Fairmont Acquiring Spanish Stone Producer

VANCOUVER, B.C. –Fairmont Resources Inc. agreed this week to acquire the assets of bankrupt Spanish stone quarrier/producer Grabasa for €4.275 million.

Fairmont will get Grabasa’s fully operational processing and finishing facility near Burguillos del Cerro, Spain, as well as 23 granite quarry leases and related equipment. The deal will bring Fairmont a production chain capable of an estimated 2.7-million ft² of annual production.

Fairmont plans to finance the acquisition of the Grabasa assets through debt and equity financing. Terms of the financing will be announced at a later date.

“This acquisition is a great step forward in realizing our vision of building Fairmont into a global industrial minerals company,” said Fairmont President/CEO Michael Dehn.

Fairmont, a public company (TSX VENTURE:FMR, FRANKFURT:F0O1, OTCBB:FRSSF), bid for the company out of receivership in Spanish courts, aided by Madrid-based Eureka Trading and Procana Consulting of Markham, Ontario.

Fairmont will pay €2.7 million to Grabasa for 22 mining licenses, the 452,000 ft² processing plant, land, machinery, equipment, stock and vehicles, as well as €1 million to Gesminesa (Gestion y Estudios Mineros S.A.U) of Badajoz, Spain, for the Grabasa I-B mining license. Eureka and Procana will receive €575,000 for engineering, due diligence, translation, negotiation, court fees, expenses and success fees.

In business from 1975 to 2011, Grabasa (Granitos de Badajoz S.A.) served as a key driver of economic activity in the Extremadura region of southwest Spain. Providing premium dimension stone for commercial, retail and industrial applications throughout Europe, Grabasa averaged more than €6 million in annual sales in the last five years of its operation.

In the final year of operation Grabasa’s average monthly operating costs were €217,600 and its average monthly sales were €371,475.

Critically, 18 of the 23 mining licenses, totaling 72% of the total area of Grabasa’s licenses, are within eight kilometres of the processing plant with the remaining five within 20 kilometres. The processing facility includes more than €2.2 million of new cutting and polishing equipment purchased as part of a production expansion between 2008-2010.

In the Great Recesssion, Grabasa was unable to meet its debt obligations incurred from the production expansion and was forced into receivership; until recently, its assets were locked up in court proceedings.

Fairmont’s Quebec properties cover numerous occurrences of high-grade titaniferous magnetite with vanadium. Fairmont also controls three quartz/quartzite properties in Quebec, one near Lac Saint Jean and two along the North Shore of the St. Lawrence River.

“As we move towards closing the transaction on Grabasa as well as advancing our Quebec projects, we feel confident that Fairmont will grow to be the go to industrial minerals company for dense aggregate, quartzite for ferro silicon and granite,” Dehn said. “We also continue to look for undervalued production and near-term production opportunities.”