AMG affiliate Timminco Limited pursuing opportunities to expand silicon metal production
(Thomson Reuters ONE) -
Amsterdam, 16 February 2010 --- AMG Advanced Metallurgical Group N.V.'s ("AMG,"
EURONEXT AMSTERDAM: "AMG") 42.5% owned affiliate, Timminco Limited ("Timminco";
TSX: TIM) announced today that it is pursuing opportunities to expand its
silicon metal capacity, through a potential new silicon metal production
facility in Iceland based on geothermal power. To this end, Timminco and
Orkuveita Reykjavíkur, an Icelandic power company, have agreed in principle on
the terms of a long-term power supply contract for such a facility. Timminco
has also secured convertible debt financing from Stokkur Energy ehf
("Strokkur"), an Icelandic private equity firm, to fund preliminary expenses
associated with this project.
"The production of silicon metal for the chemical and aluminum industries is the
core of Timminco's business," said Dr. Heinz C. Schimmelbusch, Chairman of the
Board and CEO of Timminco. "Our Becancour silicon metal facility is now
operating at full capacity. As the markets for our silicon metal products
continue to grow, we are developing opportunities to expand the capacity, both
for our traditional customers as well as for our solar grade silicon product
line once the solar photovoltaic market strengthens. The Timminco management
team has the technical expertise to pursue these opportunities, as well as
experience with silicon-related project development in Iceland."
Orkuveita Reykjavíkur, also known as Reykjavik Energy, has agreed in principle
on the key terms for a proposed agreement to supply up to 85 MW of electrical
power from a proposed new geothermal power plant to be built in Hverahlid,
Iceland, which is expected to become operational in the latter half of 2013.
The power would be supplied for a minimum 20-year term, priced in U.S. dollars
at internationally competitive rates, to a greenfield silicon metal plant
expected to be built in Olfus Municipality, about 50 km from Reykjavik. This
new silicon metal facility, which is expected to have a nominal annual
production capacity of up to approximately 50,000 mt of silicon metal when fully
operational, would be based on the silicon metal processing technology and
leverage the know-how of Timminco's wholly-owned subsidiary, Bécancour Silicon
Inc. The parties have targeted to complete their negotiations on definitive
power contract by a deadline of April 15, 2010.
"We are looking forward to developing our relationship with Timminco and the
Olfus Municipality and thereby diversifying our energy clientele. Utilizing
Iceland's eco-friendly geothermal resources plays a vital part in this country's
economy," said Hjörleifur B. Kvaran, CEO of Orkuveita Reykjavíkur. "I am
optimistic that this move towards supplying renewable energy to silicon metal
and solar grade silicon production will strengthen Iceland as the home of pure
energy."
In pursuing this project, Timminco has also partnered with Strokkur, which is
focused on investments in power intensive industries. Strokkur has agreed to
provide initial financing for certain activities to be undertaken during the
preliminary phase of this project in parallel with negotiations on the power
contract. This financing will be in the form of a convertible bond in the
principal amount of $1 million (the "Bond"). The proceeds will be used to fund
preliminary engineering work to be performed by an international engineering
consulting firm engaged to conduct a conceptual study, which is expected to be
completed by mid-April. In the event of a positive outcome from such study, and
subject to successful negotiations on the power contract and preliminary
commitments from one or more silicon metal customers, a full feasibility study
for the project would be commissioned, with an expected completion in the latter
half of this year. This feasibility study would assist in securing long-term
off-take agreements with customers and external financing for the construction
of the proposed new facility, which are two of the key conditions for proceeding
with the project.
The Bond will be a direct obligation of Thorsil ehf ("Thorsil"), a special
purpose vehicle in Iceland that is currently owned by Timminco and Strokkur.
The Bond will have a maturity date of May 1, 2010, subject to extension if the
deadline for signing the power contract is extended. The Bond will bear
interest at 12% per annum, payable on maturity. The outstanding principal and
interest will be reduced by 10% if the power contract is not signed by the
agreed deadline and, in such event, the maturity date would be extended to June
19, 2010. The Bond will be convertible, at Strokkur's option, into Thorsil
common shares at a nominal value, or into Timminco common shares at a conversion
price that is the lesser of C$1.09 per share and the 5-day weighted average
trading price per share on the Toronto Stock Exchange ("TSX") on the date of
notice of conversion, with the US dollar amount converted into Canadian dollars
at a fixed exchange rate of $0.95. Any notice of conversion shall be given
within 5 days after the power contract has been signed or the agreed deadline
has passed. The net proceeds of the Bond financing will be used exclusively for
agreed project expenses. Completion of the Bond financing is expected to occur
on February 19, 2010, subject to certain conditions, including approval of the
TSX.
