Hi BensonInvestor.Quite interested in your reports on CCH as I am a holder of NWI.One of the points I liked on my research of NWI was its large position in CCH and 50% of cornerbrook.Interested in your thoughts on on NWI's role with CCH and I will due a little more specific research on CCH.
Info on relationship.....
Nuinsco invests in Campbell for Chibougamau opportunity
2006-04-24 10:32 ET - News Release
Also News Release (C-CCH) Campbell Resources Inc (2)
Mr. Warren Holmes of Nuinsco reports
NUINSCO ENTERS CHIBOUGAMAU MINING CAMP VIA AGREEMENT WITH CAMPBELL RESOURCES DEAL GIVES NWI SIGNIFICANT EQUITY POSITION IN CAMPBELL, 50% INTEREST IN CORNER BAY COPPER DEPOSIT
Nuinsco Resources Ltd. has expanded into the Chibougamau mining camp through an agreement with Campbell Resources Inc. under which Nuinsco will take a significant equity interest in Campbell and assume operating management of Campbell's copper and gold mines.
Highlights of the agreement are:
Nuinsco will subscribe for $2.5-million of common shares as part of the $15.5-million in equity financing proposed to be carried out by Campbell. Nuinsco's $2.5-million position will represent 10 per cent of Campbell's issued and outstanding common shares following completion of such financings. Nuinsco intends to initiate a rights offering for its shareholders to finance this transaction, subject to receipt of all required regulatory approvals;
Nuinsco will receive warrants to purchase 20 per cent of Campbell's issued and outstanding common shares on a fully diluted basis;
Nuinsco has entered into an operating management agreement to provide management services for the operation of Campbell's Joe Mann gold mine and Copper Rand copper mine; and
Nuinsco will receive a 50-per-cent interest in Campbell's advanced Corner Bay copper deposit.
"Nuinsco's stated strategy is to maintain strong exploration capability while making the transition into mine development and commercial production," said chief executive officer Warren Holmes. "This agreement gives Nuinsco exposure to Quebec's prolific Chibougamau mining camp through our partnership with Campbell, exposes us to near-term production potential via a 50-per-cent interest in the Corner Bay copper deposit, and will provide the cash flow from the operating management agreement to continue to advance our existing property pipeline."
"We are very pleased to be associated with a management team of Nuinsco's calibre," said Andre Fortier, president and chief executive officer of Campbell. "With many years of experience in mine development, operations, finance and exploration we are confident that Nuinsco has the right skills to help us realize the value of our assets for Campbell shareholders."
The operating management agreement and equity financings come in conjunction with a plan of arrangement to allow Campbell to cease being subject to the Companies' Creditors Arrangement Act (CCAA).
Operating management agreement
The operating management agreement is a key part of Campbell's business plan going forward. Under the operating management agreement, Nuinsco will provide operating management services for Campbell's development and mining activities, including development to increase production at the Copper Rand copper mine, development of the Corner Bay copper deposit and optimization of the Joe Mann gold mine. Nuinsco has completed a study, and prepared a development and mining plan designed to provide the additional production necessary to turn the Copper Rand mine into a profit-making venture and to bring the Corner Bay deposit into production.
Under the operating management agreement, Nuinsco will receive:
two-year warrants to purchase up to 20 per cent of the issued and outstanding common shares of Campbell, on a fully diluted basis. The exercise price of the warrants will be 10 cents per share;
two million common shares of Campbell upon commencement of the provision of services under the management and operating agreement;
one million common shares of Campbell upon completion by Campbell of all of the financings described below;
$25,000 plus 200,000 common shares of Campbell per month, in advance (up to a maximum of four million common shares); and
Nuinsco is also entitled to appoint two individuals as directors of Campbell.
Campbell Resources financings
Campbell's financing agreements are as follows:
Nuinsco has agreed to subscribe for 31.25 million units of Campbell at a price of eight cents per unit, for gross proceeds of $2.5-million;
Sprott Securities Inc. has agreed to complete, on a best-efforts private placement basis, the sale of up to 100 million units of Campbell at a price of eight cents per unit, for gross proceeds of up to $8.0-million; and
concurrent with the brokered placement and the Nuinsco placement, Campbell will proceed with a rights offering to its shareholders of up to 62.5 million units at a price of eight cents per unit, for gross proceeds of up to $5.0-million. In the event that the rights offering is not fully subscribed, the agent and Nuinsco will have the option to take up any shortfall on a pro rata basis to their equity financings.
Each unit of all three financings shall consist of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant shall be exercisable at any time for one common share at a price of 15 cents for a period of two years following closing. Campbell shall have the right, 12 months after closing, to call the outstanding warrants should Campbell common shares trade above 30 cents for 20 consecutive trading days.
The net proceeds of the brokered placement, the Nuinsco placement and the rights offering will be used to finance further development to expand production at the Copper Rand mine, to finance development of the Corner Bay deposit and for general working capital. Except for $4-million to repay a secured credit facility, no proceeds of the financing agreements will be used under the plan of arrangement.
The brokered placement is subject to certain conditions including, but not limited to, completion of satisfactory due diligence by the agent and the receipt of all necessary regulatory approvals. The Nuinsco placement and the rights offering are also subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory approvals.
Campbell Resources' assets
Campbell Resources is a junior mining company that operates underground gold and copper mines located in the Chibougamau mining camp. Campbell was granted an initial order under the CCAA in June, 2005. Along with other potential development projects in the area, Campbell's principal assets are as follows (the following information with respect to these assets is based on information publicly reported by Campbell):
Joe Mann mine
The Joe Mann gold deposit was discovered in 1950, and Campbell gained a 100-per-cent interest in 1987. During the past three years, Joe Mann has produced between 139,000 and 186,000 tons of ore annually grading between 0.230 and 0.254 ounce per ton.
Copper Rand mine
Over the last five years, more than $60-million has been spent on developing the Copper Rand mine, and Nuinsco will assist in further developing the mine with the objective of doubling production to 350,000 tons per year. This development is expected to take approximately four months from completion of the financings at a cost of approximately $5-million.
Corner Bay deposit
The Corner Bay copper deposit is located approximately 55 kilometres south of the city of Chibougamau, and hosts a measured resource of 740,000 tons grading 5.13 per cent copper, an indicated resource of 325,600 tons grading 5.53 per cent copper and an inferred resource of 874,000 tons grading 6.60 per cent copper.
Development of the Corner Bay deposit above the 250-metre level is expected to take approximately 12 months at a cost of $9-million to $11-million, subject to the completion by Nuinsco of a feasibility study. If necessary, Nuinsco will obtain a non-recourse project loan, in an amount up to $4-million, and/or other financing sufficient to develop and bring into commercial production a mine above the 250-metre level, subject to the approval of Campbell's board of directors. For this commitment, Nuinsco is entitled to a 50-per-cent interest in the Corner Bay deposit.
Conference call
Management of Nuinsco and Campbell will jointly host a conference call to discuss the transaction today, Monday, April 24, 2006, at 3:30 p.m. ET. To access the conference call by telephone, dial 1-800-814-3911 approximately 15 minutes prior to the beginning of the call. The conference call will be archived for seven days. To access the rebroadcast, please dial 1-877-289-8525 and enter the passcode 21186328 (followed by the pound key).
Nuinsco annual meeting
Shareholders should note that Nuinsco has rescheduled its annual and special meeting. The annual and special meeting of shareholders will now be held at 11 a.m. Toronto time) June 14, 2006, at the Dominion Club, 1 King St. W, Toronto, Ont.
We seek Safe Harbor.
|
