/NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
TORONTO, Feb. 11 /CNW/ - Cline Mining Corporation (TSX: CMK) ("Cline" or "The Company") Cline Mining is pleased to announce the closing of a total of C$6.9 million in debt and equity financing, the details of which were initially outlined in the company's January 6, 2010 News Release. The financing consists of funds that will be applied to complete the rehabilitation of the New Elk metallurgical coking coal mine in Colorado, which is currently in full progress, and for working capital.
The debt financing is comprised of a C$3.0 million loan (the "Loan") from Mitsui Matsushima International Pty. Limited ("Mitsui Matsushima") of Tokyo. The Loan bears interest at 6% p.a., and both the principal and interest are repayable in one year, with a lender's option to extend for a further year. The proceeds from the Loan will be applied directly to completion of the rehabilitation plan at the New Elk coal mine.
The equity financing consisted of a brokered private placement of C$3.9 million, completed through PowerOne Capital Markets Limited as agent. The C$3.9 million was raised through the sale of 13,000,000 million units at a price of 30 cents per unit. Each unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant of the Company. Each whole common share purchase warrant entitles the holder to purchase one common share of the Company at any time until February 11, 2012 at an exercise price of $0.40 per share.
Cline Mining's New Elk coal mine in Colorado has a long and successful history of producing and delivering high quality metallurgical (coking) coal from its underground mine in southern Colorado to the steel making industry. The mine has a large measured and indicated coal resource of 315,000,000 tons of in-place coal, which is detailed in its National Instrument 43-101 ("NI 43-101") compliant Technical Report of May 8, 2008. In addition to its large coal resource, the coal mine assets include a coal preparation plant, product coal silos and rail load-out, buildings, railway right of way, surface real estate, conveyor systems, electrics, underground workings with mine portal access from the plant site, mine permit and a permitted coal refuse disposal site. The mine is accessed directly by paved highway from the town of Trinidad, southern Colorado.
Cline is continuing with the reactivation and upgrading of service infrastructure concurrently with the mine rehabilitation program. The company has awarded TK Mining Services, LLC the contract for Exploration and Rehabilitation of the New Elk mine. The New Elk Mine rehabilitation program is presently in progress for completion in July 2010. First saleable production of coking coal from the New Elk mine is expected in the fourth quarter of 2010. The New Elk mine will reach an annual capacity of 1.3 million tons in 2011, proceeding continuously to the production and sale of 3.0 million tons of coal annually, slated for world export markets. The Mine has large in-place compliant coal resources and further significant increases in production over the initial 3 million ton annual rate can be contemplated in the future.
The New Elk coal mine near the town of Trinidad in southern Colorado will directly employ 450 employees, providing additional jobs to support suppliers and independent contractors in the community. President and CEO Ken Bates is pleased that the New Elk mine puts Cline in a position to support the local community. "We are confident that the New Elk coal mine holds exciting opportunities for the shareholders of Cline and also creates employment opportunities that will positively affect the people of Trinidad."
About Cline Mining: Cline has significant metallurgical coal property interests in British Columbia, Canada and in Colorado, U.S.A. with NI 43-101 compliant independent Technical Reports. Cline Mining Corporation is a mine development company focused on the exploration and development of metallurgical steel making coals in Canada and the U.S., iron ore in Madagascar and the Cline Lake Gold Mine Property in northern Ontario, Canada.
CLINE MINING CORPORATION
Ken Bates, President and Chief Executive Officer
This news release may contain forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities laws), including information relating to the magnitude or quality of mineral deposits, the economic assessment and estimates regarding the mine life of the New Elk coal mine, and the timing and completion of financings. The timing of drilling and work recommended by the 43-101 Report is based on current internal expectations, which may prove to be incorrect. Other risk factors are discussed under "Risk Factors" in Cline's 2008 Annual Information Form, and include management's ability to anticipate and manage risk factors. Such forward-looking statements necessarily involve known and unknown risks and uncertainties that are common to junior mineral exploration companies. These risks and uncertainties include, among other things, the Company's need for additional funding to continue its exploration efforts, changes in general economic, market and business conditions, and competition for, among other things, capital and skilled personnel. These statements are not a guarantee of future performance and undue reliance should not be placed on them. The Company undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws. Copies of the Company's public filings under applicable Canadian securities laws are available at www.sedar.com. The Company further cautions that information contained on, or accessible through, this website is current only as of the date of filing such information and may be superseded by subsequent events or filings. The technical information contained in this press release has been prepared and reviewed by Dennis Mraz, P.Eng.,Executive Vice President and Chief Operating Officer of the Company, a qualified person within the meaning of NI 43-101. This Press Release is not for distribution to U.S. news services or for dissemination in the United States, and does not constitute an offer of the securities described herein. The securities referenced herein have not been registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt therefrom.
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SOURCE Cline Mining Corporation
For further information: For further information: Ken Bates, President and CEO; Ernest Cleave, Vice-President and CFO, Office: (416) 572-2002, Email: firstname.lastname@example.org, Website: www.clinemining.com