SANTIAGO, Chile, Sept. 14, 2005 (PRIMEZONE) -- White Mountain Titanium Corporation (Pink Sheets:WMTM) announced today that it has completed a US$500,000 debt for equity private placement with Phelps Dodge Corporation (NYSE:PD), a major international mining company. The financing relates to an outstanding balance owed to Compania Contractual Minera Ojos del Salado (CCMO), a wholly owned subsidiary of Phelps Dodge, in respect of the purchase of White Mountain's principal asset, the Cerro Blanco titanium property in Chile.
Under the terms of the private placement, White Mountain issued 625,000 convertible preferred shares and a like number of common share purchase warrants to Phelps Dodge. Each preferred share is convertible into one common share and each warrant allows the holder to purchase one common share at an exercise price of US$1.25 per share for a period of four years from the closing date. The preferred shares are entitled to vote and receive dividends with the common stockholders on an as converted basis. The terms of this financing are identical to those concluded with a major European institutional investor on a US$5,000,000 equity financing announced in a separate news release dated July 12, 2005.
Commenting on the most recent financing, Michael P Kurtanjek, President of White Mountain said: "Completion of this financing is another milestone for our company. We now own the property outright with no buy-back or royalty provisions, an important underpinning for the company's greater strategy to build a specialized mineral producer. We are also pleased to have added Phelps Dodge to our shareholder roster."
White Mountain Titanium Corporation is a U.S. incorporated company which is advancing the Cerro Blanco property towards a development decision. Exploration to date has identified a rutile resource of 116 million tones, grading 2.1% TiO2. Management is focused on executing a series of marketing, geological, engineering and environmental programs with a target of completing a bankable feasibility study by late 2006.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainty. The Company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include, but are not limited to, the general; risks of conducting mining operations which could cause injury or death, environmental damage, delays in mining, monetary losses, and possible legal liability; uncertainties inherent in estimating quantities of reserves, declines in the market price of titanium, conducting operations in a foreign country, failure to successfully implement the company's proposed mining plan, competition with larger, better financed mining companies, difficulty in raising funds to bring the mining property into development; compliance with environmental and other regulations in Chile necessary to commence operations, the global economy in general; delays in, or the inability to, register the shares for placees, failure to obtain a listing on a senior stock exchange, and the loss of current management.