Eastern Platinum Limited: News Release Made in Compliance with AIM Re-Admission Policy Requirements
Friday July 14, 2:00 am ET
LONDON, ENGLAND--(CCNMatthews - July 14, 2006) - Eastern Platinum Limited ("Eastplats" or the "Company") (TSX:ELR - News; AIM:ELR), the AIM and TSX listed platinum group metal explorer today announces the re-admission of its existing common shares of no par value ("Common Shares") and admission of the New Common Shares (as defined in the Admission Document addressed to shareholders of the Company ("Shareholders") dated 10 July 2006) to trading on AIM.
On 2 May 2006, Eastplats announced the completion of a transaction to acquire the entire shareholding of three private companies, the combined assets of which represent a 69% interest in Barplats Investments Limited ("Barplats"), a platinum group metals ("PGM") producing company in South Africa. Details of the acquisition were reported in news releases dated February 15, 2006, March 16, 2006, and March 29, 2006 and the transaction had been completed in accordance with the terms as set forth in the news release of February 15th, 2006.
On the closing of the transaction, Mr. Brian Bayley and Mr. Jon Harris resigned as directors of the Company and Eastplats appointed three new directors to the board; Mr. Allen Palmiere, Mr. Jeffrey Ahbe and Mr. John Hawkrigg which was previously announced on 2 May 2006.
Ian Rozier, President of Eastplats, commented:
"With the completion of the $150 million capital raising, the closing of the transaction and the new appointments to the Board of Directors, Eastplats is very well equipped to become a high profile player in the world's PGM sector."
The AIM Admission document is available on the Company's website at www.eastplats.com.
Terms of the acquisition
Consideration for the acquisition was 288,585,122 shares of Eastplats and a cash payment of Cdn$27,708,597.
About Barplats
Barplats is a mining company listed on the JSE and trades under the symbol BLP. Barplats' core business is the mining and processing of PGM in South Africa's Bushveld Igneous Complex ("the Bushveld"), the largest source of PGM in the world. Barplats' two main assets are the Crocodile River mines on the western limb of the Bushveld located near Brits in the Northern Province and the Kennedy's Vale project on the eastern limb of the Bushveld located near Steelpoort in Mpumalanga Province, which is immediately adjacent to Eastplats' Spitzkop project. Crocodile River was re-commissioned using traditional mining methods and became profitable in 2005, and includes the Maroelabult and Zandfontein mines and the Crocette deposit.
"This acquisition will establish Eastplats as a current producer and significant player in the platinum sector. We become an immediate producer with significant production growth under development with an established operations and development team at Barplats, and effect a synergistic merger of the Spitzkop and Kennedy's Vale deposits. We do not contemplate any management changes at Barplats and look forward to working with the Barplats team to become a major producer of platinum as we continue to grow the current production at Crocodile River and move the Kennedy's Vale/Spitzkop complex into production," stated Ian Rozier, President of Eastplats.
"In less than two years we have acquired a resource base comprising 86 million PGM oz contained in shallow, high grade, platinum and rhodium rich deposits. On the Western Bushveld, the Crocodile River mines will become significant producers of PGM. On the Eastern Bushveld, Kennedy's Vale and Spitzkop can be combined into a single operation that will form one of the largest underdeveloped deposits in South Africa. With this transaction we are one step closer to our corporate objective to grow Eastplats into a major PGM producer."
The enlarged group
Introduction
The Elgin Resources Inc. ("Elgin") business concept was to acquire high grade, platinum rich PGM deposits in South Africa focussing on the eastern limb of the Bushveld Complex, which management regarded as being relatively undeveloped. In acquiring such PGM deposits the intent was to develop the Company into a consolidator of similar projects in the area thereby achieving growth by acquisition rather than exploration.
Management achieved their initial goals by acquiring three PGM projects in the eastern limb. The Company's entry into the South African PGM sector was via the acquisition of the Rooikraal Platinum Project, a prospective exploration target for PGM. This was followed in February 2004 when the Company successfully bid for the Mareesburg PGM Project, which it acquired from Samancor Limited (an affiliate of BHP-Billiton Ltd). Subsequently management identified a second PGM deposit in the eastern limb of the Bushveld Complex, the Spitzkop PGM Project, in which the Company acquired a controlling interest in October 2004.
