TORONTO, ONTARIO – JUNE 11, 2012 (“Ivernia” or the “Company”) (TSX:IVW) today
announced that it has received a binding commitment from the Company’s majority
shareholder, Enirgi Group Corporation (“Enirgi Group”), to provide Ivernia a $6 million (the
“Principal Sum”) secured loan facility (the “Facility”) for a term of one year (“Maturity Date”) from
the date of closing the Facility (“Closing Date”). Enirgi Group currently owns approximately
58.90% of Ivernia’s outstanding common shares and is therefore a related party of Ivernia. The
Facility will be used to strengthen Ivernia’s financial position generally and specifically to
provide working capital to fund the ongoing care and maintenance period at the Magellan Mine.
Under proposed terms of the Facility, Ivernia will have the right to draw down on the Facility up
to the Principal Sum, starting on the Closing Date, if and as required, and to pre-pay at its
option any outstanding amount of the Principal Sum with accrued interest. Amounts drawn
down on the Facility will bear interest at an annual simple rate of 8.3%, with interest payable in
arrears upon the earlier of the pre-payment of principal or the Maturity Date. Any outstanding
principal and unpaid interest will be due and payable on the Maturity Date and no interest or
fees will be charged on unused portions of the Facility.
The Facility will be secured by a first priority perfected security interest granted by Magellan
Metal Pty Ltd. (“Magellan Metals”) over the stockpile of approximately 10,100 dry metric tonnes
of lead carbonate concentrate held at the Magellan Mine. Subject to the payment of accrued
and outstanding interest on the Maturity Date, the Company may request an extension of the
Facility for an additional period of up to one year from the Maturity Date on the same terms. Any
such extension will remain subject to Enirgi Group’s approval, at its sole discretion.
As part of the Facility, subject to the receipt of final operating conditions and all necessary
regulatory approvals to allow Magellan Metals to recommence transportation of lead carbonate
concentrate, Enirgi Group has a one-time right to purchase up to 5,000 dry metric tonnes of
lead carbonate concentrate until December 31, 2013 at prevailing commercial market terms and
conditions, at the time such right is exercised. The prevailing market terms are not to exceed
the combined average treatment charge and average ocean freight cost per dry metric tonne for
all concentrate shipped by Magellan Metals to third parties during 2013, with all other sales
terms and conditions to be in accordance with ordinary commercial practice.
The Facility will technically constitute a “related party transaction” pursuant to Multilateral
Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-
101”) but is exempt from the formal valuation and minority shareholder approval requirements
of MI 61-101 as neither the current fair market value for the subject matter of, nor consideration
for, the Principal Sum, accrued interest and the 5,000 dry metric tonnes of lead carbonate
concentrate (as determined by the Board of Directors acting in good faith) will, in the aggregate,
exceed 25% of the Company's current market capitalization. A special committee of the
Company’s board of directors, comprised of three directors who are neither officers nor
directors of Enirgi Group or any of its affiliates, considered the reasonableness and fairness of
the Facility and it unanimously recommended to the Company’s full board of directors that the
Facility be approved. The board of directors subsequently approved the Facility (the members
of the board that would be considered interested parties having declared their interests and
abstaining from voting on the resolution approving the Facility) and there was no contrary view
or abstention by any independent director on the resolution approving the Facility.
The Facility is being made by Enirgi Group pursuant to the previously disclosed comfort letter of
Sentient Executive GP IV, Limited (“Sentient”) whereby Sentient committed to fund the
Company, through Enirgi Group, up to an aggregate of US$10 million, if, as and when needed,
during the period ending March 31, 2013. As a result, the Facility is subject to Enirgi Group’s
receipt of funding from Sentient as well as the approval of the Toronto Stock Exchange. As of
June 6, 2012, the Company had US$4.4 million in cash to fund ongoing care and maintenance
at the Magellan Mine. The Closing Date is expected to occur on or before June 30, 2012, which
will be less than 21 days from the date hereof, in order to strengthen Ivernia’s financial position.
Update on the Magellan Mine
As previously disclosed, Magellan Metals, a wholly owned subsidiary of the Company,
voluntarily halted all operations at the Magellan Mine in April 2011 and placed it under care and
maintenance. The Magellan Mine remains on care and maintenance as at June 11, 2012. Upon
the receipt of final operating conditions for the Magellan Mine from the Western Australian
Government (the “Government”), the Company expects that it will require additional future
financing in order to fund the costs involved in restarting the Magellan Mine and to repay the
Facility.
