14th Mar 2006 07:02
Lonrho Africa PLC14 March 2006 14 March 2006 Lonrho Africa Plc ("Lonrho Africa" or "the Company") (AIM: LAF) Investment in Uranium Project Lonrho Africa is pleased to announce that it has agreed to invest £5 million inBrinkley Mining Plc ("Brinkley"), which has significant Uranium and Molybdenumprospects in the Karoo region of South Africa. This is the Company's first investment under its new investing strategy whichwas approved by Lonrho Africa's shareholders at an EGM held on 24 February 2006. Lonrho Africa has subscribed for 25 million ordinary shares at a price of 20pence per share. This represents a 10% holding of Brinkley's issued sharecapital. Brinkley is seeking an admission on AIM during the first half of thisyear. The pre-IPO funding will assist in confirming the resource potential ofthe Karoo assets and lead to a feasibility study for the purposes ofcommissioning a viable Uranium operation. The Karoo region lies some 450 km North-East of Cape Town and Brinkley hasrights to land representing 42,000 hectares (162 square miles). SRK Consultinghas undertaken a Competent Person's Report for Brinkley which states that: "Based on the expectation that between 5 per cent. and 10 per cent. of thesandstone may be mineralised and typical mineralisation grades for theindividual prospects, the magnitude of the total in-situ mineralisation thatBrinkley is targeting in its exploration is likely to fall within a range of 41and 83 million pounds U3O8 plus 23 to 47 million pounds of molybdenum exclusiveof one prospect." David Lenigas, Lonrho Africa's CEO, commented: "This investment by Lonrho Africa is illustrative of the exciting opportunitiesavailable in the African continent and enables the Company to apply its projectand financing expertise. "At today's Uranium and Molybdenum prices, SRK's report represents a currentin-ground value of between US$2.1bn - US$4.2bn (at US$39.50/lb U3O8 and US$21/lbMo). According to the SRK report this indicates only some 5-10 per cent. of themineralised environment and thus offers significant upside potential." In the 1970's, Union Carbide Corporation ("Union Carbide") and Essex MineralsCompany ("Essex") undertook extensive exploration work in the Karoo region whichincluded the four prospects owned by Brinkley. The exploration work consisted ofairborne surveys and drilling programmes. At Brinkley's Rietkuil Project, exploration activities by Union Carbideculminated in the excavation of a trial mining pit and assays showedwell-mineralised zones with typical intersections showing up to 4,851 ppmUranium, 185 ppm Molybdenum and values up to 8,810 ppm Uranium, 573 ppmMolybdenum. Historical estimates of the mineralisation were calculated at 1.1million tonnes of in-situ Uranium ore grading a prospective 1,788ppm and in-situMolybdenum grades of 118 ppm. At Brinkley's Waterval Prospect, Essex undertook a drilling programme thatintersected Uranium mineralisation zones at depths between 8-13 metres.According to Hambleton-Jones (1994) values up to 5,240 ppm U3O8 were obtainedand this led to an exploration drilling programme on a 100 x 100 metre drillinggrid. At Brinkley's other project, Damsfontein-Bloemfontein, Union Carbide proved up338,500 tonnes grading in-situ 1,334 ppm Uranium and 1,027 ppm Molybdenum and atthe fourth project, Flagfontein, it is reported that there are significantmineralised zones. All of the above projects remain open for further resource delineation. -Ends- Enquiries and further information, please contact: Lonrho Africa PlcDavid Lenigas Mobile: +44 (0)7881 825 378Emma Priestley Mobile: +44 (0)7867 785 177 Strand Partners LimitedSimon Raggett Tel: +44 (0)20 7409 3494 Mobile: +44 (0)7769 883 666Cardew GroupNadja Vetter Tel: +44 (0)20 7930 0777 Mobile: +44 (0)7941 340 436 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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