Company History
On 2 March 2005 Elgin and Jonpol Explorations Limited ("Jonpol") signed the Amalgamation Agreement which provided for the amalgamation of the two companies to create Eastplats. The principal features of the Amalgamation were that the shares of each of Elgin and Jonpol were exchanged for shares of Eastplats on the basis of one common share of Eastplats for every issued and outstanding common share of Elgin, and one common share of Eastplats for every four issued and outstanding common shares of Jonpol. The property, assets and liabilities of each of Elgin and Jonpol became those of Eastplats.
Having raised Cdn$150 million in March 2006, the Company acquired a 100 per cent. interest in each of three private companies that in aggregate own 210,000,000 common shares of Barplats, representing a 69 per cent. interest in Barplats. Such acquisition was approved by the Company's shareholders by way of written consent. Barplats was incorporated as a public company in South Africa on 5 October 1987 and listed on the JSE in 1987. Barplats is a PGM producing company whose two main assets are the CRM Project and the Kennedy's Vale Project.
Overview of the South African Platinum industry
There are only four known PGM provinces in the world. By far the largest is the Bushveld Complex in South Africa, which covers a surface area of 60,000 sq.km with outcrop extremities of approximately 450km east west and 300km north south.
Overview of the Projects
The Spitzkop PGM Project
The Spitzkop PGM Project is a shallow platinum-rich PGM deposit located in the Steelpoort Valley approximately 15km southwest of the town of Steelpoort, which is rapidly developing into a major mining district with platinum and chrome mining currently underway and a number of possible new platinum mines being investigated and developed. The majority of these platinum mines are planning to mine the UG2 chromitite horizon in the area adjacent to the Spitzkop PGM Project.
Mareesburg PGM Project
The 2,129-hectare Mareesburg property lies in the southern part of the eastern limb of the Bushveld Complex, approximately 50km west of Lydenburg. Like the Spitzkop PGM Project, the Mareesburg PGM Project is adjacent to both Angloplats' proposed new platinum mine at Der Brochen, and the Aquarius Platinum Limited Everest North project.
Eastplats owns the rights to a 50 per cent. interest in the Mareesburg PGM Project, acquired in February 2004 from Samancor Limited, by way of a 50:50 joint venture with Lion's Head Platinum Pty Ltd. ("LHP"). Two other agreements enabled Eastplats to purchase a 51 per cent. interest in LHP, which holds a 50 per cent. interest in the project, thus increasing the Company's interest in the Mareesburg Platinum Project to 75.5 per cent.
CRM Project
The CRM Project is situated on the eastern portion of the western limb of the Bushveld Complex, in the North West Province, covering an area of 1,077 hectares. As a result of the Acquisition, Eastplats holds a 69 per cent. interest in Barplats which owns the CRM Project. The CRM Project was re-commissioned using traditional mining methods and became profitable in 2005, and includes the Maroelabult and Zandfontein sections and other near surface deposits including the Crocette deposit.
Kennedy's Vale Project
The Kennedy's Vale Project is situated on the eastern limb of the Bushveld Complex, in Mpumalanga Province, covering an area of 2,003 hectares. As a result of the Acquisition, Eastplats holds a 69 per cent. interest in Barplats which owns the Kennedy's Vale Project. As the Kennedy's Vale Project is adjacent to the Spitzkop project it is anticipated that there will be synergies from merging the Spitzkop and Kennedy's Vale deposits into a single operation.
