23rd Oct 2006 09:47
Monday, 23rd October 2006 Aquarius Platinum Agreement with Bakgaga Mining Offers Opportunity to develop prospective platinum properties in South Africa Aquarius Platinum Limited (ASX, LSE & JSE: AQP) through its wholly ownedsubsidiary Aquarius Platinum (SA) Corporate Services (Pty) Ltd ("ASACS")announces the signing of a Farm-In Agreement with Bakgaga Mining (Pty) Ltd("Bakgaga") to drill and conduct feasibility work at prospective Platinum GroupMetals (PGMs) bearing properties on South Africa's Bushveld.Bakgaga is the holder of two New Order Prospecting Rights (South AfricanMineral and Petroleum Resources Development Act 2002) over prospective PGMbearing properties to the west of the existing Lebowa Platinum Mine on theEastern Limb of the Bushveld Complex in South Africa. The rights held byBakgaga cover five farms over approximately 3,000 hectares. Based on theposition of the projected Merensky and UG2 outcrops as shown by geologicalmapping, it is estimated that the rights could cover approximately 2,000hectares each of Merensky and UG2 Reef, the two principal platinum group metalbearing reefs.Stuart Murray, CEO of Aquarius Platinum, commented "The agreement with Bakgagaoffers Aquarius a "blue sky" opportunity with the potential to increase theGroup's resources and reserves significantly. We hope that with the prospectiveproperties being so close to an existing platinum mining operations and theknowledge that there is both Merensky and UG2 reefs, we will be able reportback to the market with reports of our progress."Aquarius Platinum Bakgaga Prospecting AreasSource: Aquarius PlatinumFarm-In AgreementIn agreement between ASACS and Bakgaga provides that ASACS will offer thenecessary technical expertise and funding to assess the extent ofmineralisation on the properties and to study the feasibility of a miningproject. In return ASACS will be entitled to equity in a new company (NewCo)into which the Bakgaga rights will be transferred. ASACS's equity ownership ofnew company will increase as the feasibility work progresses.The project development follows three stages that define ASACS participationand spendingStage 1: An estimated R2.5 million will be spent by ASACS on a geological studyto determine the scope of further study work. This initial study will covergeophysics, limited drilling, analysis and testwork. In addition, ASACS willpay Bakgaga R1.2 million for existing geological information on the prospect.On completion of the pre-feasibility study ASACS will hold a 25% share in NewCoprovided that it agrees to further advance feasibility work.Stage 2: ASACS will then fund a more detailed drilling programme andfeasibility study, estimated to cost approximately R20 million. On completionof this work, ASACS will hold 40% of NewCo provided it agrees to progress to afull bankable feasibility on the prospect.Stage 3: ASACS will then upgrade the feasibility study to full-bankable statusat a cost estimated to be no more than R10 million. On completion of a bankablefeasibility study, ASACS will hold 51% of NewCo and have Board control.Shareholder AgreementUnder the terms of the Shareholder's Agreement, the expenditure for feasibilitywork by ASACS will comprise a loan to NewCo to be repaid if a mine isestablished. Protection is also established if Bakgaga is unable to fund theirshare of the project capital, whereby ASACS could fund the shortfall, dilutingBakgaga to a minimum of 26%, with the 26% funded by ASACS on behalf of Bakgagaconverting to a loan.ASACS and Bakgaga will each appoint 3 directors to the Board of NewCo, enjoyingvoting rights proportioned to shareholdings, with the Chairmanship rotatingannually.The financial exposure to ASACS is limited initially to the cost of thepre-feasibility study, the payment to Bakgaga for geological information andthe cost of the two Bakgaga employees for approximately one year, estimated intotal at R4.5million (approximately US$ 650,000).For further information please visit www.aquariusplatinum.com or contact:In Australia:Willi Boehm, Aquarius Platinum Corporate Services Pty Ltd+61 (0)8 9367 5211In the United Kingdom:Nick Bias - BuckBias [email protected]+ 44 (0)7887 920 530In South Africa:Stuart Murray, Aquarius Platinum (South Platinum) (Pty) Ltd+27 (0)11 455 20501REGISTERED OFFICEAquarius Platinum Limited ¢â€"Clarendon House ¢â€" 2 Church Street ¢â€"Hamilton HMCXBermudaEmail: [email protected]: +61 8 9367 5211REGISTERED OFFICEAquarius Platinum Limited ¢â€"Clarendon House ¢â€" 2 Church Street ¢â€"Hamilton HMCXBermudaEmail: [email protected]: +61 8 9367 5211ENDAQUARIUS PLATINUM LIMITEDRelated Shares:
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