Tiomin Resources has halted the development of the Kwale mineral sands project in Kenya, with the company remaining in Force Majeure with the Government of Kenya. Delays and rising costs have clearly indicated that the present economics and significant issues related to the project prevent Tiomin from borrowing under the $155 million debt facility.

Under the present terms and conditions, the lenders are entitled to withdraw the debt facility. The parties have mutually agreed that Tiomin ceases paying future commitment fees related to maintaining the debt facility until the project plan is updated and significant conditions precedent, including funding of forecast cost overruns, are either satisfied, or a suitable plan to satisfy them is presented. Tiomin anticipates paying additional financing and commitment fees related to future project reviews and approvals necessary to obtain and use the debt facility.

 Tiomin anticipates completing the resettlement of the farmers displaced by the project by the end of the first quarter. It will work towards the evaluation of substantial technical and contractual cost saving measures to improve the economics of the project. Development is expected to be on hold for a minimum of seven months but Tiomin expects that strong product prices (for zircon and rutile) and reduced capital spending will revive lender interest at the appropriate time.