EMC's $8M Cash/Royalty Offer for Nyngan Scandium Project Expires
Reno, Nevada - November 15, 2012 - EMC Metals Corp. (the "Company" or "EMC") (TSX: EMC) advises that the Nyngan Project offer made to Jervois Mining Ltd (JRV) on October 30, 2012 for cash plus a royalty on Nyngan scandium production, totalling $8 million in value, has been allowed by JRV to expire.
The EMC offer for the Nyngan Project follows a $4 million cash project offer made by Bloom Energy in mid October, reported to the market the following day when it was rejected by JRV as inadequate. The Bloom Energy offer was subject to EMC and JRV resolving their legal action over the project, and to project due diligence.
EMC's open and unsolicited offer to acquire 100% of the Nyngan Scandium Project and settle the outstanding litigation was as follows:
A$1.3M in cash, due and payable within (the latter of) 6 months or satisfaction of the conditions set out below, and
A$45/kg production royalty payable on the first 150,000 kg of scandium oxide produced and sold from the Nyngan project.
In its offer EMC pledged to end legal action against JRV, surrender its claim for damages of up to A$100M and pay its own legal costs. The full value of the offer would therefore flow directly to JRV and its shareholders. The offer was conditional only on receipt of any approvals required by law, which may have included Jervois shareholder approval and FIRB approval, and also on Jervois retaining and protecting the various exploration licenses and project assets until completion.
The offer and EMC press release of October 30, 2012, released in North America, Australia and New Zealand, included valuable information to the shareholders of both JRV and EMC regarding the status of the dispute, the value of the past and current offer, and the size and nature of the legal action facing JRV as a result of improperly terminating the Nyngan Exploration Joint Venture Agreement with EMC.
JRV failed to acknowledge receipt or to otherwise respond to the EMC offer within the 14 day timeframe specified, but did send a letter through its counsel formally rejecting the offer after it expired. No public notice of EMC's offer was given by JRV to shareholders or the ASX.
With the expiry of EMC's $8M offer, the litigation continues, and EMC will vigorously prosecute its defense and counterclaim, filed on August 20, 2012, seeking relief that includes:
A declaration that EMC satisfied the earn-in conditions set out in clause 6.2 of the Exploration Joint Venture Agreement,
A damages award of up to $100 million, to compensate EMC for loss and damage resulting from wrongful termination, loss caused by real delay to project development, loss of project offtake agreements and competitive position, and other specific costs suffered by EMC, and
A specific order preventing JRV from using any reports, studies, or testwork results on the project provided by EMC, for any purpose whatsoever.
Both the defence and counterclaim pleadings are publicly available from the Court in Victoria, Australia. The case is scheduled for hearing on February 4, 2013.
The Board of EMC notes that JRV will hold its Annual General Meeting on November 29, 2012. EMC recommends that the Nyngan dispute, the implications for JRV of the possible legal outcomes, and the EMC offer that has now lapsed be appropriately included in the discussions between the JRV Board, management and shareholders at that meeting.
About EMC Metals
EMC owns a 100% interest in the Springer tungsten mine in Nevada, USA. Strong tungsten prices and tight supply conditions, combined with the refurbished mill and existing tungsten resource on the property, support the strategy to seek a near term restart of the Springer facility. EMC also owns a 100% interest in the Carlin Vanadium property near Carlin, Nevada. Both properties have current NI 43-101 compliant resource estimates, available on the Company website and on SEDAR.
On February 29th, 2012, EMC announced that its earn-in on the Nyngan Scandium Project was rejected by our JV partner, Jervois Mining Limited. We maintain that all project earn-in conditions outlined under the JV Agreement have been met, and we intend to take all lawful steps to secure our proprietary rights to a 50% joint venture interest.
The technical information in this news release has been reviewed by Willem Duyvesteyn, a Qualified Person as defined by National Instrument NI 43-101. Mr. Duyvesteyn is employed by EMC Metals Corp.
For additional information please contact:
EMC Metals Corp.
Investor Relations-Nevada: (775) 355-9500 or firstname.lastname@example.org, or
Sara Boatright Patterson, Windward Global, Charlotte, NC -1-704-588-8600
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
This press release contains forward-looking information that does involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements regarding long term prices for tungsten, our ability to find and retain qualified management and key technical persons to operate the tungsten project, our ability to raise the necessary capital to fund a restart of mining operations, the short term or long term economic feasibility of tungsten production at our Springer facility, and in general statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance. Forward-looking information in this press release is based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice, and by other risk factors disclosed in our public filings. Except as required by law, EMC assumes no obligation to update forward-looking information should circumstances or management's estimates or opinions change.