Morien Provides Project and Corporate Update
Morien Provides Project and Corporate Update
January 8, 2019 – Halifax, Nova Scotia – Morien Resources Corp. ("Morien" or the
"Company") (TSXV:MOX), today provided an update with respect to the Company’s projects
and ongoing corporate activities.
Donkin Coal Mine
Kameron Collieries ULC (“Kameron”), an affiliate of The Cline Group LLC, and
owner/operator of the Donkin Coal Mine (“Donkin” or the “Donkin Mine”) in Cape Breton,
Nova Scotia, has temporarily suspended production at Donkin due to a roof collapse in an older
part of the mine. The incident occurred on December 28, 2018 during Kameron’s scheduled
holiday shutdown and no workers were injured. Kameron has been directed by the Nova Scotia
Department of Labour to review a variety of engineering and operational measures designed to
monitor, control and prevent future mine roof falls. Production at Donkin is expected to resume
after Kameron and government inspectors are satisfied that the appropriate measures are in
place. Kameron’s top priority is the safety of its 128 employees and contractors and it will
resume operations as soon as practicable. Morien welcomes Kameron and the Nova Scotia
government’s commitment to safety and will provide further updates as they become available.
Kameron continues improvements in productivity. In December 2018, it installed a continuous
haulage Flexible Conveyor Train (“FCT”) coal mining system to replace part of Donkin’s shuttle
car fleet. The FCT was approved by the Nova Scotia Department of Labour in December and is
expected to significantly increase production volumes in 2019 once production resumes and
hence export sales.
In 2018, Kameron signed a multi-year, thermal coal offtake agreement with local power utility,
Nova Scotia Power Inc., for a portion of Donkin production. The majority of Donkin coal is and
will be sold overseas either as a high quality metallurgical coal and/or as a low ash, high-energy
thermal coal.
On January 4, 2018, it was reported that Provincial Energy Ventures Ltd. (“PEV”) is proceeding
with the first phase of its $75 million expansion of its export facility in Sydney, Cape Breton.
PEV is located approximately 30 kilometres from the Donkin Mine and is currently responsible
for handling all of the exported coal from Donkin. Once complete, the PEV port will be capable
of accommodating larger, Capesize vessels and is expected to have the capacity to export up to 3
million tonnes of Donkin coal annually. A new, dedicated coal haul road that will by-pass
certain communities along the truck route between the Donkin Mine and PEV is expected to be
complete in Q2 2019.
Morien owns a gross production royalty for the Donkin Mine of 2% on the revenue from the first
500,000 tonnes of coal sales per calendar quarter, net of certain coal handling and transportation
costs, and 4% on the revenue from any coal sales from quarterly tonnage above 500,000 tonnes,
net of certain coal handling and transportation costs. The royalty is payable to Morien on a
quarterly basis over the anticipated 30+ year mine life. Morien’s royalty payments from
Kameron have increased from $4k in Q2 2017 to $241k in Q3 2018.
Production at Donkin is anticipated to reach annual sales volumes of 2.7 to 3 million tonnes over
the next two years. While it is assumed that production at Donkin will resume in a timely
manner, the timing of production recommencement is unknown at present and may delay the rate
of production increases. Should Kameron’s production schedule change, Morien management
will provide revised guidance when supporting information becomes available, which could be
materially different from prior guidance. Using a wide range of coal pricing (CAD $65 to $115
per tonne), annual royalty payments could be in the order of CAD $5.0 to $9.0 million at full
production of approximately 3 million tonnes per year. These values are only estimates based on
assumptions Morien management consider reasonable, as of Q1 2019, and would only be
achieved if and when Donkin reaches permitted production levels (1). Actual results and royalties
received, if any, subject primarily to production rates and coal pricing, may vary from those
estimated by Morien. As a public company, Morien incurs general and administrative expenses
that are necessary for the collection of the aforementioned royalties. See the advisory below
regarding Forward-Looking Statements.
(1) The above technical disclosures are consistent with the information in the technical report titled “Technical
Report, Donkin Coal Project, Cape Breton, Nova Scotia, Canada” dated November 2012, found on Morien’s
SEDAR profile.
Black Point Aggregate Project
Morien owns a 50+ year production royalty on the Black Point Aggregate Project (“Black
Point”) in Guysborough County, Nova Scotia, owned by Vulcan Materials Company (“Vulcan”),
the United State’s largest aggregate producer. Black Point is permitted and, although production
has not yet begun, Morien is currently receiving advanced quarterly minimum royalties of CAD
$25,000, which will be credited against future production royalties. In April 2018, Vulcan was
granted a 2-year extension by the Nova Scotia provincial government for Black Point and must
commence work on Black Point by April 2020 unless granted a further extension.
Project Generation
Morien continues to search for royalty assets to complement its existing royalty portfolio. The
Company is focused on acquiring long-life, cash-flowing royalties in the industrial mineral and
bulk commodity market segments in North America.
