3rd Nov 2011 07:00
AFRICAN BARRICK GOLD PLC African Barrick Gold enters into iron ore rights agreement on selected exploration tenements
November 3rd, 2011
African Barrick Gold ("ABG") has today entered into an agreement with Liontown Resources Limited , which allows Liontown the opportunity to explore for iron ore deposits on certain exploration tenements held by ABG in Tanzania.
The agreement allows for Liontown to earn an interest of up to 70% of the iron ore rights on c.530km2 of land within the Masabi, Masabi Extension, Siga Hills and Siga Hills North exploration projects (see Figure 1 below). ABG will retain all rights to minerals discovered other than iron ore and by-products directly associated with iron ore mineralogy.
The principal terms of the Agreement between ABG and Liontown are:
* Assessment Stage - initial 6-month data review period to assess the available technical data to determine whether there is potential for significant iron ore mineralisation within the properties. At the end of this Stage, Liontown will be able to either define smaller Project Areas for further iron ore exploration or withdraw from the Agreement with ABG; * Initial Earn-In Stage - following the Assessment Stage, Liontown can earn 60% equity in any iron ore discovery within the Project Areas by spending $10 million within four years on exploration and resource definition; * Additional Earn-In Stage - Liontown can, at its election, increase its equity in the iron ore rights to 70% by spending an additional $10 million over a further 2-year period; and * Liontown must spend US$500,000 during the Initial Earn-In Stage before having right to withdraw from the Agreement with ABG.
This agreement provides ABG with the upside from potential iron ore mineralization on these exploration tenements, while also ensuring under the agreement that Liontown samples and assays for gold, the rights for which are retained by ABG.
ENQUIRIES
For further information contact:
African Barrick Gold plc
Andrew Wray, Head of Corporate Development & IR +44 (0)207 129 7150
Finsbury
Charles Chichester +44 (0)20 7251 3801
Figure 1: ABG tenements subject to the iron ore rights agreement
About African Barrick Gold
ABG is Tanzania's largest gold producer and one of the five largest gold producers in Africa. We have four producing mines, all located in north west Tanzania (Bulyanhulu, Buzwagi, North Mara and Tulawaka), and several exploration projects at various stages of development. With a high-quality asset base, solid growth opportunities and a clear strategy, we have the objective of increasing our existing production to one million ounces per year by 2014.
We aim to achieve this by:
* driving operating efficiencies to optimise production from our existing asset base; * growing through near mine expansion and development of advanced-stage projects; and * organic greenfield growth and acquisitions in Africa.
Maintaining our license to operate through acting responsibly in relation to our people, the environment and the communities in which we operate is central to achieving our objectives.
ABG is a UK public company with its headquarters in London. We are listed on the Main Market of the London Stock Exchange under the symbol ABG. Historically and prior to our initial public offering (IPO), our operations comprised the Tanzanian gold mining business of Barrick Gold Corporation (Barrick), our majority shareholder.
This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of ABG in any jurisdiction.
This announcement includes "forward-looking statements" that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "plans," "expect," "anticipates," "believes," "intends," "estimates" and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors, many of which are beyond the control of ABG, which could cause actual results and developments to differ materially from those expressed in, or implied by, the forward-looking statements. Factors that could cause or contribute to differences between the actual results, performance and achievements of ABG include, but are not limited to, political, economic and business conditions, industry trends, competition, fluctuations in the spot and forward price of gold or certain other commodity prices, changes in regulation, currency fluctuations (including the US dollar, South African rand and Tanzanian shilling exchange rates), ABG's ability to successfully integrate future acquisitions, ABG's ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to timely and successfully process its mineral reserves, risk of trespass, theft and vandalism, changes in its business strategy as well as risks and hazards associated with the business of mineral exploration, development, mining and production. Although ABG's management believes that the expectations reflected in such forward-looking statements are reasonable, ABG cannot give assurances that such statements will prove to be correct. Accordingly, investors should not place reliance on forward looking statements in this announcement. Any forward-looking statements in this announcement only reflect information available at the time of preparation. Subject to the requirements of the Disclosure and Transparency Rules and the Listing Rules or applicable law, ABG explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in ABG's expectations or to reflect events or circumstances after the date of this announcement. Nothing in this announcement should be construed as a profit forecast or estimate.
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