1st May 2008 07:00
Churchill Mining plc01 May 2008 1 May 2008 Churchill Mining plc Spitfire Resources Limited Update Churchill Mining plc draws shareholders' attention to the following quarterlyupdate released by Spitfire Resources Limited ("Spitfire") on the ASX yesterday.Churchill Mining plc (AIM:CHL) holds a 35.6% interest in Spitfire. Enquires: Churchill Mining Plc Blue Oar Securities Parkgreen CommunicationsManaging Director - Paul G. Mazak Romil Patel Justine Howarth / Ana Ribeiro+62 81510539186 / + 62 21 39832398 +44(0)20 7448 4000 +44 (0) 20 7851 [email protected] Olly Cairns +61 (0)8 6430 1631 Spitfire Resources Limited Quarterly update to March 2008 Highlights Corporate • Spitfire secures strategic support of diversified Norwegian-based metals and alloys group, Tinfos AS, via A$1.73M share placement at 20 cents. • Leading French mining and metals company Eramet SA subsequently reaches agreement to acquire Tinfos' business and operations for €593 million, subject to approvals. • Spitfire confirms 1-for-3 entitlement of 20c options expiring 30 June 2010. • Cash reserves of A$7.1 million at the end of the Quarter. South Woodie Woodie Manganese • Exploration field team mobilized and exploration camp established in preparation for the 2008 exploration field season. • Spitfire more than doubles its existing East Pilbara land holdings by applying for a strategic 899km2 ground package to the south east of South Woodie Woodie. • Initial 7,000m RC drilling program commences on 28 April with the program encompassing seven defined targets. Overview The March 2008 Quarter was Spitfire Resources' first full quarter as anAustralian Securities Exchange-listed exploration company. The principal focusof activity was preparing for the commencement of the 2008 exploration fieldseason at the South Woodie Woodie Manganese Project in the East Pilbara regionof Western Australia. The Company also completed a strategic review of its entire ground holdings andexploration strategy, and secured an important addition to its ground positionto the south east of the South Woodie Woodie Project. Quarterly update 1. Corporate Tinfos AS becomes major shareholder A key highlight of the quarter was the announcement that Spitfire had securedthe strategic support of the diversified Norwegian-based industrial, trading andmetals & alloys group, Tinfos AS, as a major shareholder by way of a shareplacement. Spitfire agreed to place 8.65 million shares at 20c to Tinfos, raising $1.73million, making Tinfos Spitfire's second largest shareholder with 12.3% of thecompany's expanded share capital. The shares issued pursuant to the placementwere allotted on 17 March and Tinfos lodged a substantial shareholder notice on27 March. The proceeds of the share placement increased Spitfire's cash reserves to A$7.1million at the end of the March 2008 Quarter, providing a strong foundation forthe Company's 2008 exploration program at the South Woodie Woodie Project. Tinfos AS is a holding company with a portfolio of businesses includingindustrial export-orientated operations and international trade. Originallyestablished in the 19th century as a hydro-electric power generation company,Tinfos is today a leading diversified industrial, trading and metals & alloysgroup which generated sales revenue in excess of NOK7 billion in 2007. The Group's industrial operations are conducted through Tinfos Jernverk AS,which produces manganese alloys, and Tinfos Titan & Iron, which producestitanium iron and pig iron. Tinfos Jernverk AS is a major player in theproduction of silico-manganese, an alloy used in the making of steel. TheCompany is a world leader in the production of low-carbon silico-manganese forprimarily stainless steel. Tinfos's manganese plant is located in Kvinesdal onthe southern tip of Norway making it ideally placed to ship alloy products toEurope. Spitfire believes Tinfos's specialist knowledge of the global manganese marketcombined with its strong balance sheet will increase the range of developmentoptions open to the Company moving forwards. Tinfos also understands and issupportive of Spitfire's secondary corporate goal, which is to bring in otherassets to the company - including non-manganese projects. Subsequent to the end of the Quarter, on 15 April, the leading French mining andmetals company Eramet SA announced that it had reached agreement to acquireTinfos's business and operations for cash and shares, valuing the group at €593million. The acquisition marks a further consolidation of the global manganese industryas demand continues to increase. Eramet is the second largest manganese alloysproducer after Ukraine-based Nikopol. The acquisition of Tinfos is expected toincrease its manganese alloys production by more than 20%. Loyalty Options On 1 April, Spitfire announced that it will undertake a pro-rata,non-renounceable entitlements issue of options to shareholders as foreshadowedin its IPO Prospectus. The Company has lodged a Prospectus with the Australian Securities andInvestments Commission (ASIC) and the Australian Securities Exchange (ASX) forthe issue of up to 23,383,338 options on a one-for-three basis (one option forevery three ordinary shares held) at an issue price of 1 cent per option. Theseoptions will have an exercise price of 20c per option prior to the expiry dateof 30 June 2010. The Prospectus is available for viewing on Spitfire's website atwww.spitfireresources.com 2. South Woodie Woodie - Spitfire Resources (Manganese) New Ground Pegged During the Quarter, Spitfire moved to secure a substantial portfolio of newexploration tenure near its South Woodie Woodie manganese project, more thandoubling its existing land holdings in the East Pilbara region of WesternAustralia. The company has lodged applications for four strategic tenements, covering atotal area of 899 square kilometres, which are located approximately 13kmsouth-east of the South Woodie Woodie project. Some of the new ground package abuts tenements managed by Consolidated Minerals,which was recently acquired by Ukranian group Palmary Enterprises. Spitfireselected the ground after completing interpretive geological work illustratingthat the area to the south east contains strike extensions of a potentialcorridor of manganese host rocks. Until now the area applied for has been subjected to very little modernexploration, partly due to transported sands obscuring some of the geology.Spitfire has consequently begun to investigate the use of geophysics as a meansto identify the extent of these units and their potential to host manganesemineralisation. During the Quarter, Spitfire continued its preparations for the maiden drillingprogram at its 80%-owned South Woodie Woodie project. The Company completed camp construction, drill-rig access, pad preparation, fueldrops and recruited geological and field staff for the initial program, which isanticipated to comprise of up to 34 holes for approximately 7,000 metres ofReverse Circulation (RC) drilling at seven defined targets which were selectedon the basis of geophysical surveys and field work previously undertaken overthe South Woodie Woodie tenements. These techniques included IP, EM and gravitysurveys, which have become an accepted part of manganese exploration in thedistrict. Six of the initial targets were selected on the basis of geophysical anomalism,with the seventh target representing a manganese occurrence discovered earlierthis year. Spitfire's South Woodie Woodie tenements are located 35-70km south of the WoodieWoodie manganese mining centre. The Company's exploration strategy is based onthe utilisation of sophisticated geophysical techniques to search for "blind"manganese deposits, that is, deposits that are hidden below younger rocks andregolith not exposed at surface. Subsequent to the end of the Quarter, Spitfire announced on 28 April thatdrilling had commenced at South Woodie Woodie, marking the commencement of thekey first stage of its 2008 exploration field season. Results from this drillingprogram will be reported to the market as they become available. For further information please contact: Mr. James HamiltonManaging DirectorTel: +61 (0)8 9381 3733Fax: +61 (0)8 9382 4527 Email: [email protected] The information in this report relating to exploration results is based oninformation compiled by Mr. N. Cull. Mr. Cull is Exploration Manager forSpitfire Resources Ltd, and consents to the inclusion in this report of theinformation as presented. He has sufficient experience relevant to the style ofmineralisation and type of deposit under consideration and to the type ofactivity described to qualify as a competent person. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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