TORONTO, Nov. 26 /CNW/ - Inmet Mining Corporation (IMN-TSX) announced today that the National Executive Council of the Government of Papua New Guinea has given its consent to the previously announced exchange of Inmet's 18 percent equity interest in Ok Tedi Mining Limited (OTML) for a 5 percent net smelter return (NSR) royalty on revenues of product from the Ok Tedi mine.
OTML and Inmet will now proceed to settle and execute definitive documentation for the transaction. The transaction is expected to close within the next several months.
The NSR will apply to proceeds from the sale of all mineral products from the Ok Tedi mine as operated under the current mine plan, less treatment charges and penalties, insurance, freight and sampling/assaying and a 2 percent royalty paid by OTML to the government of Papua New Guinea the Western Province and local landowners. For the purpose of determining proceeds under the NSR, only gains and losses from hedging and forward sales in effect as of May 18, 2009 would be included.
The term of the NSR is expected to continue from closing until December 31, 2013. This end date will be adjusted to reflect any acceleration, delay, sterilization or change in cut-off grade ore that is contained in the approved pit shell and budget.
At closing, Inmet will receive a payment equal to 18 percent of OTML's working capital as of the effective date. In addition, Inmet will cease to be a shareholder of OTML, will give up its representation on the Board of Directors of OTML and will have no further rights or funding obligations in respect of OTML in that capacity. As a result of the NSR transaction, Inmet will not participate economically in any proposed extension of Ok Tedi operations beyond the term of the NSR.
Forward looking information
Securities regulators encourage companies to disclose forward-looking information to help investors understand a company's future prospects. This press release contains forward-looking information. These are "forward-looking" because we have used what we know and expect today to make a statement about the future. Forward-looking statements usually include words such as may, expect, anticipate, and believe or other similar words. Capital and operating cost estimates are forward-looking statements, and are based on assumptions that we believe to be reasonable. However, actual events and results could be substantially different because of the risks and uncertainties associated with our respective business or events that happen after the date of this press release. You should not place undue reliance on forward-looking statements.
Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We have interests in five mining operations in locations around the world: Çayeli, Las Cruces, Pyhäsalmi, Troilus and Ok Tedi. We also have a 100 percent interest in Cobre Panama, a development property in Panama.
This press release is also available at www.inmetmining.com.
SOURCE INMET MINING CORPORATION
For further information: For further information: Jochen Tilk, President and Chief Executive Officer, (416) 860-3972