On March 6, 2011, New Millennium Capital Corp. (TSX V:NML) announced it has signed a binding heads of agreement with Tata Steel Global Minerals Holdings Pte Ltd to develop the LabMag and KéMag iron ore deposits, known collectively as the Taconite Project. The remainder of the Millennium Iron Range will be retained by New Millennium Capital .
Under the binding heads of agreement, Tata Steel will participate in the development of a feasibility study of the Taconite Project and contribute towards 64% of the costs related thereto. The parties would enter into a binding joint venture agreement upon the successful completion of the feasibility study and Tata Steel electing to develop one or both of the deposits. After formation of the joint venture, New Millennium Capital is expected to hold a 36% equity interest in the Taconite Project, including a 20% free carry equity interest. In addition, New Millennium Capital will have a 4% right of first refusal on future equity sales by Tata Steel to increase its equity interest to a maximum of 40%.
Tata Steel will arrange the required equity portion of the financing (excluding New Millennium Capital’s optional equity interest) based on a maximum capital expenditure of up to $4.85 billion if both deposits are developed and up to $4.68 billion and up to $3.76 billion respectively, if only the KéMag or LabMag deposits are developed.