VANCOUVER, BRITISH COLUMBIA, Jun 23, 2014 (Marketwired via COMTEX) — Baja Mining Corp. (“Baja” or the “Company”) CA:BAJ -10.00% (otcqb:BAJFF) is pleased to announce that further to its news release of May 13, 2014, Minera y Metalurgica del Boleo, S.A. P.I. de C.V. (“MMB”) and Korea Resources Corporation (“KORES”) have provided it with documentation confirming the termination of the 2010 Project Financing senior facilities, including the termination and/or release of all related Baja guarantees (US$160.6 million as at March 31, 2013, plus any overall completion guarantee), security interests and pledges. Accordingly, Baja is no longer liable as a guarantor of any amounts borrowed by MMB, nor is it liable in respect of any overall economic completion guarantee related to project finance for the Boleo Project. Baja remains a 10% shareholder of MMB and if the total costs to complete the Boleo Project exceed US$1,751 million and further equity funding is required, Baja must participate on a pro rata basis or Baja’s current 10% interest in MMB will be further diluted.
Tom Ogryzlo, Interim CEO of the Company, commented “This represents another significant milestone in the restructuring of aspects of the Company’s operations and the reset of relationships with various Boleo Project stakeholders. The Company’s management team and board members have worked diligently to achieve the best possible outcomes for Baja shareholders in the challenging circumstances the Company has faced over the last two years. I thank all shareholders for their continued support and understanding as the Company continues to address remaining issues relating to the cost overruns and change of control of the Boleo Project.”
Mr. Ogryzlo added, “I remain hopeful that with the termination of the guarantees, as well as many other restructuring achievements of the last several months, some fundamental value of Baja’s remaining participation in the Boleo Project may be protected for Baja shareholders.”
Since the beginning of the year, Baja has achieved the following:
— successfully settled the Louis Dreyfus actions (see Baja news release,
January 24, 2014), substantially reducing the Company’s ongoing legal
expenses;
— agreed to convert, the Company’s shareholder loans in MMB for equity in
exchange for a reduction in the rate of interest on the MMB-KORES debt
facility to 4% (see Baja news release, April 2, 2014), which helped pave
the way for the successful MMB bond issuance and early refinancing of
the then remaining 2010 Project Financing facilities and KDB
subordinated debt (see Baja news release, May 13, 2014);
— reached agreement in principle with KORES on key matters having
significant potential implications for the Company and its shareholders
(see News Release, April 2, 2014), including:
— the determination of an MMB dividend policy to ensure that available
funds are distributed to shareholders at the earliest possible time,
after having satisfied prior debt service and principal repayment
obligations;
— the restructuring of terms relating to the manganese production
decision and manganese refundable deposit liability to avert a near-
term insolvency risk by eliminating US$10,000,000 from the Company’s
current liabilities; and
— establishing a framework for further dilution of the Company’s
ownership in MMB relating to future cash calls associated with the
Boleo Project;
— voluntarily delisted its common shares from trading on the TSX and
applied for and obtained a Tier 2 Listing on the TSX Venture Exchange,
and filed a Form 15 with the United States Securities and Exchange
Commission to terminate the registration of its common shares under
Section 12(g) of the Exchange Act and suspending its reporting
obligations under Section 15(d), significantly reducing the Company’s
listing and compliance costs while maintaining a market for the
Company’s common shares;
— worked closely with its legal counsel to defend the class action law
suit. Although the Ontario Superior Court of Justice has certified the
action as a class proceeding under the Ontario Class Proceedings Act, as
against Baja and the remaining individual defendants, the court granted
leave to the plaintiff to proceed only with respect to statutory claims
under s. 138.3 of the Ontario Securities Act and dismissed all other
claims (see Baja news release, April 29, 2014). It is expected that the
narrowed scope of the class action may facilitate a less complex legal
and court process, to the benefit of the Company and its stakeholders;
— assisted Cinto Colorado to confirm its legal rights to develop the
tailings and slags located adjacent to the Boleo Project, and to obtain
the support of the Municipio of Santa Rosalia, which will enable Cinto
Colorado, together with Baja, to advance plans to evaluate development
options, including the potential processing and/or sale of the tailings
and slag for the benefit of Baja and its shareholders. Baja’s
preliminary due diligence review indicates the Cinto Colorado tailings
and slag contain significant residual copper and cobalt that represents
a potential low-risk, low-cost avenue to near-term cash flow; and
— with the removal of all security interests and pledges relating to the
2010 Project Financing senior facilities, Baja is now evaluating options
for its Luxembourg subsidiaries with a view to simplifying the Company’s
legal structure and eliminating further operating costs.
Boleo Project Schedule Update
MMB has reported to Baja that it has completed its most recent schedule review for the Boleo Project, and has advised the Company of the following:
— Piping and instrumentation construction schedules remain under pressure
due to ongoing work force shortages;
— MMB is now targeting mechanical completion of the copper circuit by the
end of June 2014. First ore or hot commissioning is now expected to
commence in early September, with October 1, 2014 being the targeted
date for first copper production; and
— Mechanical completion of the cobalt zinc circuits is now scheduled for
the middle of August 2014 due to lateness in delivery of certain
equipment. Additionally, delays to the completion of the copper circuit
are having a knock-on effect preventing the movement of crews to work on
the construction of the back-end. First cobalt zinc production is now
scheduled for November 1, 2014.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This press release contains forward-looking statements or forward-looking information (forward-looking statements). These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not historical fact. Forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements contained in this press release are based on our current estimates, expectations and projections, which the Company believes are reasonable as of the current date. Actual results could differ materially from those anticipated or implied in the forward-looking statements and as a result undue reliance should not be placed on forward-looking statements. Additional risks and uncertainties can be found in the Company’s reporting documents filed on SEDAR ( www.sedar.com ), including its Management Discussion and Analysis and Annual Information Form. Forward-looking statements are given only as at the date of this press release and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Contacts:
Baja Mining Corp.
Tom Ogryzlo
Interim CEO
604-685-2323
604-629-5229 (FAX)
www.bajamining.com
SOURCE: Baja Mining Corp.
