NEMI cashing up to build Trend coal mine

Vancouver – A planned private placement financing coupled with a recent loan agreement has NEMI Northern Energy & Mining (NNE-A-V) looking at upwards of $50 million in its treasury to fund initial development of the Trend coal mine near Tumbler Ridge, in northeastern British Columbia.

NEMI has lined up a syndicate of underwriters, led by Salman Partners, to purchase 20 million units at $1.80 apiece for gross proceeds of $36 million through a private placement. Units will consist of one common share and a half-warrant exercisable, in full, to purchase a share at $2.10 for five years. The underwriters hold a greenshoe option allowing the purchase of an additional 7.8 million units at the issue price.

The company also recently signed a letter of intent (LOI) with a Japanese trading company that will provide a $20-million loan. The loan is convertible into NEMI common shares at the lender’s option.

The LOI has NEMI granting the lender rights to certain assets, as security, plus exclusive marketing rights to Japan for all of the company’s coal products. The lender will also get rights to market coal in certain markets outside of Japan, and will receive a marketing fee for its services.

The funds are earmarked for mine development at the Trend metallurgical coal deposit, which received provincial limited production permitting in May 2005. Initial output is anticipated by late-2005 at a rate of 240,000 tonnes annually, producing low-sulphur, medium volatile coking coal.

The company views the start of mining as a springboard towards larger-scale development of the Trend deposit. A feasibility study underway will form the basis of an Environmental Assessment certificate application leading towards anticipated permitting of a 1.5-2 million tonne per year operation by 2007.

Recent price negotiations for the current “Coal Year”, April 2005-March 2006, have NEMI receiving US$115-120 per tonne for its coking coal.

NEMI’s Trend coal deposit hosts an indicated resource of 84 million tonnes within the South Block, Extension Block and Roman zones.