As described in the Company press releases dated October 3, 2011 and May 14, 2012, the
Environmental Protection Authority of Western Australia has released its recommendations on
the operating conditions for the Magellan Mine to the Government. As of the date hereof, these
recommendations remain under consideration by the Government. The Company does not
expect to be in a position to make a decision on restarting the Magellan Mine until after the
Government issues final operating conditions and Magellan Metals completes a review of these
final operating conditions and their potential impact on any restart plans. The Company cannot
provide guidance on the timing of the issuance of the final operating conditions by the
Government nor on their content.
Ivernia Annual General Meeting
Ivernia’s 2012 Annual General Meeting (“2012 AGM”) is scheduled for 10:00 a.m. (Eastern
Time) on Wednesday, June 13, 2012 at:
Offices of Stikeman Elliott LLP
Suite 5300, Commerce Court West
199 Bay Street
Toronto, Ontario
Management will host a webcast at its 2012 AGM commencing at 10:00 a.m. (Eastern Time)
which will include a management presentation. The meeting will be webcast live on the Ivernia
website at www.ivernia.com. A webcast replay will remain available after the meeting on the
investor relations section of the Ivernia website at www.ivernia.com.
About Ivernia
Ivernia is an international base metal mining company and the owner of the Magellan Mine,
located in Western Australia.
Ivernia trades under the symbol “IVW” on the Toronto Stock Exchange. Additional information
on Ivernia is available on the Company's website at www.ivernia.com and at SEDAR at
www.sedar.com.
For further information please contact:
Ivernia Inc.
Brent Omland
Vice President, Finance & Chief Financial Officer
Suite 3303, 130 Adelaide Street West
Toronto, Ontario M5H 3P5
(416) 867-9298
Email: investor@ivernia.ca
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking information within the
meaning of securities laws. All statements included herein (other than statements of historical facts) which
address activities, events or developments that management anticipates will or may occur in the future are
forward-looking statements, including statements as to the following: the closing of the Facility, the
duration of the suspension of the Company’s transportation of lead carbonate from the Magellan Mine, the
duration of the period of care and maintenance commenced in April 2011, future targets and estimates for
production, capital expenditures, operating costs, cash costs, mineral resources, mineral reserves, life of
mine, recovery rates, grades and prices, business strategies and measures to implement such strategies,
competitive strengths, estimated goals and plans for Ivernia’s future business operations, lead market
outlook and other such matters. Forward-looking statements are often, but not always, identified by the
use of words such as ‘‘seek’’, ‘‘anticipate’’, ‘‘contemplate’’, ‘‘target’’, ‘‘believe’’, ‘‘plan’’, ‘‘estimate’’, ‘‘expect’’,
and ‘‘intend’’ and statements that an event or result ‘‘may’’, ‘‘will’’, ‘‘can’’, ‘‘should’’, ‘‘could’’ or ‘‘might’’
occur or be achieved and other similar expressions. These statements are based upon certain reasonable
factors, assumptions and analyses made by management in light of its experience and perception of
historical trends, current conditions and expected future developments, as well as other factors
management believes are appropriate in the circumstances. However, whether actual results and
developments will conform with management’s expectations is subject to a number of risks and
uncertainties, including factors underlying management’s assumptions, such as, the pre-conditions to the
closing of the Facility, finalization and content of Magellan Metals’ final operating conditions, the duration
of the suspension of the Company’s transportation of lead carbonate from the Magellan Mine, the duration
of the period of care and maintenance commenced in April 2011, the timing and need for additional
financing, risks relating to the operations being placed on care and maintenance, matters relating the
restart of mining and milling operations, matters relating to ramping up mining and milling throughput and
operations, regulatory compliance and approvals, metal price volatility, lead carbonate concentrate
treatment charges, exchange rates, regulatory proceedings and litigation, the fact that the Company has a
single mineral property, resources and reserves, health and safety, environmental factors, mining risks,
metallurgy, labour and employment regulations, government regulations, insurance, dependence on key
personnel, constraints on cash flow, the nature of mineral exploration and development, matters relating
generally to the transportation of lead carbonate, presence of a majority shareholder, matters related to
public opinion, matters related to the Esperance settlement and shipments through the Port of Fremantle,
and common share price volatility and the dilution of the Company’s common shares. Additional factors
and considerations are discussed in the Company’s 2011 AIF and may be included in other documents
filed from time to time by Ivernia with Canadian securities regulatory authorities. While Ivernia considers
these assumptions to be reasonable based on information currently available to it, they may prove to be
incorrect. These factors may cause the actual results of the Company to differ materially from those
discussed in the forward-looking statements, and there can be no assurance that the actual results or
developments anticipated by management will be realized or, even if substantially realized, that they will
have the expected results on the Company. Undue importance should not be placed on forward-looking
information nor should reliance be placed upon this information as of any other date. Except as required
by law, while it may elect to, Ivernia is under no obligation and does not undertake to update this
information at any particular time.