CALGARY, ALBERTA--(Marketwired - March 3, 2016) - New Millennium Iron Corp. ("NML" or the "Company") (TSX:NML) has responded to the information circular recently issued by a group of dissident shareholders who have requisitioned a special meeting in an attempt to effectively take control of the Company through significant changes to the Board's composition that include four director nominees. The special meeting will be held March 15, 2016, in Toronto.
Howard Lutley, an independent director of NML and Chairman of a Special Committee responsible to coordinate and oversee the Company's response to the requisition notice from the dissident shareholders said, "The dissident group continues to make misleading statements in their effort to take control of NML's Board. In the face of difficult market conditions over the past two years, NML has taken appropriate steps to balance its short- and long-term interests, including restructuring to preserve liquidity, Board renewal and management team succession, and building on past investments to create a new strategy for monetizing the Company's taconite property assets in the Labrador Trough. In attempting to stop this momentum, the dissidents are jeopardizing NML's future and reputation by failing to acknowledge the reality of project lead times in our industry and the need for maintaining relationships with prospective business partners, governments, First Nations and communities in general."
In a letter being mailed to shareholders, NML reiterated concerns stemming from the dissidents' information circular:
NML's shareholder letter further elaborates on these concerns.
Third Party Reliance, No Plan to Create Shareholder Value and NuTac
Along with the existing Board's relevant experience and capability, NML has a management group in place that is equipped with the blend of historical experience, energy and knowledge of stakeholder relationships needed to take the Company forward. Thus, the dissidents' indicated reliance on ex-employees calls into question who and why, and also what expertise might be contributed that NML does not already possess, particularly in the case of a "hold" strategy.
Also, other than by cutting operational expenses, the dissidents present no viable plan for building shareholder value and make no mention of development of NML's principal assets - the taconite properties - in which shareholders have invested approximately $61 million since 2011. Commodity market companies with a long-term view towards building shareholder value must consider ongoing investment in advancing development of their assets, especially if, as in NML's case high quality resources, saleable product and infrastructure fundamentals are in place.
That is what NuTac is about. To completely stop NuTac without producing the technical criteria and understanding of the economics necessary to support a smaller-scale, market entry project would have the very real impact of putting NML in the vulnerable position of playing catch up to other companies who continue to advance development of their assets. And this goes beyond other Labrador Trough juniors because the true competition for NML's taconite properties is the more global group of iron ore pellet suppliers, several of which expanded capacity in 2015 and are not standing still. Even if market recovery could be some time away, the reality of Project lead times cannot be ignored.
The dissidents' repeated statements that management is self-serving with no plan for preserving working capital is completely unfounded. As pointed out in NML's Special Meeting circular, NuTac is sufficiently flexible to respond to new industry developments, particularly as iron ore prices recover, while being prepared to adapt further should they lag or decline. As evidenced by two restructurings in the past 18 months, management has ready options for preserving working capital and is prepared to use them.
Labrador Trough Peers
As a justification for stopping NuTac, the dissidents in their circular refer to companies in the Labrador Trough adopting a "care and maintenance" or "hold strategy," suggesting that NML do the same. This claim is misleading because not all of the companies in question are inactive as represented by the dissidents, and those reducing activities have done so for differing reasons.
Based on reports in the public domain, one of the companies mentioned is already favorably positioned with a project that is fully permitted and shovel ready, and as such can go no further until market and financing conditions allow. It has already achieved the market readiness that NuTac seeks for NML's taconite properties.
Another of the companies mentioned has its starter iron ore project funded to the pre-production stage, but management remains active looking at diversification opportunities. Yet another company is in the process of reconstituting a former operating mine and concentrator and recently announced the entering into of letters of intent for a financing from the Government of Québec, which is taking steps through investment during this down-cycle to support mining and infrastructure under its Plan Nord initiative, something the dissidents have rushed to negatively judge with respect to the Tata Steel-NML direct shipping ore project.
The companies forced to "hold" are without the combination of critical success factors mentioned above, being defined resources, a feasible operating plan, along with civil, rail and port infrastructure. In stark contrast, NML has all these positive attributes from investments to date and building a business development case through the present NuTac pre-feasibility study is appropriate and important.
NML's executive compensation plan and policies are detailed in the Company's information circular for the upcoming Special Meeting. In keeping with good organizational practice, the plan aims to attract and retain qualified individuals with the necessary capabilities, skills and expertise. The plan is reviewed and benchmarked by the Corporate Governance and Compensation Committee (CGCC) made up of independent directors, and approved by the entire Board.
NML's compensation has historically been benchmarked with that at peer companies having a similar business focus, including those named by the dissidents in their circular: Adriana Resources Inc., Alderon Iron Ore Corp., Century Global Commodities Corporation, Champion Iron Limited and Oceanic Iron Ore Corp. Company management structures, elements of compensation and reporting periods differ, but NML's annual compensation has historically been between the peer group's upper and lower range. The Company's executive structure and annual compensation have been reduced since 2013 in keeping with ongoing activities.
Corporate Governance and Disclosure
NML is committed to maintaining the highest standards of corporate governance. In this regard, shareholders and the financial community must recognize that our reporting requires a balance between transparency and the legal, regulatory and competitive risks of disclosing information. The dissident statement that agreements that NML has signed with strategic partners and governments have not been adequately disclosed is misleading. NML has disclosed information on all the agreements mentioned to the extent required by law, which permits NML to not disclose information if such disclosure would be seriously prejudicial to its interests (which includes competitive information) or would violate confidentiality provisions.