About AMG
AMG, incorporated in the Netherlands, is a global leader in the production of
highly engineered specialty metal products and advanced vacuum furnace systems.
AMG serves growing industries worldwide with its unique combination of
metallurgical engineering expertise and production know-how. AMG is a market
leader in many of its products and systems, which are critical to the production
of key components for the aerospace, energy (including solar and nuclear),
infrastructure and specialty chemicals and metals industries. AMG has two
operating units - Advanced Materials and Engineering Systems, and owns interests
in publicly-listed companies Graphit Kropfmühl AG (Deutsche Börse: GKR.DE) and
Timminco Limited (TSX: "TIM").
The Advanced Materials Division develops and produces niche specialty metals and
complex metals products, many of which are used in demanding, safety-critical,
high-stress environments. AMG is one of a limited number of significant
producers globally of niche specialty metals, such as ferrovanadium,
ferronickel-molybdenum, aluminum master alloys and additives, chromium metal and
ferrotitanium, used by steel, aluminum, chemical and superalloy producers for
aerospace, automotive, energy, electronics, optics, chemicals, construction and
other applications. Other key products produced by AMG include specialty alloys
for titanium and superalloys, coating materials, tantalum and niobium oxides,
vanadium chemicals and antimony trioxide.
The Engineering Systems Division designs, engineers and produces advanced vacuum
furnace systems and operates vacuum heat treatment facilities. AMG is a global
leader in supplying technologically-advanced vacuum furnace systems to customers
in the aerospace, energy (including solar and nuclear), transportation,
electronics, superalloys and specialty steel industries. Examples of furnace
systems produced by AMG include vacuum remelting, solar silicon melting and
crystallization, vacuum induction melting, vacuum heat treatment and high
pressure gas quenching, vacuum precision casting, turbine blade coating and
sintering. AMG also provides vacuum case-hardening heat treatment services on a
tolling basis to customers through facilities equipped with vacuum heat
treatment furnaces.
Graphit Kropfmühl AG is a majority controlled, publicly listed subsidiary of
AMG. Based on its secure raw material sources in Africa, China and Europe,
Graphit Kropfmühl is a specialist in the production of silicon metal and the
extraction, processing and refining of natural crystalline graphite for a wide
range of energy saving industrial applications.
Timminco Limited is a publicly listed affiliate of AMG. Timminco is a leader in
the production of upgraded metallurgical silicon for the rapidly growing solar
photovoltaic energy industry. Timminco also produces silicon metal for use in
a broad range of industrial applications.
AMG operates globally with production facilities in Germany, the United Kingdom,
France, Czech Republic, the United States, Canada, Mexico, Brazil, Sri Lanka and
Australia and also has sales and customer service offices in Belgium, Russia,
China and Japan (website: www.amg-nv.com
For further information please contact:
AMG Advanced Metallurgical Group N.V. +1 610 975 4901
Jonathan Costello
Vice President of Corporate Communications
jcostello(at)amg-nv.com
Disclaimer
Certain statements in this press release are not historical facts and are
"forward looking." Forward looking statements include statements concerning
AMG's plans, expectations, projections, objectives, targets, goals, strategies,
future events, future revenues or performance, capital expenditures, financing
needs, plans and intentions relating to acquisitions, AMG's competitive
strengths and weaknesses, plans or goals relating to forecasted production,
reserves, financial position and future operations and development, AMG's
business strategy and the trends AMG anticipates in the industries and the
political and legal environment in which it operates and other information that
is not historical information. When used in this press release, the words
"expects," "believes," "anticipates," "plans," "may," "will," "should," and
similar expressions, and the negatives thereof, are intended to identify forward
looking statements. By their very nature, forward looking statements involve
inherent risks and uncertainties, both general and specific, and risks exist
that the predictions, forecasts, projections and other forward looking
statements will not be achieved. These forward looking statements speak only as
of the date of this press release. AMG expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward looking
statement contained herein to reflect any change in AMG's expectations with
regard thereto or any change in events, conditions, or circumstances on which
any forward looking statement is based.
[HUG#1385082]
AMG affiliate Timminco Limited pursuing opportunities to expand silicon metal production: http://hugin.info/138060/R/1385082/343787.pdf
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Datum: 16.02.2010 - 10:49 Uhr
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