Current and Proposed Development
A JORC-code compliant feasibility study will be undertaken on the Spitzkop and Kennedy's Vale PGM Projects. Phase 1 work will involve pre-feasibility technical work that was scheduled to commence in late 2005 early 2006. A regional office along with core storage and secure sample preparation facilities was acquired in January 2006 and rock core drilled by previous operations (Anglo and Impala) will be stored there, along with drill core recovered from the 2006 drilling program. This work will comprise confirmatory drilling to be conducted using large diameter diamond core for the purposes of recovering samples for confirmatory assay analysis and metallurgical test work, as well as for geotechnical/rock mechanics work and for the placement of hydrogeological monitoring instrumentation wells for ongoing environmental purposes. Metallurgical test work is required to confirm the anticipated high recovery factors as indicated from metallurgical data previously reported by Impala. The drilling will also be aimed at conducting further geological studies with respect to estimated geological losses prior to the re-estimation of Resources/Reserves. Much of the required environmental monitoring work and base-line studies for the project area are available as public documents produced by other operators in the immediate vicinity to Spitzkop. Phase 2 full feasibility work is anticipated to commence in the latter half of 2006 and will be based on the results of the pre-feasibility test work. There will be a certain amount of overlap of Phase 1 and 2 technical work. Phase 2 will also include mine permitting aspects as well as surface infrastructure and socio-economic studies for the proposed mine at Spitzkop. The Company anticipates that this technical work on the Spitzkop/Kennedy's Vale PGM Project will be completed in the middle of 2006 and progress into full feasibility to be complete in 2007. All work on the project will be conducted by reputable consulting engineering companies in their respective fields of expertise. With the synergies of the Spitzkop and Kennedy's Vale Project, this study will become an integrated study in order to optimize the economic benefits of the potential development of the two projects concurrently or as one combined operation.
A JORC-Code compliant feasibility study is currently being undertaken on the Mareesburg PGM Project by SRK Consultants, who are supervising all quality analysis and quality control requirements to meet these standards and have also been engaged to undertake the orebody modelling, geotechnical, hydrogeological, environmental and mine design (open pit and underground) aspects. This work is already well advanced and preliminary reports are being completed with the data from 33 diamond drill holes (approximately 3300 m) being input into the feasibility study. This drill sampling will provide core samples for assaying, geotechnical testing and metallurgical tests to determine the design parameters from pilot plant trials on bulk samples. In addition, the Company is also conducting aeromagnetic surveying and detailed Digital Terrain Modeling ("DTM") data for open pit modeling and mine design purposes.
The Company anticipated that an interim report on the Mareesburg PGM Project would be completed in the latter half of 2005 and progress into full feasibility. SRK, the Company's consultants in South Africa are currently preparing the feasibility study and as of 1 May 2006 are applying metal prices to the economic model. Several mining options are being evaluated, as well as toll treatment of mine product by third parties.
Current Trading and Prospects
In the period to 31 December 2005, Barplats has processed 577,559 tonnes of raw materials, more than double the 210,403 tonnes treated in the six month period ended June 2005. A total of 1,167 kg 5PGE+Au were sold in the period, generating revenues of R167.3 million and giving a net loss of R395.5m. Net assets for the period to 31 December 2005 were R270.6m. Rising dollar metal prices over the period boosted revenues generated in the six month period, which were some 400 per cent. higher than the total revenue for the year ended June 2005. Unit costs have decreased from R302,564/kg in the period ended June 2005 to R128,850/kg sold in the period to 31 December 2005.
The Management Team
Ian Terry Rozier, M.Sc., B.Sc. Hons, P.Eng.
President and Executive Director (appointed as Director of Elgin on 5 September 2003 and as President of Elgin on 9 January 2004).
Mr. Rozier is a professional geologist with over 25 years experience in the mining industry. Formerly with Goldfields of South Africa and a partner of Golder Associates he worked for, or was a consultant to, several major mining companies until 1987. He has several years underground mining experience in South Africa and has been involved in the exploration and development of PGM deposits in Canada, South Africa and the Philippines. He has been involved in many capital raisings in Canada and Europe for mining projects in Australia, the Far East, South America as well as South Africa and is well known in the Canadian mining industry.
David William Cohen, MBA, B.Sc., (Chem. Eng.) PR.Eng.
Non-Executive Director and Chairman (appointed as Director of Elgin 29 October 2003 and as Chairman of Eastplats on 28 April 2006).
Mr. Cohen, has over 20 years experience in the mining industry. Formerly with Fluor Engineers, he worked in South Africa as Director, Sales & Marketing and as Director of Business Development in the United States. Mr. Cohen is President and CEO of Northern Orion Resources (TSX:NNO - News) and largely responsible for the dramatic turn-around in the company's fortune, with major resource acquisitions, capital raisings and excellent performance in 2002-2006. Through his work with Northern Orion, David Cohen is well known in the North American and European capital markets.
Gordon Bruce Keep, MBA, B. Sc., (Geological Sciences) P Geo.
Non-Executive Director (appointed as Director of Jonpol on 5 November 2003).
