GRAND RAPIDS, Minn., May 21, 2013 /PRNewswire/ -- Magnetation LLC (Magnetation) announced today that it has successfully completed a $325 million senior secured notes offering and has entered into a $50 million senior secured credit facility. The proceeds from the notes offering will be used for capital expenditures to construct a new concentrate reclamation plant northwest of Coleraine, Minnesota and a new manufacturing plant in Reynolds, Indiana to produce high-quality iron ore pellets, a critical steelmaking raw material. Production from the pellet plant will supply AK Steel's blast furnaces located in Ohio and Kentucky.
In addition, Magnetation announced today that it has received a $50 million contribution from AK Steel as part of AK steel's remaining $150 million commitment to Magnetation LLC. Thus far, AK Steel has invested approximately $200 million of a planned $300 million. AK Steel will contribute the final $100 million during 2014 or as needed to support the construction of the new pellet plant.
"We are excited to announce that our expansion projects are now fully funded," said Larry Lehtinen, CEO of Magnetation. "With this financing secured, we anticipate producing high quality fluxed pellets during the fourth quarter of 2014. Upon startup of the pellet plant and Plant 4, Magnetation will become a 4 million tonne per year iron ore producer employing about 500 people, providing high quality iron oxide pellets to AK Steel, low residual iron ore concentrate to AHMSA of Mexico and high grade iron oxides to various specialty market customers. We couldn't be more pleased with the progress made by all of our team members and stakeholders."
Magnetation LLC is a joint venture between Magnetation, Inc. (50.1% owner) and AK Steel Corporation (49.9% owner). Magnetation LLC reclaims high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. Currently, Magnetation LLC owns and operates two reclamation plants located in Keewatin, MN and Taconite, MN. Magnetation LLC is constructing a 3 million metric tonne per year iron ore pellet plant in Reynolds, Indiana and an additional concentrate reclamation plant located northwest of Coleraine, MN. Additional information about the company is available at www.magnetation.com.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, infrastructure and manufacturing, construction and electrical power generation and distribution markets. The company employs about 6,100 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate headquarters in West Chester, Ohio. AK Steel also owns 49.9% of Magnetation LLC, a joint venture headquartered in Grand Rapids, Minnesota, which produces iron ore concentrate from previously mined ore reserves. Additional information about AK Steel is available on the company's web site at www.aksteel.com.
This news release is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy Magnetation's senior secured notes. Magnetation's senior secured notes were offered solely to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons outside the U.S. under Regulations S of the Securities Act. Magnetation's senior secured notes were not registered under the Securities Act or the securities laws of any other jurisdiction. As a result, they may not be offered or sold in the United States or to any U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
SOURCE Magnetation LLC