TORONTO, ONTARIO -- (Marketwire) -- 12/17/12 -- All Dollar Amounts are in U.S. Dollars ("US$") Unless Otherwise Indicated
Ivernia Inc. ("Ivernia" or the "Company") (TSX: IVW) today announced that following review and recommendation by a committee of its independent directors and approval by the board of directors, it has entered into the management services agreement (the "Enirgi Agreement") with Enirgi Group Corporation ("Enirgi Group") referred to in its October 11, 2012 press release. Under the Enirgi Agreement, it is proposed that Ivernia's officers will be employed by Enirgi Group, and will, as employees of Enirgi Group, manage the business and affairs of Ivernia. As well, day to day management for the operation of Ivernia's, 100% owned, lead mining operations located in Western Australia will be provided by Enirgi Metal Group Pty Ltd. ("EMG") under a management services agreement between EMG and Ivernia's wholly-owned subsidiary Rosslyn Hill Mining Pty Ltd. ("RHM", the "EMG Agreement", and together with the Enirgi Agreement, the "Agreements"). EMG is a wholly owned subsidiary of the Company's majority shareholder, Enirgi Group.
Under the Agreements, Ivernia retains full ownership of the mine. The entering into of the Agreements will have no impact on Ivernia's status as a reporting issuer, or its TSX listing. The boards of directors of each of Ivernia and RHM will be responsible for the direction and supervision of the duties of Enirgi Group and EMG, respectively, under the Agreements.
The Agreements provide for payments in respect of the services provided on a cost-recovery only basis, with no mark-up, and are terminable by either party on 90 days' notice.
Pursuant to the Enirgi Agreement, Enirgi Group will be responsible for providing the necessary officers responsible for (among other things) general management and executive services for Ivernia, including strategic and business planning functions, accounting, treasury and other day-to-day matters. Enirgi Group will report and be accountable to Ivernia's board of directors.
Under the EMG Agreement, EMG will take the leading role in managing the restart of operations at the mine, including the design of the organizational structure, with a restart of operations planned in stages during the second quarter of 2013 with full production levels targeted by the end of 2013. Certain RHM employees may either transfer or be seconded to EMG in order to perform similar services for EMG. EMG will report and be accountable to RHM's board of directors, which is directly accountable to Ivernia's board of directors.
EMG, led by Managing Director, Todd Vains, is the largest secondary lead smelting group in Australia with its two secondary lead smelters and used lead acid battery collection business in Eastern Australia and has a wealth of knowledge and experience in the lead industry. Under the EMG Agreement, EMG expects to deliver increased technical and operating experience, executive management and economies of scale from being part of a larger group.
The restructuring of operations under the Agreements is expected to deliver significant cost savings to Ivernia and RHM. Management estimates that this restructuring, once fully implemented will lead to direct cost savings in the range of approximately $3 million to $4 million per annum.
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