Platinum Exploration (PGM)

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Jonpol Explorations Limited Quick Quote: JON 0.38 (+0.01)




Elgin and Jonpol to amalgamate to acquire control over 14 million ounces of high grade platinum group metals
11/1/04

Trading Symbol: ELR (TSX-V) Trading Symbol: JON (TSX)

VANCOUVER, Nov 01, 2004 (Canada NewsWire via COMTEX) --
Mr. Ian Rozier, President of Elgin Resources Inc ("Elgin") and Mr. Gordon Keep, President of Jonpol Explorations Ltd ("Jonpol") are pleased to report that they h
ave entered into a series of agreements to merge Elgin and Jonpol and acquire a controlling interest to Platinum Group Metals mineralization ("PGMs") at the Spitzkop Platinum project ("Spitzkop") in Mpumalanga Province, South Africa. A syndicate of investors (the "Spitzkop Syndicate") had previously entered into an agreement with Impala Platinum Holdings Ltd ("Implats") to acquire the PGM rights on Spitzkop.

The Spitzkop Syndicate and its South African Black Economic Empowerment ("BEE") partners will hold the rights to Spitzkop in Spitzkop Platinum (Pty) Ltd ("Spitzplats"), a South African Corporation. Elgin has entered into a 50:50 Joint Venture with Spitzplats to explore, develop and operate the Spitzkop PGM project. Jonpol has entered into a share purchase agreement whereby it will acquire a 74% shareholding in Spitzplats. Spitzplats will qualify fully under the South African empowerment regulations.

The agreements will culminate in the proposed amalgamation of Elgin and Jonpol and the consolidation of the Spitzkop Syndicate PGM rights on Spitzkop into the merged company ("Amalco"). Amalco will control Spitzkop (12.2 M ozs PGM's) as well as the Mareesburg PGM Project (2.0 M ozs PGM's), both located on the Eastern Limb of the Bushveld Igneous Complex.

The Spitzkop PGM Project

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Spitzkop is a shallow platinum rich PGM deposit located on the Eastern Limb of the Bushveld Igneous Complex in the Steelport Valley approximately 15km southwest of the town of Steelport. Significantly, Spitzkop is only 12km north of Elgin's defined PGM Mareesburg project, (see news release dated February 12th, 2004). The immediate area is well developed as a result of other PGM and chrome mining activities in the area and Spitzkop is adjacent to, and updip from, the Kennedy's Vale deposit which lies at its south-west boundary. It is immediately north of Angloplats's De Brochen, Angloplats/Xstrata Thorncliffe and Anglovaal's Two Rivers PGM projects.

Spitzkop has been subjected to previous well documented drill campaigns by Angloplats and Implats that involved over 29,800m of diamond drilling with 166 intersections of the UG2 platinum bearing reef. An extensive technical data base exists and was used to derive resource estimates for PGM's at Spitzkop. An independent National Instrument 43-101 Technical Report has been prepared by Maynard & Associates, that includes an updated estimate of the PGM Resources at Spitzkop.

The Resource estimates reported in the NI43-101 Report are as follows;
- Based on the 166 intersections of UG2 reef, it is estimated that Spitzkop contains a total resource in the UG2 of over 41.28 million tonnes at a grade of 6.4 g/t (5PGE + Au) for 8.5 million ounces. This total resource comprises 38.65 Mt at 6.45 g/t (5 PGE + Au) in the Measured Resource category (8.02 Mozs) and 2.64 Mt at 5.67 g/t (5PGE + Au) in the Indicated Resource category (0.48 Mozs).
- The average grade of the Measured Resource in the UG2 at Spitzkop comprises; Pt (at) 2.96 g/t; Pd (at) 1.79 g/t; Ru (at) 0.88 g/t; Rh (at) 0.55 g/t; Ir (at) 0.21 g/t and Au (at) 0.07 g/t, resulting in an average grade of 6.45 g/t (5PGE + Au).
- The average grade of the Indicated Resource in the UG2 at Spitzkop comprises Pt (at) 2.62 g/t; Pd (at) 1.53 g/t; Ru (at) 0.79 g/t; Rh (at) 0.47 g/t; Ir (at) 0.19 g/t and Au (at) 0.05 g/t resulting in an average grade of 5.67 g/t 5PGE + Au.
- The UG2 reef at Spitzkop has an average thickness of 1.4m with an average dip of 11.5 degrees. The reef outcrops at surface, reaching a maximum depth of approximately 700m on the property.
- In the Merensky Reef at Spitzkop there is an estimated Indicated Resource of 47.38 Mt at 2.443 g/t (5PGE + Au) for 3.71 million ounces. The average grade of the Indicated Resource in the Merensky at Spitzkop comprises; Pt (at) 1.3 g/t; Pd (at) 0.7 g/t; Ru (at) 0.15 g/t; Rh (at) 0.07 g/t; Ir (at) 0.03 g/t and Au (at) 0.18 g/t.
- The Merensky reef is 2.3m thick with the same dip as the UG2.
While metallurgical work has not yet been completed on the project it is expected that metal recoveries will be similar to those on adjacent PGM properties and mines currently in production, with approximately 85% recovery of the reported resources.

