May 01, 2012
URSA Major Minerals reports financials for the year ended January 31, 2012; Annual and Special Meeting regarding amalgamation arrangement with Prophecy Platinum to be held on May 30, 2012
URSA Major Minerals Incorporated ("URSA Major" or
the "Company") (TSX-UMJ) announces its financial
and operating results for the year ended January 31, 2012.
The Company reports that the Shakespeare Nickel Mine had
gross revenues of $11,162,363 with an operating loss on
mining activities of $171,838 for the year.
Financial and Operating Highlights for the Year
• For the year ended January 31, 2012, the Company recorded
gross revenue of $11,162,363 on the sale of metals from the
Shakespeare Nickel Mine, located 70 km west of Sudbury,
Ontario.
• During the twelve months of operation ending January 31,
2012, the Company delivered a total of 151,910 tonnes of
ore to the Strathcona Mill at a grade of 0.314% nickel,
0.368% copper, 0.019% cobalt, 0.348 g/t platinum, 0.389 g/t
palladium, 0.203 g/t gold and 2.164 g/t silver.
• The Company reported a mine operating loss on mining
activities of $171,838, a net loss of $8,665,658, and a
comprehensive loss of $8,661,283 for the year ended January
31, 2012. The net loss and comprehensive loss reflects
impairment charges and write down of mineral properties
totaling $6,828,137.
• For the year ended January 31, 2012, URSA Major has
successful extended the nickel-copper mineralization and
down plunge of the Shakespeare East Deposit by completing
eleven (11) holes. A highlight of the program included
drill hole U3-122 that intersected 5.19 metres grading
0.81% nickel, 0.48% copper, 0.03% cobalt and 1.20 g/t
precious metals within a wider 23.67 metre interval grading
0.55% nickel, 0.36% copper, 0.02% cobalt and 0.92 g/t
precious metals. This is one of the highest grade
intersections reported to date at Shakespeare.
• During the year ended January 31, 2012, 5 (five) drill
holes numbered U3-127 to 131 were drilled vertically to
depths of up to 127 meters within the central portion of
the planned Shakespeare East pit to confirm grade
continuity and to provide additional geotechnical
information to assist with commencement of mining the
Shakespeare East Pit. Highlights include: hole U3-127 that
intersected 83.7 metres grading 0.45% nickel, 0.53% copper,
0.024% cobalt and 1.15 g/t precious metals and hole U3-131
that intersected 60.0 meters grading 0.44% nickel, 0.54%
copper, 0.025% cobalt and 1.26 g/t precious metals.
• In December 2011, the Company announced that operations
at the Shakespeare Mine were being limited to crushing of
existing broken ore, ore sampling and trucking operations
as a consequence of reduced prices for base metals.
• Subsequent to the end of the year ending January 31,
2012, URSA Major announced a temporary suspension of all
operations at the Shakespeare Mine. The Company's
processing agreement expired in December 2011 and the
Company was not able to conclude a new processing agreement
for Shakespeare ore.
• On April 16, 2012, URSA Major and Prophecy Platinum Corp.
("Prophecy") announced the signing of a
definitive agreement in connection with a business
combination. Prophecy has agreed to issue one common share
for each 25 common shares of URSA Major held. The business
combination is subject to customary conditions, including
receipt of regulatory, shareholder and court approvals.
URSA Major has scheduled an annual and special meeting of
its shareholders at which it will seek the shareholder
approvals required in connection with the business
combination.
The quarterly financial statements and related Management
Discussion and Analysis will be filed on SEDAR
(www.sedar.com). Additionally, these documents are
available on URSA Major's website at
www.ursamajorminerals.com. All amounts are in Canadian
dollars unless otherwise indicated.
Richard Sutcliffe, URSA Major's CEO commented, "We
are pleased to have executed a definitive agreement with
Prophecy. Our shareholders will participate in a combined
company with an outstanding portfolio of assets and
substantially improved market capitalization and
liquidity."
Outlook
The Company's revenues are derived from base and
precious metals and the company receives prices for the
metals that are determined by global market conditions.
After a strong first half of 2011, nickel, the metal that
accounts for the largest revenue component of Shakespeare
ore, traded approximately 25% below the Company's
budget were reduced to $11.1 million.
In December, the Company limited operations at the
Shakespeare Mine to crushing of existing broken ore, ore
sampling and trucking operations as a consequence of
reduced prices for base metals. Subsequently, the
Company's processing agreement expired in December 2011
and the Company was not able to conclude a new processing
agreement for Shakespeare ore. Since 2007, URSA Major's
mining operations demonstrated the consistent quality and
metallurgical characteristics of the Shakespeare deposit
and contributed to substantially removing risks from the
future development of the ore body. The Company will review
resuming mining operations and evaluate the best options
for developing the Shakespeare project which is fully
permitted for an onsite mill and related
infrastructure.
