21st Aug 2006 07:00
GVM Metals Ltd21 August 2006 21 August 2006 GVM METALS LTD ACQUISITION OF FURTHER COAL INTERESTS IN SOUTH AFRICA BOARD APPOINTMENTS GVM Metals Ltd ("GVM" or "Company"), the South African mineral processing andcoal mining company, is pleased to announce the following events in relation toits Holfontein and Limpopo coal projects. GVM has executed binding Heads of Agreement with Motjoli Resources Pty Ltd ("Motjoli") to acquire Motjoli's 51% interest in the Holfontein coal project, its50% interest in the Baobab Coal Joint Venture ("Baobab J.V.") and its 100%interest in three granted prospecting rights adjacent to those held by theBaobab J.V. The Baobab J.V holds sixteen granted prospecting rights and thetotal area of the nineteen licences covers some 31,700 hectares. The BaobabJ.V.s' coal properties are located some 40km south of GVM's existing 74% heldproperties on the Limpopo River. The consideration payable for the Holfontein and Baobab J.V. interests is34,863,226 ordinary shares plus a further 3,417,964 ordinary shares on the grantof export allocation at the Richards Bay Coal Terminal for a minimum of 100,000metric tonnes (mt) of coal per annum to GVM. Richards Bay is the major port forthe exportation of coal in South Africa. The consideration for the three Limpopo prospecting licenses owned wholly byMotjoli is GBP0.01 per defined "economic" tonne of coal established during theSoutpansberg/Baobab exploration program which should be concluded before the endof 2007. Board appointments The Managing Director of Motjoli, Mr Nchaka Moloi is to join the Board of GVM asa non-executive Director. Mr Moloi is a geologist and a former Deputy DirectorGeneral of the Department of Minerals and Energy. He is currently Chairman ofAlexkor and a Director of the Minerals Development Board and the NationalEmployment Fund. Nonqubela Mazwai, an executive director of Motjoli is to join GVM as anexecutive director responsible for the group's coal interests. Ms Mazwai is anindependent consultant and has worked with the Minister of Minerals and Energyand the Richards Bay Coal Terminal. The transactions and board appointments are subject to Ministerial consent tothe transfers, South African Reserve Bank and other necessary regulactoryapprovals, successful listing of GVM on the Johannesburg Stock Exchange (JSE),which the Company is in the process of making, and GVM shareholder approval. Thedirectors anticipate that these conditions will be concluded by the end ofOctober 2006. Coal Interests Acquired Motjoli is GVM's joint venture partner in the Holfontein coal project which islocated in the Witbank coalfield some 100kms east of Johannesburg. The projectcontains an indicated resource of 56 million tones and a Competent PersonsReport on the project is available on the Company's website, www.gvm.com.au. Ascoping study has been completed on the project based on production of 400,000mtpa of soft/semi-soft coking coal and 500,000 mtpa of thermal coal. This studyis also available on the Company's website. An infill drill program has just commenced on the Holfontein property. Theresults of this program will form the basis of the Bankable Feasability Study ("BFS"). The BFS is expected to be completed by the end of 2007. Discussionshave already commenced with Eskom, the parastatal power generation authority,regarding sale of the projects thermal coal. Based on these discussions, GVMbelieves it will be in a good position to sell all the thermal coal it canproduce at Holfontein. Strong domestic and export demand suggests a readymarket for the metallurgical coal. Motjoli's 50% interest in the Baobab J.V. with Baobab Mining and Exploration ("BME"), a wholly owned subsidiary of Petmin Ltd, consists of granted prospectingrights over sixteen farms in the Soutpansberg / Mopane coal fields locatedwithin the Limpopo Province in the north of South Africa. These farmsintermingle with or adjoin farms held by Rio Tinto as part of their ChapudiProject. The total area of these farms is in excess of 23,000 Hectares,bringing GVM's total interests in the Limpopo coalfields to approximately 32,000Hectares. The Soutpansberg Mopane Coalfield was extensively prospected by Iscor / Kumbaand others up until the early 1990's. Based on open file reports available atthe South African Council for Geoscience, the Company is confident that withfurther exploration resources on the farm will be greater than the 350 millioninferred tonne resource at Limpopo stated in the Competent Persons Report, alsoon the Company's website. On Cavan, one of the farms acquired, coal seams are reported at averaging 22metres. At Voorburg, there is a reported non JORC / SAMREC compliant resource ofnearly 400 million tonnes. The coal in the region is stated as having a sulphurcontent of between 0.96% and 1.2% and the ash content as between 10% and 12%. Simon Farrell, Managing Director or GVM said: "This is the most important stepwe have made so far in becoming a significant coal producer in South Africa. Welook forward to making further announcements regarding the development of theprojects in the near future." Contacts: Simon Farrell - GVM Metals Ltd+ 61 417 985 383 Olly Cairns - Corporate Synergy Plc+44 (0) 20 7448 4400 Leesa Peters / Abby Singleton - Conduit PR+44 (0) 20 7429 6600 /6606 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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