VANCOUVER, BRITISH COLUMBIA - (AccessWire) - October 15, 2013 - Nevada Clean Magnesium, Inc. (TSXV: NVM; Frankfurt-M1V; OTC Pink Sheets: MLYFF) (the "Company") today announced that the Company has entered into a Binding Letter of Agreement ("BLA") with ScanMag AS, a Norway-based industrial minerals company, to form a new joint venture ("JV") partnership providing for the companies to collaborate on and mutually benefit from the development of their respective high quality dolomite deposits to produce magnesium metal for the North American and European industrial markets.
Both Companies are actively engaged in greenfield projects involving the development of high quality deposits of dolomite, the key mineral used in the production of magnesium. ScanMag, which is jointly owned by Normin Mine AS and Mel?y Naeringsutvikling AS, is focused on developing its significant dolomite deposit located in the Granasen field not far from Glomfjord in Nordland County, Norway; and Nevada Clean is concentrating on developing its 100%-owned dolomite assets on its Tami-Mosi property in north central Nevada. Recognizing that their respective project development plans share a series of commonalities and defined production metholodologies, the Companies have determined that there is significant benefit to establishing a joint venture that will allow them to eliminate potential redundancies, identify and avoid potential pitfalls and share and capitalize on technical knowledge gained from the advancement of each project.
Specifically, the key terms and conditions of the BLA provide for:
- The formation of a joint venture, wherein Nevada Clean will own a 51% controlling stake and ScanMag will own 49% of the Company's Nevada dolomite deposit;
- ScanMag to pay $5 million USD in cash consideration to Nevada Clean;
- ScanMag to issue Nevada Clean a 5% equity stake in ScanMag;
- Nevada Clean to issue ScanMag restricted shares of its common stock equal to 19% of the total number of shares of common stock issued and outstanding at the time the letter agreement was signed; and
- ScanMag to have the right to appoint one representative to Nevada Clean's Board of Directors and retain this Board seat so long as it maintains at least 15% equity ownership in the Company.
The formation of the Joint Venture is expected to be completed on or before January 31, 2014, subject to ScanMag closing on an expected $30 million project financing and the approval of the TSX Venture Exchange.
Lothar Maruhn, Chairman of ScanMag, stated, "Since first learning of Nevada Clean's Tami-Mosi magnesium metal project earlier this year, we have come to greatly respect and value the depth of technical knowledge and industry experience that Nevada Clean brings to the table. Moreover, we have been duly impressed by the quality and scope of its dolomite assets in Nevada and its innovative thermal reduction approach to extracting magnesium economically with limited environmental impact. This new JV partnership represents an exciting opportunity for both our companies to combine and leverage our resources to accelerate our respective development efforts and greatly benefit as a result."
Edward Lee, Nevada Clean's Chairman and CEO, added, "We are very pleased to welcome ScanMag as our partner in the Tami-Mosi project and as a major shareholder of our Company; and we are looking forward to lending our support and technical expertise to their project in Norway. This represents a defining milestone for our Company, and one that puts us on track to create significant value for our shareholders in the coming years."
About ScanMag AS
ScanMag AS is an industrial minerals company headquartered in Glomfjord, a village in the municipality of Mel?y just north of the Arctic Circle on Norway's west coast. The Company was jointly formed by Normin Mine AS and Mel?y Naeringsutvikling AS in 2012 to develop a large deposit of high quality dolomite, situated in the Granasen field outside Mosj?en, near Glomfjord and is comprised of both dolomite and brucite. Mel?y Naeringsutvikling AS is jointly owned by the municipality of Mel?y in Nordland County; Yara Norway ASA, a subsidiary of one of the world's leading chemical company; Sparebank 1 Nord-Norge, a banking group that has served North Norway since 1836; and DNB Bank, Norway's largest financial services group. These Companies have teamed to capitalize on northern Norway's wealth of environmental resources to create new jobs, expand industrial infrastructure and promote global trade. www.mnu.no
About Nevada Clean Magnesium, Inc.
Nevada Clean Magnesium is focused on becoming a major U.S. producer and distributor of primary, high grade, low cost magnesium extracted from its 100% owned Tami-Mosi property located in North Central Nevada. Based on the Company's NI 43-101 Preliminary Economic Assessment Report published in late 2011, the Tami-Mosi Project has an inferred resource of 412 million tonnes with an average grade of 12.3% Mg for a contained metal content of 111 billion pounds of magnesium using a 12% cut-off grade contained within a high purity dolomite block. For more information, please visit www.nevadacmi.com.
This news release was read and approved by James Sever, P.Eng, a qualified person recognized under NI 43-101.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements in this news release include statements about the entering into a joint venture, the closing of a private placement, that we can create significant value for our shareholders, and that Nevada Clean Magnesium can become a major magnesium producer and supplier.
Actual results may differ materially from those currently anticipated due to a number of factors, including those beyond the Company's control. These risks and uncertainties include, among other things, that we may not be able to agree on final terms with ScanMag, that we may not be able to obtain regulatory approval, that we may not be able to raise funds required, that conditions to closing may not be fulfilled, that the Company's dolomite reserves may not mined because of technical, regulatory, financing or other obstacles, the market price for magnesium may make our resources uneconomic, and other risks associated with being a mineral exploration and development company. These forward-looking statements are made as of the date of this news release and, except as required by applicable laws, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.
Kathy Addison, Chief Operating Officer
- Commodity Markets
- TSX Venture Exchange