19th Jan 2005 09:00
Lonmin PLC19 January 2005 Lonmin Plc LONMIN AND INCO AGREE CANADIAN PLATINUM GROUP METALS (PGM) EXPLORATION JOINTVENTURE Lonmin Plc ("Lonmin") announces that it has entered into a joint ventureagreement (The Sudbury PGM Joint Venture) with Inco Limited ("Inco") toestablish a 50:50 unincorporated joint venture ("Venture") over six of Inco'sproperties in the Sudbury Basin, Ontario Canada.The purpose of the Venture is to explore for, and subsequently develop andprocess low sulphide PGM-rich deposits ("Deposits") occurring away from thetypical high-grade base metals deposits in the Sudbury Basin. The Venture will benefit from the combination of Inco's local expertise,experience and extensive geological database with Lonmin's technical abilitiesas a major producer of PGM. Key aspects of the Venture: •The six properties (McKim, Denison, Levack North, Capre, Trillabelle and Wisner) are considered to be highly attractive as exploration areas - the properties include the former Frood, Little Stobie, Crean Hill and Vermilion mines. •Inco will contribute the rights to explore and exploit the Deposits. The agreement includes the use of certain of Inco's infrastructure in Sudbury, including underground access. •In recognition of the assets contributed by Inco, Lonmin has committed to solely fund a minimum expenditure of US$10 million over the first three years of the Venture and, subsequently, at Lonmin's annual election, to expend a minimum of US$3 million per year. After Lonmin has solely funded expenditures of US$32 million, Inco and Lonmin will fund the Venture jointly. •The Venture will pay to Inco a 3% Net Smelter Royalty on all product sourced from the Deposits. •If appropriate, a dedicated PGM mill and concentrator will be established by the Venture to process Deposits, and potentially to process third party ore, prior to custom smelting and refining to saleable metals. •Lonmin is indemnified by Inco for environmental liabilities currently existing on the properties. •The Venture will have no material adverse effect on Inco's operations in the Sudbury Basin and Inco retains the rights to any non-low sulphide PGM deposits on the six properties. Commenting on the agreement Lonmin's CEO, Brad Mills, said: "We believe the Sudbury Basin has significant unexploited potential for thistype of PGM deposit. The Venture with Inco provides the opportunity to leverageour technical skills, extend our PGM growth profile, achieve a degree ofgeographical diversification and complement our existing joint venture withWallbridge Mining in Sudbury. We are very pleased to be associated with Inco inthis Venture." Contact: Chris Davies - VP Exploration and Business Development Lonmin Plc +44 (0)20 7201 6000 Anthony Cardew Cardew Group +44 (0) 7770 720389/+44 (0)20 7930 0777 For further information please refer to our website: http://www.lonmin.com/sudjv.asp This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Lonmin