EMED Mining Settles Mine Terms With Spanish Social Security

8th Jun 2010 07:31

LONDON (Dow Jones)--EMED Mining Public Limited (EMED.LN), an exploration and development of natural resources company, announced Tuesday that its wholly-owned subsidiary EMED Tartessus S.L. has settled the terms with Department of Social Security in Spain for extinguishing its liens against its principal landholdings which underlie the entire mine, minerals title area and plant site of Proyecto Rio Tinto or PRT. MAIN FACTS: -The liens had been granted as a form of security interest set against the landholdings to secure the payment of the debt owed to the Department of Social Security by previous owner - the now insolvent Minas de Rio Tinto or MRT. -Following discussion, EMED Tartessus has agreed new arrangements for the repayment of the EUR16.9 million debt over a five year period. -This covers the unpaid social security contributions incurred by MRT and also includes interest accrued since MRT went into liquidation. -EMED Tartessus has always been aware of the liens and factored in full repayment of the past debt as part of the cost of the restart of the Rio Tinto Mine. -Under the terms of the settlement, the Department of Social Security will not enforce the liens it holds against the relevant assets owned by EMED Tartessus and the debt will be repaid in full over a five year period: EUR1.3 million initially, followed by annual payments of EUR1.1 million, EUR2.9 million, EUR3.6 million, EUR4.2 million and EUR5.9 million, including interest. -This transaction is important as it assists the planned project financing arrangements for PRT's restart and the extended repayment profile helps to protect the cash flow of the project in its early years. -It is also important for the central government of Spain as it will recover 100% of a large and long outstanding debt with interest. -The successful resolution of this obligation is another important milestone in the re-opening of the Rio Tinto Mine. -The initial step, achieved in 2008, was the clarification of project ownership when EMED Mining moved to full ownership by acquiring from MRI Investment A.G the 49% of EMED Tartessus it did not already own. -The company continues to proceed with permitting activities, working cooperatively with all relevant government departments to complete the full range of requested technical submissions on schedule in the coming month. -An outstanding matter to be resolved is the acquisition of certain adjacent landholdings needed for PRT. -In the absence of a negotiated agreement, the company will initiate compulsory acquisition as permitted under Spanish law and the relevant independent valuations have been carried out. -Shares closed Monday at 8.25 pence. -By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; [email protected] (END) Dow Jones Newswires June 08, 2010 02:31 ET (06:31 GMT)