On April 16, 2012, URSA Major and Prophecy Platinum Corp.
("Prophecy") announced a definitive agreement
(the "Arrangement Agreement") in connection with
the business combination (the "Transaction")
announced in their joint news release dated March 1, 2012.
Prophecy has agreed to issue one common share for each 25
common shares of Ursa held. The Transaction will be
effected by way of court approved statutory plan of
arrangement under the Business Corporations Act (Ontario)
involving Prophecy, URSA Major and its share and warrant
holders (the "Securityholders"). URSA Major will
amalgamate with a wholly owned Ontario subsidiary of
Prophecy and all of the Securityholders of Ursa will
exchange their URSA Major securities for securities of
Prophecy (the "Securities Exchange"). The
Securities Exchange will be conducted such that for each 25
shares of URSA Major held, an URSA Major shareholder will
receive one common share of Prophecy. Holders of warrants
of URSA Major will receive convertible securities of
Prophecy such that each former URSA Major warrant will be
exchanged for a Prophecy warrant, exercisable for that
number of Prophecy shares that is equal to the number of
URSA shares that would otherwise have been issuable
thereunder divided by 25 with the exercise price of such
Prophecy warrant being adjusted to equal the exercise price
of the applicable URSA warrant multiplied by 25.
As a result of the Transaction, URSA Major securityholders
will become Prophecy securityholders, and URSA Major will
become a wholly owned subsidiary of Prophecy. URSA Major
will apply for voluntary delisting of its common shares
from the Toronto Stock Exchange. Following the Transaction,
Prophecy will have a total of approximately 58.7 million
shares issued and outstanding, as well as options and
warrants entitling holders to purchase approximately 8.2
million common shares.
URSA Major retained Ross Glanville & Associates Ltd. to act
as its financial advisor to consider the fairness of the
Arrangement to the shareholders of URSA Major from a
financial point of view.
In addition, certain shareholders of URSA Major who hold an
aggregate of 16.7 million common shares, representing
approximately 17.33% of Ursa Major's common shares,
have signed support agreements pursuant to which they have
agreed to vote all of the URSA Major shares beneficially
owned by them in favour of the Transaction.
The Arrangement Agreement includes non-solicitation
clauses. A break fee of $1,500,000 is payable to Prophecy
should URSA Major accept a superior offer.
The Transaction is subject to customary conditions,
including receipt of regulatory, shareholder and court
approvals. URSA Major has scheduled an annual and special
meeting of its shareholders to be held on May 30, 2012 at
which it will seek the shareholder approvals required in
connection with the Transaction. It is anticipated that
materials for such meeting will be mailed to URSA
shareholders on or about May 7, 2012. Subject to
satisfaction of all conditions, completion of the
Transaction is expected to occur on or before June 15,
2012.
About Prophecy Platinum Corp.
Prophecy Platinum is a Canadian-based Nickel-PGM
exploration company with projects in Canada, Argentina and
Uruguay. Prophecy Platinum's flagship Wellgreen
PGM-Cu-Ni project is in Yukon Territory, Canada and the
Lynn Lake project is located in Manitoba, Canada.
About URSA Major Minerals - URSA Major is a Canadian mining
company with two nickel sulphide projects containing
significant NI43-101 compliant nickel and copper reserves
and resources. The Company is focused on demonstrating
profitable operations at the Shakespeare Mine and growing
its nickel, copper and platinum group metal (PGM) deposits
through exploration and development, primarily in Ontario,
Canada.
CONTACT: Dr. Richard Sutcliffe, President & CEO
Alison Tullis, Investor Relations Manager
Phone: 416-864-0615
atullis@ursamajorminerals.com
http://www.ursamajorminerals.com
Address: 8 King Street East, Suite #1300, Toronto, Ontario,
Canada M5C 1B5
Symbol & Exchange: UMJ -- TSX
This release was prepared by management of the Company who
takes full responsibility for its contents. The TSX has not
reviewed and does not accept responsibility for the
adequacy or accuracy of this news release.
Some statements contained in this release are
forward-looking and, therefore, involve uncertainties or
risks that could cause actual results to differ materially.
Such forward-looking statements include comments regarding
mining and milling operations, mineral resource statements
and exploration program performance. Factors that could
cause actual results to differ materially include metal
price volatility, economic and political events affecting
metal supply and demand, fluctuations in mineralization
grade, geological, technical, mining or processing
problems, exploration programs and future results of
exploration programs, future profitability and
production.
This press release is not for distribution to any U.S. news
wire service or for dissemination in the United States.
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