Chippewa Capital Partners Satisfies Terms for Mineral Lease Reinstatement
Chippewa Capital Partners Needed to Secure $850 Million
ST. PAUL, Minn. – Governor Mark Dayton announced Wednesday that Chippewa Capital Partners has satisfied all of the terms necessary to reinstate its state mineral leases, for a proposed Nashwauk mining project.
“The project’s emergence from bankruptcy in December 2017 was an important step toward Chippewa Capital Partners’ goal of finishing the plant’s construction and beginning production,” Dayton said in his release on Wednesday.
“After a detailed review, the DNR has determined that the company has satisfied those terms. Therefore, the state’s mineral leases are reinstated, which allows Chippewa to move forward with construction and production.”
Chippewa Capital Partners needed to secure $850 million in financing for the Nashwauk project to secure merits to mine in that area.
The lease agreement allows Chippewa to complete construction on a pellet plant and another facility to produce high-grade iron ore.
According to the DNR, Chippewa Capital Partners needed to satisfy all of the following terms in its settlement agreement with the state as well:
- By December 31, 2017, accelerating all remaining payments owed to contractors under the settlement agreement.
- By January 9, 2017, extending a $4 million letter of credit to the DNR to secure royalty payments.
- By May 31, 2018, executing off-take agreements for at least 4.2 MMTPA of pellets (sales contracts for at least 4.2 million metric tons per annum of pellet product).
- By May 31, 2018, executing a binding and enforceable construction agreement with a nationally-recognized Engineering, Procurement and Construction firm that is acceptable to lenders and the DNR for completion of a pellet plant.
- By June 30, 2018, securing the Superior Mineral Resources LLC’s mineral holdings at the site.
- By June 30, 2018, closing transactions for at least $850 million in binding and enforceable debt/equity commitments.
- Meeting an ongoing commitment to perform or cure all obligations arising on or after December 21, 2017 (i.e. paying royalties due to the State of Minnesota, etc.).