granted OMG the right to annual payments equivalent to a 1 percent net smelter royalty (NSR). In return, OMG has canceled the Company's outstanding US$10.5 million debt as well as the Product Supply Agreement (PSA). Under the revised agreement, Weda Bay retains the right to buy back the "annual payments" for a one time payment of US$20 million.

Commenting, Weda Bay President and CEO, Patrick Evans, said: "The retirement of the OMG debt and cancellation of the Product Supply Agreement marks a critical turning point for our Company as we seek to maximize shareholder value. We are now in position to move aggressively towards a decision to build at the Halmahera Nickel/Cobalt Project. In the near term this implies the commencement of a definitive feasibility study and exploring potential relationships with industry majors."

Weda Bay Minerals Inc. is an exploration and development company that controls the Halmahera Nickel Cobalt Project which is globally one of the largest undeveloped nickel projects. The project resources are 155 million tonnes grading 1.45% Ni and 0.09% Co of measured and indicated resources plus 123 million tonnes grading 1.53% Ni and 0.08% Co of inferred resource. Resource estimates are at a cutoff grade of 1.0% Ni. The Company has completed an independent Pre Feasibility Study which concludes that the Halmahera project is highly viable.

Shares Issued and Outstanding: 52,937,535

Contact Information

  • Weda Bay Minerals Inc.
    Mr. Patrick Evans
    President and CEO
    (416) 603-0591
    Weda Bay Minerals Inc.
    Mr. Ian Shaw
    Investor Relations
    (416) 603-0591
    (416) 367-3638 (FAX)