Land Holdings
Morien is currently pursuing options for the sale of 1,054 acres of land in Georgia, USA.
Normal Course Issuer Bid
Morien’s Normal Course Issuer Bid (“NCIB”) purchased 1.6 million common shares between
April 2018 and January 8, 2019. Since the NCIB started in 2015, Morien has purchased 9.9
million, or 17%, of its common shares at an average price of $0.36 per share. Morien considers
its common shares to be trading at prices that do not reflect the underlying value of its royalty
portfolio, its strong and growing financial position and its growth opportunities. Morien intends
to renew its NCIB after the current NCIB expires on January 31, 2019. The Company’s cash
position allows for continued share purchases without adversely affecting its other opportunities.
However, future purchases will be based on market conditions, share price, best use of available
cash, and other factors. All common shares acquired under the NCIB are cancelled.
Quarterly Dividend
In 2018, Morien paid quarterly dividends of $0.0025 per common share. It is Morien’s intention
to pay a quarterly dividend of $0.0025 per common share in Q1 2019. The Company anticipates
increasing the quarterly dividend amount commensurate with Donkin M ine production
expansion, having regard to the stability of cash flow and the need to maintain flexibility to
secure new royalty assets. However, the declaration, amount and timing of any future dividends
will be subject to the Board's determination that the payment of a dividend is in the best interest
of Morien and its shareholders, having regard to the Company’s cash reserves, anticipated
financial requirements, legal requirements for the declaration of dividends and other conditions
existing at such time, including forward production guidance from Kameron.
Corporate Update
The Company granted options to Susanne Willett, Morien’s Chief Financial Officer, pursuant to
the Company’s stock option incentive plan and related to Susanne’s appointment to the CFO
position in Q3 2018. The option grant consisted of 200,000 options, each exercisable for one
common share of the Company until January 7, 2024 at an exercise price of $0.48. The options
vested immediately.
Qualified Person
Dawson Brisco, P.Geo. (Nova Scotia), President and CEO of Morien, is a Qualified Person as
that term is defined in National Instrument 43-101 and has reviewed and approved the scientific
and technical information contained in this news release.
About Morien
Morien is a Canada based, dividend paying, mining development company that holds royalty
interests in two, long life, world class, tidewater accessed projects. The Donkin Coal Mine
commenced production in 2017 and the Black Point Aggregate Project was permitted in 2016
and is progressing toward a development decision. Morien’s management team exercises
ruthless discipline in managing both the assets and liabilities of the Company. The Company’s
management and its Board of Directors consider shareholder returns to be paramount over
corporate size, number or scale of assets and industry recognition. Morien has 53,131,114 issued
and outstanding common shares and a fully diluted position of 57,523,614. Further information
is available at www.MorienRes.com.
Forward-Looking Statements
Some of the statements in this news release may constitute "forward -looking information" as
defined under applicable securities laws. These statements reflect Morien's current expectations
of future revenues and business prospects and opportunities and are based on information
currently available to Morien. Morien cautions that actual performance will be affected by a
number of factors, many of which are beyond its control, and that future events and results may
vary substantially from what Morien currently foresees. Factors that could cause actual results to
differ materially from those in forward -looking statements include risks and uncertainties
described in Morien’s annual information form filed with the Canadian Securities regulators on
SEDAR (www.sedar.com) on April 26, 2016. Morien cautions that its royalty revenue will be
based on production by third party property owners and operators who will be responsible for
determining the manner and timing for the properties forming part of Morien’s royalty portfolio.
These third party owners and operators are also subject to risk factors that could cause actual
results to differ materially from those predicted herein including: volatility in financial markets
or general economic conditions; capital requirements and the need for additional financing;
fluctuations in the rates of exchange for the currencies of Canada and the United States; prices
for commodities including gold, coal and aggregate; unanticipated changes in production,
mineral reserves and mineral resources, metallurgical recoveries and/or exploration results;
changes in regulations and unpredictable political or economic developments; loss of key
personnel; labour disputes; and ineffective title to mineral claims or property. There are other
business risks and hazards associated with mineral explo ration, development and mining.
Although Morien believes that the forward-looking information contained herein is based on
reasonable assumptions, readers cannot be assured that actual results will be consistent with such
statements. Morien expressly disclaims any intention or obligation to update or revise any
forward-looking information in this news release, whether as a result of new information, events
or otherwise, except in accordance with applicable securities laws. All dollar values discussed
herein are in Canadian dollars. Any financial outlook or future-oriented financial information in
this news release, as defined by applicable securities laws, has been approved by management of
Morien as of the date of this news release. Such financial outlook or future -oriented financial
information is provided for the purpose of providing information about management's current
expectations and plans relating to the future. Readers are cautioned that such outlook or
information should not be used for purposes other than for which it is disclosed in this news
release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
For more information, please contact:
Dawson Brisco, President & CEO
Phone: (902) 403-3149,
or
John P.A. Budreski, Executive Chairman
Phone: (416) 930-0914
www.MorienRes.com