VANCOUVER, BRITISH COLUMBIA (TSX VENTURE: TRX) is pleased to
announce that the Company has entered into a letter agreement in
respect of a loan guarantee and a joint venture option agreement
(the "Agreement") with majority shareholder Goldcorp Inc.
("Goldcorp") (TSX: G)(NYSE: GG) for the commercial development of
its 100%-owned Mt. Milligan Copper-Gold Project (the "Project") in
British Columbia, Canada.
Under terms of the Agreement, Goldcorp will guarantee a
non-revolving term credit facility of up to $40 million, or US
dollars equivalent, to further advance the Company's long lead-time
capital equipment procurement program in support of the
construction of a 60,000 tpd open pit mine and process plant at Mt.
Milligan. The loan will have an 18 month term and be underwritten
by the Bank of Montreal with BMO Capital Markets as the lead
arranger and sole book runner.
The Agreement also provides Goldcorp with a one-time option (the
"Option") to convert its fully diluted in-the-money equity interest
in the Company into a participating joint venture interest in the
Project. The Option can only be exercised during the term of the
credit facility and then, only if Goldcorp's resulting joint
venture interest will be greater than 30% and less than 60%. Upon
exercise of the Option, among other terms and conditions,
Goldcorp's 240 million Convertible Preferred shares in the capital
of the Company would be cancelled and the parties would develop and
operate the Project under a joint venture operating agreement. The
party holding the majority participating interest would be operator
of the joint venture.
A Special Independent Committee of the Board, assisted by
Paradigm Capital Inc. and Stikeman Elliot LLP, has determined that
the Agreement is fair and in the best interests of the Company. In
addition, the Agreement has the unanimous support of the Company's
Board of Directors. Goldcorp shall be entitled to nominate two
individuals for approval as members of the board of directors of
Terrane from the time Terrane has obtained all required regulatory
and shareholder approvals until the time the Option is exercised.
Upon the exercise of the Option, the two Goldcorp nominees shall
resign from the board of Terrane and the joint venture shall be
governed by a management committee comprised of representatives
from each of Terrane and Goldcorp. Terrane currently expects to
hold a meeting of shareholders in July 2008, as the transaction is
subject to minority shareholder approval.
Robert Pease, President and Chief Executive Officer of Terrane,
stated: "Substantial capital investment, time and expertise are
required to build a mine at Mt. Milligan. As a result this deal
makes a lot of sense for both Goldcorp and Terrane. We welcome the
immediate financial support of our majority shareholder and look
forward to a strong working partnership over the months ahead as we
advance the Project through permitting and into construction."
"We are pleased with the progress on Mt. Milligan," said Kevin
McArthur, President and Chief Executive Officer of Goldcorp. "These
first steps not only allow us to financially support the
development of Mt. Milligan but also provide Goldcorp with the
option to participate in its future commercial operation. We are
very pleased with our investment in Terrane."
Conference Call
Terrane will host a conference call on Tuesday, May 27, 2008 at
8:00am PDT. Rob Pease, President and Chief Executive Officer of
Terrane along with Chuck Jeannes, Executive Vice President,
Corporate Development of Goldcorp will discuss the proposed
Agreement.
Call-in information is as follows:
Toll Free Dial-in Numbers (within the US and Canada): 1 800 743
4304
International Dial-in Number: +1 212 231 2901
The conference call will be archived for replay until Tuesday,
June 3, 2008, at midnight. To access the archived conference call,
listeners can dial 1 416 626 4100 or 1 800 558 5253 and enter
passcode 21383635 followed by #. Additionally, a recording of the
call will be available on the Company's website
http://www.terranemetals.com.
About the Company
Terrane Metals Corp. is an exploration and mine development
company focused on the development of the Mt. Milligan copper-gold
and Berg copper-molybdenum-silver projects in British Columbia,
Canada. Goldcorp Inc. owns a 58% equity interest in the Company on
a fully diluted basis.
TERRANE METALS CORP.
Robert Pease, P.Geo, FGAC, President and CEO
Cautionary Note Regarding Forward Looking Statements
Except for the statements of historical fact contained herein,
the information presented in this News Release constitutes
"forward-looking statements" as such term is used in applicable
Canadian laws. These statements relate to analyses and other
information that are based on forecasts of future results,
estimates of amounts not yet determinable and assumptions of
management. In particular, statements concerning Mineral Resource
and Mineral Reserve estimates should be viewed as forward-looking
statements to the extent that they involve estimates of the
mineralization that will be encountered if the property is
developed. Any statements that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions or future events or performance (often, but
not always, using words or phrases such as "expects" or "does not
expect", "is expected", "anticipates" or "does not anticipate",
"plans", "estimates" or "intends", or stating that certain actions,
events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved) are not statements of historical fact
and should be viewed as "forward-looking statements".
Such forward looking statements, including but not limited to,
those with respect to the price of metals, the amount of estimated
mineralization and of contained metals and the timing of and
possible outcome of pending economic evaluations and other factors
and events described in this News Release, involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such risks and other factors include, among others, the
actual results of exploration activities; variations in the
underlying assumptions associated with the estimation or
realization of Mineral Resources and Mineral Reserves, the
conclusions of economic evaluations and possible variations in ore
grade or recovery rates; costs and timing of the development of new
deposits; availability of capital to fund programs and the
resulting dilution caused by the raising of capital through the
sale of shares; accidents, labour disputes and other risks of the
mining industry including without limitation those associated with
the environment, delays in obtaining governmental approvals,
permits or financing or in the completion of development or
construction activities, title disputes or claims limitations on
insurance coverage. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements contained in this News Release and in any document
referred to in this News Release.
Forward looking statements are made based on management's
beliefs, estimates and opinions on the date the statements are made
and the Company undertakes no obligation to update forward-looking
statements if these beliefs, estimates and opinions or other
circumstances should change, except as required by applicable
law.
The TSX Venture Exchange does not accept responsibility for the
adequacy or accuracy of this release.
Contacts: Terrane Metals Corp. Rob Pease President and CEO (604)
681-9930 or Toll Free: 1-866-681-9930 Terrane Metals Corp. Ryan
King Investor Relations (604) 681-9930 or Toll Free: 1-866-681-9930
Website: www.terranemetals.com