The Company intends to focus primarily on developing the high grade resources in the UG2 reef.

The transaction over the right to Spitzkop is subject to South African regulatory approval, the transfer of the Prospecting Permit to Spitzplats by the South African Department of Mineral and Energy Affairs, and Jonpol complying with its obligations as detailed below.

Elgin's 50% Joint Venture Interest in Spitzkop

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Elgin has entered into an agreement to earn a 50% joint venture interest (the "JV") on Spitzkop with Spitzplats on the following terms and conditions;

(i) Elgin providing the initial deposit of ZAR16,000,000 (approximately US$2.5 million) to Implats as agreed between Implats and the Spitzkop Syndicate.
(ii) Elgin has to expend ZAR30,000,000 (approximately US$4.6 million) on Spitzkop to advance the project through to a Bankable Feasibility Study.
(iii) Elgin will be the operator of the joint venture.
(iv) Elgin has equal representation on the Board of Directors of Spitzplats with the right to appoint one other director upon completion of the transaction.
Jonpol's Interest in Spitzplats -------------------------------
Eastern Platinum Holdings Ltd. ("Eastplats") owns a 74% interest in Spitzplats, the joint venture company that will develop Spitzkop. Jonpol has reached an agreement with the shareholders of Eastplats to purchase a 100% interest in Eastplats.

The consideration to be paid by Jonpol to acquire Eastplats is as follows;

(i) An Option Fee of US$750,000 to be paid to the shareholders of Eastplats.
(ii) Payment of ZAR95,000,000 (approximately US$14.6 million) to Implats upon completion of the acquisition of Spitzkop by Spitzplats, being the balance of the purchase price to acquire Spitzkop.
(iii) The issuance of 75 million common shares of Jonpol to the shareholders of Eastplats.
The Elgin and Jonpol Amalgamation ("Amalco") --------------------------------------------
Elgin and Jonpol have agreed to amalgamate on the following basis:
(i) Jonpol must pay the Option Fee to the shareholders of Eastplats.
(ii) Jonpol must complete a capital raising of at least Cdn$25 million prior to closing of the Definitive Agreement between Implats and Spitzplats.
(iii) Jonpol and Elgin will amalgamate on the basis of four Jonpol shares for one Elgin share.
(iv) Jonpol will be entitled to appoint two directors to the Board of Directors of Amalco.
The above transactions are subject to shareholder and regulatory approval.

"Having acquired control of Mareesburg earlier this year, Elgin has been focused on making other complementary PGM acquisitions on the Eastern Limb of the Bushveld. Like Mareesburg, Spitzkop is a near surface, high grade, platinum rich, shallow dipping deposit in the UG2 reef. The joint venture on Spitzkop and the acquisition of Jonpol's controlling interest in Spitzplats are excellent acquisitions for the company" stated Ian Rozier, President of Elgin. "The Spitzkop acquisition puts Elgin in a very strong position with sustainable, high grade PGM deposits that can be brought into production in the near term."

"On completion of the transactions over Spitzkop and the Elgin/Jonpol merger, the new company will have control and operating rights over 10 million ounces of measured high grade PGM resource in the UG2 in addition to an additional 4 million indicated ounces in the UG2 and Merensky. The new company will be positioned as a major player in the international PGM sector and will continue to grow with the development of Mareesburg and Spitzkop and by further acquisitions and joint ventures to consolidate additional PGM deposits on the Eastern Limb", stated Gordon Keep, President of Jonpol.

Ian Rozier, M. Sc., P. Eng. is the Qualified Person who has reviewed the contents of this news release on behalf of Elgin and Jonpol.

The TSX Venture Exchange do not accept responsibility for the contents

of this news release.

VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: http://www.newswire.ca/en/releases/orgDisplay.cgi?okey=83660

For further information: Mr. Ian Rozier, M.Sc., P. Eng., President, ELGIN RESOURCES INC., [phone], Email: info(at)elginresources.com; Mr. Gordon Keep, President, JONPOL EXPLORATIONS LTD., [phone] News release via Canada NewsWire, Vancouver 604-669-7764

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