COEUR D'ALENE, ID, Sept. 15 /CNW/ - WGI Heavy Minerals, Incorporated
(WGI) (TSX: WG) today announced that it has completed the sale of its
investment in Transworld Garnet India (Pvt) Limited (TGI). The sale consists
of WGI's 74% equity interest in TGI and the repayment of debt financing.
WGI has repatriated from India US $4.85 million in cash for its 74%
equity interest in TGI. In addition, WGI has repatriated US $10.0 million in
debt financing by obtaining repayment of certain external commercial
borrowings ("ECB loans") from TGI. Due to the lengthy process involved in
obtaining approval from the Reserve Bank of India for the repayment of ECB
loans, WGI incurred exchange losses of approximately US $1.14 million on the
sale proceeds from the time the funds were deposited in an escrow account on
August 14, 2008 by the buyer of its investment in TGI and the release of the
funds on September 12, 2008. During this period the Rupee weakened
significantly against the US Dollar. A further Rupees 28.7 million
(approximately US $625,000) remain in an escrow account in India which funds
will be used to repay additional debt financing owed to WGI. The repayment of
the remaining debt is also subject to approval by the Reserve Bank of India.
The sale marks the beginning of WGI's three-year distribution agreement
with V.V. Mineral covering garnet, ilmenite and other minerals that may be
present in the beach sands mined by V.V. Mineral. The agreement provides WGI
with an assured minimum supply of 60,000 metric tons of garnet annually, which
is a significant increase over current production rates. Garnet grades and
quality levels will be consistent with material currently supplied to WGI by
TGI, and additional quantities of garnet will be supplied as V.V. Mineral's
capacity expands. In addition, WGI will act as a broker for the sale of V.V.
Mineral's ilmenite products.
"The regular and predictable supply of garnet through our new
distribution agreement with V.V. Mineral gives WGI's operations the potential
for growth in our core business, mineral distribution," said Greg Emerson,
Chief Executive Officer of WGI. "The agreement makes us stronger
strategically, allowing us to leverage the strength of our alliance with V.V.
Mineral and the proven success they have had in producing garnet and other
heavy minerals in India" added Emerson.
With the successful sale of WGI's Indian assets, the terms of the
employment contract of Mr. Covell D. Brown, WGI Chairman, are fulfilled and
Mr. Brown has therefore ceased to be Chairman of the WGI Board. He continues
as a Director.
WGI Heavy Minerals, Incorporated is a marketer of industrial grade
minerals sourced primarily out of India, producer of industrial-grade garnet
out of Idaho and Germany and manufacturer of replacement parts for ultra-high
waterjet cutting systems in the U.S. The Company's shares are listed on the
Toronto Stock Exchange under the symbol WG.
This press release contains forward-looking statements concerning the
business, operations, and financial performance and condition of WGI Heavy
Minerals, Incorporated. A number of the matters discussed and statements made
in the press release contain forward-looking statements reflecting current
expectations regarding future assets. When used in this press release, the
words "believe", "anticipate", "intend", "estimate", "expect", "project", and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain such words. These
forward-looking statements are based on current expectations and are naturally
subject to risks, uncertainties, and changes in circumstances beyond
management's control that may cause actual results to differ materially from
those expressed or implied by such forward-looking statements. Factors that
may cause such differences include but are not limited to: exploration and
development risks; risks related to permits and title to property; risks
related to foreign countries and regulatory requirements; operating hazards;
foreign currency fluctuations; competition; fluctuations in the market price
of mineral commodities and transportation costs; uncertainty as to
calculations of mineral deposit estimates; uninsured risks; and dependence
upon key management personnel and executives. Actual results may differ
materially from those expressed here. You should not place undue reliance on
such forward-looking statements. The Company is under no obligation to update
or alter such forward-looking statements, whether as a result of new
information, future events, or otherwise.
For further information:
For further information: Ed Kok, Investor Relations, 810 Sherman Ave.,
Coeur d'Alene, ID, 83814, U.S.A., Phone (208) 770-2208, E-mail email@example.com,