Great Western Minerals Group Ltd. is pleased to announce that it has signed a non-binding Letter of Intent to acquire all of the issued and outstanding shares of Less Common Metals Ltd. (“LCM”) of Birkenhead, United Kingdom, subject to the required regulatory approvals in the UK and Canada. The purchase price of this acquisition is Pounds Sterling 4,000,000 or approximately C$7,800,000, with closing anticipated on 18 June 2008.
Founded in 1992, LCM is a profitable, private company with excellent long-term relationships with many blue-chip market-leading customers across a wide range of industries including automotive, aerospace, nuclear and defense. One of LCM’s key clients is Aichi Steel Corporation of Japan, one of the Toyota Group Companies. Aichi uses LCM products in high efficiency, low weight, permanent magnet motors for ancillary equipment used in the latest vehicles manufactured by Toyota.
LCM is a leading, global manufacturer and supplier of rare earth based alloys, high purity metals, and ultra-high-purity indium. Other specialty alloys produced at the state-of-the-art plant in Birkenhead include neodymium-iron-boron and samarium cobalt alloys for the permanent magnet industry, magneto-optic and magnetostrictive materials, hydrogen storage systems and master alloys used in the production of other specialty alloys. LCM’s production of samarium cobalt accounts for 20% of global demand. Additional information about LCM can be obtained from www.lesscommonmetals.com.
LCM management expects to produce 430 tonnes of alloy and metals in the twelve months ending June 30, 2008. The production capacity of the plant is approximately 1,100 tonnes per annum and the plant is very well positioned to increase production to meet the demand for rare earth alloys from key clients. This ability to increase production will play a significant role in the implementation of GWMG’s “mine to market” business model should the Hoidas Lake rare earth deposit, and the Company’s other REE-related projects including Deep Sands, be successfully brought on-stream to provide the raw material for rare earth metals and alloys.
As a result of strong demand for its products, LCM’s revenue for fiscal year ending June 30, 2008 is expected to be approximately Pounds Sterling 9.8 Million (C$ 19.1 Million), up from Pounds Sterling 5.4 Million (C$10.5 Million) for fiscal year 2007.
GWMG and LCM are especially pleased to report that the entire management and staff of 27 highly skilled and dedicated personnel at LCM will be staying on and will continue to operate the Birkenhead plant.
The purchase price of Pounds Sterling 4,000,000 will be satisfied as follows: (i) Great Western has obtained a senior debt facility of Pounds Sterling 2,700,000 secured against the assets of LCM, of which Pounds Sterling 2,000,000 will be applied to the purchase price, with the balance to be used as working capital for operations; and (ii) the issuance by GWMG of a Pounds Sterling 2,000,000 convertible debenture to the vendors of the LCM shares. GWMG will also issue 750,000 common share purchase warrants to the vendors.
Mr. David Kennedy, Founder and Managing Director of LCM, sees this as a great match. Kennedy says, “Joining Great Western Minerals Group opens up the prospects for the long term strategic supply of key rare earth raw materials for LCM. This is of great interest to existing and potential customers as this alliance has the potential to secure the critical raw materials for key industries long into the future.”
Mark Ellis, President and CEO of Great Western Technologies Inc. agrees: “The tremendous synergy and complementary capabilities that exist between LCM and Great Western Technologies creates so many mutually beneficial opportunities for LCM, Great Western Technologies, and all of our clients. LCM brings to this transaction a solid base of blue-chip, global customers and an established magnet business; That, combined with GWTI’s existing client base and proven capabilities in the battery sector, presents great collaborative potential for all of us.”
Jim Engdahl, President and CEO of GWMG is very pleased with the deal and the new relationships and opportunities. Engdahl says, “As with most acquisitions, it is the people that are important, and this purchase adds another dimension of intellectual knowledge and goodwill to GWMG with regards to specialty metals and, in particular, the Rare Earth industry. We are extremely impressed with the quality and dedication of the staff that David Kennedy has assembled and how well they fit in with GWMG’s “mine to market” strategy. We are also extremely impressed with the caliber of clientele that LCM brings to the table, and we look forward to long-term and mutually beneficial relationships with all of them.”
Great Western Minerals Group Ltd. is a Canadian based company exploring for, and developing, strategic metal resources in North America. Pursuing a vertically-integrated business model, the Company’s wholly-owned subsidiary Great Western Technologies Inc., located in Troy, Michigan, produces a variety of specialty alloys for use in the battery, magnet and aerospace industries. These “designer” alloys include those containing copper, nickel, cobalt and the rare earth elements.
Jim Engdahl, President
Great Western Minerals Group Ltd.
Manager of Investor Relations
Great Western Minerals Group Ltd.
226 Cardinal Crescent
Source: Great Western Minerals Group Ltd.