Duluth Metals Ltd DULMF

What Anto had to say

[marpincan]

For immediate release,3 July 2014

TWIN METALS PROJECT

Antofagasta plc (“Antofagasta”) announces that its wholly owned subsidiary Northern Minerals Investment (Jersey)

Limited, has given notice today under the Second Amended and Restated Participation and Limited Liability Company

Agreement (the “Participation Agreement”) of Twin Metals Minnesota LLC (“TMM”) that it has terminated, with immediate effect, its option to acquire an additional 25% of TMM. As a result of being provided the option termination notice, Duluth Metals Limited (“Duluth Metals”) has a right under the Participation Agreement to purchase, within 180

days, Antofagasta’s 40% of TMM for a price equal to Antofagasta’s sunk costs (currently estimated to be approximately US$220m) plus

approximately US$10m currently outstanding (plus accrued and unpaid interest) under the bridge loan facility. If Duluth Metals does not exercise its buy- back right, Antofagasta will continue to own 40% of TMM and Duluth Metals will be required to repay the bridge loan facility, at its option, in either cash or Duluth Metals shares. Antofagasta currently owns 10.35% of Duluth Metals. Following the termination of the option, Duluth Metals will control the management and development of the Twin Metals Project. Both parties share a desire for an orderly and immediate transition of control of TMM.

Antofagasta is evaluating its options with respect to its continued 40% interest in the TMM and its direct shareholding in Duluth Metals.

Diego Hernandez, Chief Executive of Antofagasta, said: “Despite our belief that TMM and the Duluth Complex have potential long term geological attractions, we have taken the decision to terminate our option to acquire an additional 25% of TMM now that the pre-feasibility study is nearing its completion and due to elements of the Participation Agreement. Our focus is on prioritizing projects with the highest value and lowest risks within our portfolio.” Antofagasta will provide further updates as appropriate.

[estebancaballo]

Ok so they have decided to let someone else take on the risk of developing this project while continuing to own a large chunk of it. In the meantime they will develop more cost-effective and less risky projects. Fair enough. Now DM will have to find another partner to dance with....all imho.

[marpincan]

when they say "we have taken the decision to terminate our option to acquire an additional 25% of TMM now that the pre-feasibility study is nearing its completion and due to elements of the Participation Agreement." It sounds to me like they did not like what it was going to cost them and could not come to terms with DM on altering the deal.   So what it boils down to is that dm has

[estebancaballo]

I'm no fan of Dundas but not sure he can be blamed for this situation (if blame is even due). The deal with Anto was a good one...they have made a decision - so be it. The deposit remains and will almost certainly be developed by someone if the world continues to require ever increasing amounts of base metals and pm. The someone is now in question but DM continues to own the deposit....all

[DearBear6]

I'm thinking Anto is possibly thinking 4 things.  1. Paying for the 25% of DM was too much in the favor of DM and not good enough for Anto. I think this is most likely IMO. "we have taken the decision to terminate our option to acquire an additional 25% of TMM now that the pre-feasibility study is nearing its completion and due to elements of the Participation Agreement."

[estebancaballo]

I agree that the phrase "due to elements of the Participation agreement" seems to be pregnant with meaning. But what does it mean? I guess we should all go read the participation agreement...is it even available?

[goldsternp]

Most of you seem to know more about mining issues than I do so I would like to hear what you think. The agreement says "Antofagasta will provide US $130 million in direct funding to the project for its 40% interest in the joint ventur - Thereafter, if Antofagasta elects to proceed with the further funding of the project and to maintain its 25% Option, Antofagasta will disproportionately fund

[redmetal]

Anto doesnt pend $220 million and start the games immediatley before the PFS unless there are real games coming. Stay tuned, this will be a Roller Coaster ride. May be some big money to be made or lost.

[redmetal]

Forgot to say that Anto has seen enough of Dundas (Homer Simpson) to think they can take him out. 

[yoda2]

ballo  there press release seems to indicate that Anto wants to sell their 40% interest in TMM and they also want to sell their 10.35% of DM They seem to want to move on You mentioned lawsuits in an earlier post,--- what did you mean?

[estebancaballo]

I was referring to his eminence the Cardinal's earlier post: "The "ounces in the ground" value of what DM has identified so far makes it worth about $3 a share. If they were to try to sell it for any less than that, every class-action law firm from here to Mars would be on them like a duck on a June bug." I hope he is right but really don't know if this is true or not