Wits Basin PR
Wits Basin Announces Business Development Update
Monday January 22, 9:11 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 Gold Project, Colorado, 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 June 30, 2006, for the Vianey Silver-Lead-Zinc Project, Mexico
• Vianey due diligence completed and option to earn up to 50% of project acquired on June 28, 2006
Third Quarter:
• Purchase agreement for the Bates-Hunter Gold Project using a "cash-flow" mortgage announced
• Bates-Hunter surface drill program underway
• Dr. Clyde Smith is appointed the President of the Company
Fourth Quarter
• "New Order" five-year permit issued by government for the Wits Basin-AfriOre International Ltd. joint venture on the FSC Gold Project, South Africa
• Wits Basin earns initial 25% of Vianey Project
• Vianey assay results released
• Wits Basin announces Memorandum of Understanding (MOU) for merger discussions with EasyKnit (EK) Enterprises, Hong Kong
As we continue to move forward in 2007 our operating focus will be on three projects and the MOU discussions with EK will be fully explored.
The important work to be accomplished by the commencement of the surface drilling at the Bates-Hunter Gold Project is underway. We see the value creation at this project being developed as follows:
1. The search for a significant gold ore body is the purpose of the surface deep drilling program now in progress. Over 2,000 feet of an 8,000 foot drill program have been completed. The drillers returned to the site the second week of January after a three-week holiday break.
2. De-watering and rehabilitation of the mine will allow for an underground drilling program that will test additional veins adjacent to the Bates Vein.
3. If gold ore reserves are located in adjacent veins, early production could follow.
4. Discovery of significant gold ore bodies could attract a major company partner or buyer of this asset.
5. Other local area property opportunities will be explored as they develop.
6. Mutually agreed closing date extension till May 31, 2007 to allow increased water treatment benefits for our property and the surrounding area.
On the Vianey Silver-Lead-Zinc Project, drilling for phase one has recently been completed and mine re-habilitation work is underway to create conditions needed for additional exploration, development and potential production. The phase one core drilling assay reports are being finalized by Rodney Blakestad, the project Consulting Geologist, and will then be reviewed by Dr. Smith. These reports are expected to be released in the near term. The Phase two underground drilling is planned to be underway with a target date of completion prior to September 2007. Wits Basin intends to exercise its option to acquire the next 25% of its joint venture with Journey Resources Corp. of Vancouver, B.C., bringing its ownership to 50%.
The FSC Gold Project in South Africa is now preparing for drilling. With the announced sale of our joint venture partner, AfriOre, we are in discussions with the planned new partner to determine timing and next steps to earn our additional 15% through the next phase of exploration drilling.
MOU with EasyKnit
Three company directors are currently en route to Hong Kong to meet with the board of EasyKnit Enterprises to discuss the terms of the potential merger. Wits Basin has engaged the services of Troutman Sanders, an Atlanta-based law firm with Hong Kong offices, to be special counsel for the purpose of reviewing any and all needed steps to completing a merger. We expect to complete this trip on or about February 5, 2007.
Liquidity Sources and Capital Needs
From the end of the 3rd Quarter until now, the company has collected proceeds from warrant exercises of approximately $1,000,000 and has commitments for approximately $600,000 more. There have been expressions of intent to exercise an additional $1,200,000 of warrants (not yet registered) in the first half of 2007. Unused project related standby financing remains at $1,000,000.
Our current immediate project payments planned during the 1st and 2nd quarter will include $500,000 for FSC, $400,000 for Vianey and an estimated $575,000 for Bates-Hunter. Corporate expenses for the 1st and 2nd quarter are estimated to be $400,000.
The Company believes the above described sources of liquidity will be sufficient to fund operations through the end of the 2nd quarter 2007 without raising capital.
