17th Oct 2006 13:19
Lonrho Africa PLC17 October 2006 LONRHO AFRICA PLC ("Lonrho" or "the Company") URANIUM LICENCES GRANTED FOR BRINKLEY MINING PLC Lonrho is pleased to announce that Brinkley Mining Plc ("Brinkley"), in whichLonrho has a 9.8% interest, has been granted a number of key prospecting rightsfor uranium in the Karoo region of South Africa by the Republic of SouthAfrica's Department of Minerals and Energy ("DME"). Lonrho's Joint Executive Chairman and Chief Executive, David Lenigas, commented: "This is a key milestone for Brinkley, as very few prospecting rights overuranium fields in South Africa have been granted by the DME to date. This willenable Brinkley to proceed with the task of drilling and defining the ultimatepotential of these high quality uranium prospects." The full text of Brinkley's announcement is as follows: Brinkley Mining Plc ("Brinkley Mining", "Brinkley" or "the Company") Initial South African Uranium Rights Granted The Company is pleased to announce that the Republic of South Africa'sDepartment of Minerals and Energy ("DME") has granted a prospecting right fortwo portions of the Waterval Prospect (comprising Portion 9 of Branderwyns Ghat214 and the Remainder of Portion 3 of Branderwyns Ghat 214), and the Remainderof Portion 1 of Langleegte 304 of the Rietkuil Prospects to Brinkley Mining'ssubsidiary, Western Uranium (Proprietary) Limited ("Western Uranium"). The DME has requested that any outstanding matters regarding the application arefinalized and that any further relevant documents are submitted to the DME byno later than 13 November 2006. The DME will sign the right on or before 30November 2006. Brinkley believes that currently there are no outstanding mattersand that the signing of the right will proceed on schedule. In the Competent Persons Report prepared by SRK Consulting as set out in theCompany's admission document dated 31 May 2006, SRK Consulting reported thatthe Waterval Farm (in respect of which Western Uranium has now been awarded the prospecting rights over two of the three portions, equivalent to 2,515 hectaresof the total 3,601 hectares applied for) has non-compliant historical mineralresources of between 39,000 and 50,590 tonnes of uranium and molybdenum mineralisation with an insitu grade of 1,690 and 1,820 parts per million ("ppm")of Uranium Oxide. SRK Consulting estimated Brinkley's exploration potential onthe whole of the Waterval Farm to be between 10 million and 21 million lbs ofUranium Oxide. In relation to the Rietkuil Farm (in respect of which Western Uranium has nowbeen awarded the prospecting rights over one of the three portions, equivalentto 218 hectares of the total 7,341 hectares applied for), SRK Consultingreported that the prospect has non - compliant historical mineral resources of1,152,115 of uranium and molybdenum mineralisation with an insitu grade of1,788 ppm of Uranium Oxide. SRK Consulting estimated Brinkley's exploration potential on whole of the Rietkuil Farm to be between 12 million and 25 millionlbs of Uranium Oxide. In its reporting of resources over the Waterval Farm and Rietkuil Farmprospects, SRK Consulting did not assign historical resources and estimationsof exploration potential to specific portions of the farm, and as such at this stage there is not a specific resource assigned to each portion of theprospects. Western Uranium applied for prospecting rights in aggregate over five farms inthe Karoo made up of 22 portions which are considered to host significanturanium resources. Western Uranium owns the freehold on the Waterval Farm which encompasses two of the granted portions. The Waterval Farm was historicallydrilled by Essex Minerals Company in the late 1970s. The third portion grantedis located on the prospective Rietkuil Farm which Western Uranium has sole ownership rights to. The Company has also today partnered with an additional HistoricallyDisadvantaged South African ("HDSA") partner, Summer Days Trading 3(Proprietary) Limited ("Summer Days"). A new Shareholders Agreement has beensigned which complies with new Black Economic Empowerment policies proposed bythe DME. Summer Days is a HDSA women's group based in Cape Town whose directorsinclude Ms Ncedi Mayekiso and the former mayor of Cape Town, Ms Noma-IndiaMfeketo. Under the terms of the new Shareholders Agreement, in the initial period until adecision is made to develop a project (a "Development Decision"), BrinkleyMining will own 49% of Western Uranium, Summer Days will own 26% and Blue Nightingale 709 (Proprietary) Limited ("Blue Nightingale") will own 25%. As thesingle largest shareholder in Western Uranium, Brinkley Mining retains Boardcontrol and the right to appoint the Chief Executive Officer. During the exploration phase prior to the Development Decision, Summer Days andBlue Nightingale will benefit from a 26% free carried interest in WesternUranium. Brinkley Mining will fund Summer Days' and Blue Nightingale'sadditional contributions by way of a loan. This loan will be non-recourse toSummer Days and Blue Nightingale in the absence of a Development Decision butwill be repaid from 70% of cash flow due to Summer Days and Blue Nightingaleonce production has commenced. Once a Development Decision has been made Brinkley Mining has no ongoingobligations to maintain a free carried interest or provide loan finance toSummer Days or Blue Nightingale but will assist them to procure finance. Western Uranium's current budget to carry out the work necessary to reach aDevelopment Decision on the prospecting rights over five farms in the Karoo isin the vicinity of £4 million. In recognition of Summer Days contribution in the process of applying for andreceiving prospecting rights, Brinkley Mining has agreed to issue, subjectinter alia to approval by the South African Reserve Bank, 6.5 million newBrinkley ordinary shares to Summer Days at par value. These shares will besubject to a 12 month lock-in arrangement from the date of issue. A furtherannouncement will be made in due course. Gerard Holden, Non-Executive Chairman of Brinkley Mining commented: "We aredelighted to have been granted our first prospecting rights and look forward tothe processing of the remaining applications. These rights now provide us withthe opportunity to commence our exploration and evaluation program on thesestrategic assets for South Africa." Qualified Person Kiran Morzaria B.Eng (ACSM), (FGS), MBA, has reviewed the information containedin this announcement. Kiran holds a Bachelor of Engineering (IndustrialGeology) from the Camborne School of Mines and an MBA (Finance) from CASSBusiness School. He has compiled, read and approved the technical disclosure inthis regulatory announcement. -END- For further information, please contact: Lonrho Africa Plc +44 (0)20 7016 5105David Lenigas, Chief Executive +44 (0)7881 825 378Emma Priestley, Executive Director +44 (0)7867 785 177 Strand Partners Limited +44 (0)20 7409 3494Simon RaggettMatthew Chandler Cardew Group +44 (0)20 7930 0777Nadja Vetter +44 (0)7941 340 436Eden Mendel +44 (0)7887 676 603Emma Consett +44 (0)7971 468 308 Notes to Editors Lonrho is in the process of re-establishing a significant presence on theAfrican continent. Its investment and acquisition strategy, which was adoptedfollowing the appointment of David Lenigas as Chairman and Chief Executive andsubsequent shareholder approval in February 2006, focuses on the naturalresources, infrastructure, leisure and agribusiness sectors. Lonrho's executiveteam has considerable experience across these industries in a wide range ofcountries. This year, the Company has announced investments in Brinkley MiningPlc, Nare Diamonds Ltd, Luba Freeport in Equatorial Guinea and Fly540 (a lowcost start-up airline based in Kenya). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Lonrho