November 24, 2009
EMC Announces Acquisition Of The Technology Store, Inc.
Vancouver, British Columbia - November 24, 2009 -- EMC Metals Corp. (TSX: EMC) is pleased to announce that it has entered into a stock purchase agreement (the "Agreement") with Willem and Irene Duyvesteyn (the "Sellers") dated November 19, 2009, whereby EMC has agreed to purchase all of the issued and outstanding capital stock of The Technology Store, Inc., a Nevada corporation, from the Sellers in exchange for 19,037,386 common shares of EMC.
Background of TTS
The Technology Store, Inc. ("TTS"), incorporated in 2000, specializes in the development of specialty metals extractive technologies, with emphasis on improving recoveries in the extraction of tungsten, boron, lithium, scandium, titanium, and nickel and a host of other emerging and unusual metals. The acquisition of TTS by EMC will provide EMC with access to certain assets used in connection with mining activity, as well as exclusive access to the extraction technologies. In addition TTS provides technical know-how which complements EMC's existing technical team, and also provides access to strategic acquisition or participation opportunities in resource projects targeting specialty metals, including boron, lithium and scandium.
Other assets of TTS include five nickel extraction licenses and 560 cubic feet of ion exchange resin prepared by Dow Chemical, which was acquired by TTS from BHP Billiton, having a current market value of over US$2 million. Ion exchange resin is used in the extraction of various specialty and rare metals, including nickel, tungsten, molybdenum, and vanadium. The resin would be available to EMC in connection with future production. In addition, TTS has the right to receive a US$2.5 million bonus payment in connection with a contract with a major US based oil company.
Three of TTS's current research projects that following the acquisition EMC will have exclusive access to are summarized below:
1. TTS has a proprietary technology to extract boron out of waste brines. The waste brines are created in the production of various minerals from brines. These brine layers occur in many parts of the world;
2. TTS is developing technology to extract scandium from primary scandium deposits and from nickel-scandium laterites. While the technology has not been fully defined, TTS has successfully extracted scandium from these deposits on a small scale using this technology; and
3. TTS has performed scoping tests on a titanium deposit with unsolved and unusual metallurgical challenges with encouraging results.
TTS is also in the process of preparing and filing patents related to an agreement with a major US based oil company for the extraction of bitumen from oil sands and for the cracking of heavy oil into lighter components. None of the patents related to oil or oil sands technologies will be retained by TTS, however as noted above, TTS's agreement includes potential future bonuses in the event certain commercial hurdles are met, namely breaking ground for construction of several commercial plants. These bonuses have a value of up to US$2.5 million and the right to these future potential bonuses would remain with TTS as a wholly owned subsidiary of EMC. TTS has the right to claim these bonuses up to 10 years after termination of this agreement, with the agreement set to expire on December 19, 2009.
TTS has a further 26 chemical and mineral commercial processing projects in various stages of development that may potentially be patented following additional laboratory and support work.
Information on Willem Duyvesteyn
Mr. Willem Duyvesteyn is the principal of TTS, and will on closing of the acquisition be appointed to the board of EMC. Mr. Duyvesteyn has 40 years experience in the mining, mineral and energy industries. He has been involved in the invention of 41 patents for various metallurgical extraction processes, and is the primary inventor on almost all of these patents. Prior to his involvement with TTS, Mr. Duyvesteyn was Vice President and General Manager of Minerals Technology with BHP Billiton for 10 years. Prior to his time with BHP Billiton, he was the Acting Dean of the Delft University of Technology School of Mines, and held positions with various mining and engineering companies. Mr. Duyvesteyn is a member of several technical organizations in the mining, processing and chemical fields, including AIME, CIM, IMM, AlChE and ACS. As a result of his technical knowledge and experience in the industry, Mr. Duyvesteyn has numerous business opportunities, technologies and business contacts which will benefit EMC.
"The acquisition of TTS provides EMC with exclusive access to extractive technologies that would give EMC a competitive advantage in connection with future production from our existing resource property interests, as well as in connection with the acquisition of new projects targeting scandium, boron and titanium", said Mr. Peter Bosse, President. "TTS, through Mr. Willem Duyvesteyn, also provides EMC with a unique opportunity to access advanced specialty metals properties for the purpose of diversifying our current property portfolio".
The Agreement
Pursuant to the terms of the Agreement, EMC will on closing acquire the shares of TTS by issuing 19,037,386 common shares of EMC, paying US$500,000 in cash to the Seller, and paying an amount of US$302,358 representing the U.S. federal income taxes payable by the Seller as a result of the issuance of the shares of EMC to the Seller. In addition, EMC will issue to the Seller a promissory note in the amount of $500,000 with a principal maturity of 2 years and accrued interest paid annually at bank prime interest rate in effect on the closing date. EMC's obligations under the promissory note and certain cash payments to the Seller will be secured by a pledge of all of the shares in the capital stock of EMC's subsidiaries in accordance with a stock pledge agreement and a security interest in all of EMC's assets in accordance with a security agreement.
In accordance with the terms of the Agreement, EMC will enter into a consulting agreement with Mr. Duyvesteyn, whereby EMC will grant to Mr. Duyvesteyn 200,000 stock options of EMC, to be issued in 4 equal instalments over 2 years. The options will be exercisable at a price equal to the volume-weighted average price of EMC's common shares listed on the Toronto Stock Exchange for the 10 trading days preceding the effective date of the consulting agreement, and will be exercisable for a period of 5 years.
EMC and the Seller will also enter into a voting agreement, whereby the Seller will be granted the right to elect one director when EMC has six or fewer directors, or two directors when EMC has seven or more directors.
The closing of the transaction is subject to approval by the Toronto Stock Exchange.
About EMC Metals Corp.
EMC Metals is a specialty metals company mandated to realize opportunity from the extraction and processing of specialty metals. EMC Metals also holds two major properties, the Carlin Vanadium project and the Springer Tungsten Mine and Mill. Originally constructed by the General Electric Company in 1980, the Springer project boasts a fully permitted and renovated 1,200 tpd mill facility. EMC Metals acquired Springer in 2006 and has spent approximately $38 million to date on its rehabilitation and expansion.
This press release does not constitute an offer of securities in the United States. The securities referenced herein have not been and will not be registered under any federal or state securities law of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
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