Major Partner Won’t Expand Stake In Mine Near Ely – by CBC Minnesota (July 3, 2014)

 http://minnesota.cbslocal.com/

MINNEAPOLIS (AP) — A major partner gave up the right Thursday to take a bigger stake in the proposed Twin Metals copper-nickel mine near Ely in northeastern Minnesota, which has been a target of criticism from environmentalists who fear it will harm the nearby Boundary Waters Canoe Area Wilderness.

Chilean-based mining company Antofagasta PLC said it has terminated its option to buy another 25 percent of Twin Metals Minnesota LLC. The announcement said Toronto-based Duluth Metals Ltd. is now assuming control of the joint venture.

Duluth Metals owns 60 percent of Twin Metals Minnesota. Antofagasta, which could have upped its stake to 65 percent, said it’s now “evaluating its options” for what to do with its 40 percent interest in the joint venture and its 10 percent direct ownership stake in Duluth Metals.

“By doing this today Antofagasta has signaled they intend to walk away from the project,” said Aaron Klemz, spokesman for the Friends of the Boundary Waters Wilderness. An Antofagasta spokesman denied that.

“No they’re not walking away,” spokesman Robin Wrench said by phone. He said Antofagasta still likes the project for the long-term, it’s just not exercising its right to buy a larger stake. The move means Antofagasta is only responsible for 40 percent of the project’s future funding, not 65 percent, he said.

The announcement said Duluth Metals gets an option for six months to buy out Antofagasta’s share, which would cost about $220 million. It must also repay a $10 million loan from Antofagasta regardless of whether it buys Antofagasta’s ownership stake.

“We’re very excited about today’s news,” insisted Chris Dundas, executive chairman of Duluth Metals. He said his company will be analyzing all its alternatives, including buying out Antofagasta’s share. He said he’s “fully confident” that Duluth Metals can finance the project going forward.

For the rest of this article, click here: http://minnesota.cbslocal.com/2014/07/03/major-partner-wont-expand-stake-in-mine-near-ely/