Mr. Keep's career in corporate finance has spanned over 20 years, where his responsibilities have included financings, mergers and acquisitions and public company administration. Currently he is Managing Director Corporate Finance of Endeavour Financial Ltd. and previously, he held positions as Senior Vice President of Lions Gate Entertainment Corp. and Vice President of Corporate Finance with Yorkton Securities Inc.
Allen Joseph Palmiere, B.Comm, CA.
Chief Executive Officer and Executive Director (appointed as Director and CEO on 28 April 2006).
Mr. Palmiere is currently Executive Chairman of Barplats and Chairman of HudBay Minerals Inc, a fully integrated zinc and copper company. Mr. Palmiere has over 20 years experience and was formerly Chief Financial Officer of Zenex Corporation, a TSX and NYSE listed company, and CEO and CFO of Breakwater Resources. Mr. Palmiere has a Bachelor of Commerce degree and is a member of the British Columbia Institute of Chartered Accountants.
Mr. Palmiere has a letter of appointment dated 29 April 2006 which provides for him to act as Director of the Company for a fee determined by the compensation committee of the Company's board of Directors from time to time.
Jeffrey Belton Ahbe, B.Sc M.Sc,
Non-Executive Director (appointed as Director on 28 April 2006).
Mr. Ahbe is President of Ahbe Capital Investment Group Inc., has over 25 years experience in the energy and resource sector and was formerly Executive V.P. of Union Pacific Resources in Calgary, Alberta, Canada, a $3.5 billion oil and gas business. He has worked extensively with the international financial and investment banking community, and in various regulatory jurisdictions. Mr. Ahbe has Bachelors and Masters Degrees from Purdue University.
Mr. Ahbe has a letter of appointment dated 29 April 2006 which provides for him to act as Non-Executive Director of the Company for a fee determined by the compensation committee of the Company's board of Directors from time to time.
John Richard Hawkrigg, B.A.,
Non-Executive Director (appointed as Director on 28 April 2006).
Mr. Hawkrigg is a Managing Partner of HKMB International Insurance Brokers, Canada's largest privately owned commercial insurance brokerage, and has over 20 years experience in the insurance industry. He holds a B.A. from McMaster University in Ontario, Canada.
Mr. Ahbe has a letter of appointment dated 29 April 2006 which provides for him to act as Non-Executive Director of the Company for a fee determined by the compensation committee of the Company's board of Directors from time to time.
Officer
Barbara Eileen Dunfield, MBA B.Ed.,
Chief Financial Officer (appointed as CFO of Elgin on 26 May 2004).
Ms. Dunfield, has over 20 years experience in capital markets, business development, and corporate governance of public companies and is currently the director of several public companies in the resource sector. Ms. Dunfield's MBA thesis at Simon Fraser University was entitled "A Strategic Analysis of the PGM Industry" (2001).
Transaction StatisticsNumber of Common Shares is issue (undiluted) 513,228,821
Number of Share Options in issue 17,180,000
Number of Warrants in issue 87,999,374
Number of Common Shares in issue (fully diluted) 618,408,195Expected TimetableAdmission and dealings in the Common Shares
expected to commence on AIM 14 July 2006
This announcement does not constitute an offer to sell or the solicitation of an offer to buy these securities in any jurisdiction.
The foregoing information may contain forward-looking statements relating to the future performance of Eastern Platinum Limited. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities regulatory authorities in Canada, which filings are available on SEDAR at www.sedar.com.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction. The Common Shares will not and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.
This announcement has been issued by the Company and is the sole responsibility of the Company. Canaccord is regulated in the United Kingdom by the Financial Services Authority and is acting solely for the Company in connection with the Admission and no one else. Canaccord has been appointed as nominated adviser and broker to the Company. Canaccord will not regard any other person as its client or be responsible to any other person for providing the protections afforded to clients of Canaccord nor for providing advice in relation to the Admission.
Canaccord is not making any representation or warranty, express or implied, as to the contents of this announcement. Canaccord accepts no liability whatsoever for the accuracy of any information or opinions expressed in this announcement or for the omission of any information.
Contact:
Mr. Ian Rozier
Eastern Platinum Limited
President and Executive Director
(604) 685-6851
(604) 685-6493 (FAX)
www.eastplats.com
Mike Jones / Robin Birchall / Clayton Bush
Canaccord Adams Limited
+44 20 7518 2777
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Source: Eastern Platinum Limited
