Wits Basin PR
Wits Basin Announces Business Development Update
Wednesday September 27, 7:27 am ET
MINNEAPOLIS--(BUSINESS WIRE)--Wits Basin Precious Minerals Inc., (OTCBB:WITM - News) provides the following information regarding the development of its business.
Quarterly Milestone Achievements
First Quarter:
• Dr. Clyde Smith becomes an outside consultant to the Company
• The Bates-Hunter Mine assay results help to confirm data from historical records
Second Quarter:
• Wits Basin has warrants exercised, resulting in gross proceeds of approximately $3.9M
• The Company began its due diligence, required to be completed by 6/30/06, for the Vianey silver project located in Mexico
• Vianey due diligence completed and 50% earn in right executed on 6/28/06
Third Quarter:
• Bates-Hunter Mine surface drill program underway
• Dr. Clyde Smith is appointed the President of the Company
• Purchase agreement for the Bates-Hunter Mine using a "cash-flow" mortgage executed
As We Continue to Move Forward in the Remainder of 2006, Our Focus will be on Three Projects.
The important work to be accomplished by the commencing of the surface drilling program at Bates-Hunter Mine is underway. We see the value creation at this project being developed as follows:
• First, the search for a major gold ore body is the purpose of the surface deep drilling program now in progress.
• Second, de-watering and rehabilitation of the mine will allow for an underground drilling program that will test additional veins adjacent to the Bates Vein.
• Third, if gold ore reserves are located in adjacent veins, early production could follow.
• Fourth, discovery of major gold ore bodies could attract a major company partner or buyer of this asset.
At the silver project in Mexico, the Vianey Mine, a 3,200 meter HQ core drilling program will commence along with re-habilitation work at the mine, creating conditions needed for exploration and possible early production to begin. There are approximately 8 workers mucking out the old workings and a search is underway for a mill to be located on the site. This movement toward early production, if it occurs, would be nearly one year earlier than originally planned.
The FSC project in South Africa is in the final stages of permitting to convert old order mining rights to new order rights under the new minerals legislation introduced to South Africa in 2002. The Company is in the process of exercising the right to earn the additional 15% interest by utilizing a revised payment schedule thereby bringing our interest to 50% in the project. The capital, the drill rig and the manpower are all available to begin as soon as the permit(s) are finalized. The next drill target has been identified by our partner and operator AfriOre, and is indicated to be in the order of 8 kilometers in strike length. This target has been selected following the completion and results from Drill-hole 48 which identified Witwatersrand rock stratigraphy and follow up geophysics. It is anticipated drilling will commence during the 4th Quarter.
Liquidity Sources and Capital Needs
The Company has potential liquid resources of approximately $2.3 million. These amounts include cash, notes receivable, and standby financing agreements. Our current immediate project payments due during the 4th quarter will include $500,000 to FSC, and an additional $325,000 to Vianey and an estimated $575,000 for Bates-Hunter. Corporate expenses for the 4th quarter are estimated to be $300,000.
Additional capital could be provided to the Company in the 4th Quarter 2006 from various warrants scheduled to expire if the owners of those warrants choose to exercise them.
The Company believes these potential sources of liquidity are sufficient to fund operations into the 2nd quarter 2007.
AI