NML has made shareholder communication a priority as we transition from being an exploration to development stage company. A special shareholder information session was held in September 2015 and news releases have kept shareholders informed of Company developments, particularly as related to the status of its Board renewal initiative.
Support Your NML Board - Please Vote Using Your GOLD Proxy
The Board needs your support to prevent the dissident group from taking control of New Millennium at a time when experience and effective oversight have never been more important. We urge you to support the current Board and allow management and the Board to put the distraction of a proxy contest behind us and get back to building a stronger New Millennium. No matter how many shares you own, your vote is crucial to stop the dissidents from gaining control. The outcome of the vote will be determined by only the shareholders that participate.
New Millennium's Board recommends that shareholders use ONLY the GOLD proxy to vote as follows:
Proxy Voting Instructions
Regardless of how many NML shares you own, it is important you vote your GOLD proxy. Even if you have already voted using the Blue dissident form of proxy, you can still change your vote by voting the GOLD proxy, as only the latest dated proxy will be counted at the Meeting.
We encourage shareholders to vote the control number found on your GOLD proxy AGAINST the dissident resolutions and WITHHOLD for the dissident nominees as recommended by NML's Board of Directors, no later than 10:00 a.m. (Toronto time) on Friday, March 11, 2016.
NML's meeting materials, including the full letter to shareholders, are available at the company's website, www.nmliron.com or under the company's profile on SEDAR.
Proxies must be delivered to Computershare Trust Company of Canada, not less than 48 hours (excluding Saturdays, Sundays and holidays) before the time of the Meeting or any adjournment thereof. In this case, assuming no adjournment, the proxy-cut off time is 10:00 a.m. (EST) on March 11, 2016. Shareholders requiring any assistance are kindly asked to contact NML's proxy solicitation agent, Shorecrest Group. Shorecrest can be contacted toll-free in North America English at 1 888 637 5789 or French at 1-888-566-2194. Shareholders may also call collect outside North America at 647-931-7454 or by email at email@example.com.
About New Millennium
The Company is a Canadian iron ore development company with an extensive property position in Canada's principal iron ore district, the Labrador Trough, straddling the Province of Newfoundland and Labrador and the Province of Québec, in the Menihek Region around Schefferville, Québec. The Company's project areas are connected via a well-established, heavy-haul rail network to the Port of Sept-Îles, Québec, where the Company is among the investors in a new deep-water iron ore loading dock.
In addition to having a management team experienced with the technical, environmental and commercial aspects of Labrador Trough ores, the Company is in a strategic partnership with Tata Steel, a global steel producer and industry leader. Tata Steel owns approximately 26.2% of the Company and is the Company's largest shareholder.
Together through Tata Steel Minerals Canada Ltd., which is owned 94% by Tata Steel and 6% by the Company, the two companies have developed a direct shipping ore ("DSO") project that is producing and shipping sinter fines.
Beyond the DSO project, the Company offers further development potential through seven, long-life taconite properties capable of producing high quality pellets and pellet feed to service the requirements of steel makers with either blast furnace or direct reduced iron making operations. Two of these deposits -- LabMag and KéMag - were the subject of large-scale development feasibility studies carried out by the Company and Tata Steel and published in March 2014.
With these feasibility study results as a foundation and all seven taconite properties now explored to a NI 43-101 compliant resource, the Company can optimize its taconite development strategy and is currently focused on a smaller market entry project.
For further information, please visit www.NMLiron.com.
This news release contains certain forward looking statements and forward looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward looking statements. Forward looking information is often, but not always, identified by the use of words such as "could", "should", "can", "anticipate", "expect", "believe", "will", "may", "projected", "sustain", "continues", "strategy", "potential", "projects", "grow", "take advantage", "estimate", "well positioned" or similar words suggesting future outcomes. In particular, this news release may contain forward looking statements relating to future opportunities, business strategies, mineral exploration, development and production plans and competitive advantages.
The forward looking statements regarding the Company are based on certain key expectations and assumptions of the Company concerning anticipated financial performance, business prospects, strategies, regulatory developments, exchange rates, tax laws, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the ability to obtain financing on acceptable terms, the actual results of exploration and development projects being equivalent to or better than estimated results in technical reports or prior activities, and future costs and expenses being based on historical costs and expenses, adjusted for inflation, all of which are subject to change based on market conditions and potential timing delays. Although management of the Company considers these assumptions to be reasonable based on information currently available to them, they may prove to be incorrect.
By their very nature, forward looking statements involve inherent risks and uncertainties (both general and specific) and risks that forward looking statements will not be achieved. Undue reliance should not be placed on forward looking statements, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward looking statements, including among other things: inability of the Company to continue meet the listing requirements of stock exchanges and other regulatory requirements, general economic and market factors, including business competition, changes in government regulations or in tax laws; general political and social uncertainties; commodity prices; the actual results of exploration, development or operational activities; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the mining industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Company; timing and availability of external financing on acceptable terms; conclusions of, or estimates contained in, feasibility studies, pre-feasibility studies or other economic evaluations; and lack of qualified, skilled labour or loss of key individuals; as well as those factors detailed from time to time in the Company's interim and annual financial statements and management's discussion and analysis of those statements, along with the Company's annual information form, all of which are filed and available for review on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list is not exhaustive.
The forward looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward looking statements included in this news release are made as of the date of this news release and the Company does not undertake and is not obligated to publicly update such forward looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
With respect to the disclosure of historical resources in this news release that are not currently in compliance with National Instrument 43-101, a qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, the Company is not treating the historical estimate as current mineral resources or mineral reserves and the historical estimate should not be relied upon.