| Thu 7 Jun 2007, 12:03 | | GVM - GVM Metals Limited - Results of shareholders |
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GVM
GVGVM
GVM - GVM Metals Limited - Results of shareholders meeting and market
update
GVM Metals Limited
(previously, "Golden Valley Mines Limited")
(Incorporated and registered in Australia)
(Registration number ACN 008 905 388)
Share code on the JSE Limited: GVM ISIN: AU000000GVM1
Share code on the Australian Stock Exchange Limited: GVM ISIN:
AU000000GVM1
("GVM" or `the Company")
ANNOUNCEMENT (Released on ASX on 6 June 2007)
RESULTS OF SHAREHOLDERS MEETING AND MARKET UPDATE
The Directors of GVM (AIM/ASX/JSE) are pleased to advise that all
resolutions considered at the General Meeting held 5 June 2007 were
passed on by shareholders.
The outcome of the meeting resulted inter alia in the Company
satisfying all the conditions precedent necessary to complete the
acquisition of a 100% interest in the Baobab JV. and the Holfontein
Project. This is a critical step forward in the Company`s progress to
becoming a significant coal producer.
The Company has placed 34,868,283 new ordinary shares in GVM ("Shares")
to acquire the remaining a 51% interest in Holfontein, the remaining
50% interest in the Baobab Joint venture and 100% interest in
additional Limpopo prospecting rights, with the respective vendors.
Application will be made for the 34,868,283 Shares to be admitted to
trading on AIM. Following the admission of the Shares the number of
Ordinary Shares on issue will be 196,518,703.
In addition, a resolution was passed to issue 2,000,000 options
exercisable at $1.25 each on or before 30 September 2012 to Richard
Linnell and 5,000,000 options exercisable at $1.25 each on or before 30
September 2012 to Simon Farrell.
The current status of the Company`s coal projects is set out below:
MOOIPLAATS
* An infill drilling program is underway to convert a portion of the
current inferred resources to a minimum of 60 million tonnes in
the measured and indicated category
* The inferred resource drilling program at Mooiplaats to date has
covered approximately 7,000 Ha of the 20,000 Ha of the total
property. Completion of this program has been suspended to conduct
the above infill drilling as detailed above
* Indicative quotes from potential contractors have been received on
the basis of supplying an initial six million tonnes per annum of
domestic thermal coal to Camden power station
* The planned second phase of development is to produce
approximately two million tonnes of anthracitic and export thermal
coal per annum
* Production expected to commence Q3 2008
LIMPOPO COAL PROJECT (Tuli Coalfield)
* Work set to commence Q3 2007 to upgrade and expand the inferred
resource of 352 million tonnes to indicated and/or measured
* Bankable feasibility study to commence before the end of Q4 2007
BAOBAB COAL PROJECT (Soutpansberg Coal Field)
* Work set to revalidate the previous drilling by Iscor/Kumba and
bring the resources into JORC standard
HOLFONTEIN
* The measured resource statement and geological model is expected
to be completed by the end of June 2007
* Production expected to commence Q3 2008
NiMag
* EBIT for the year to 30 June 2007 is expected to be in the range
of Zar 42/45 million ($A7-8 million)
Simon Farrell, Managing Director, GVM Metals commented, "I am pleased
to provide this positive update from the meeting. It is clear from the
progress made at our projects that GVM is rapidly progressing towards
our goal of becoming a major coal producer in South Africa."
For further information:
http://gvm.com.au
Australia
Simon Farrell
GVM Managing Director
+61 417 985 383
United Kingdom
Olly Cairns
Blue Oar Securities Plc
+44(0) 20 7448 4400
Peter Krens
Mirabaud Securities Ltd
+44(0) 20 7878 3362
Leesa Peters / Jos Simson
Conduit PR
+44(0) 20 7429 6603
+44(0) 7899 870 450
South Africa
Petronella Gorrie
Media & Investor Relations
+27(0) 82 827 8815
E-mail: gorrie@telkomsa.net
MARKET UPDATE
MOOIPLAATS
Subject to satisfaction of various conditions as announced on 7
February 2007, GVM has contracted to buy 70% of the shares in Coal of
Africa Ltd ("CoAL") which has the new order rights to various adjoining
properties in the Ermelo district of South Africa adjacent to the
Camden Power Station. Under the original transaction, GVM was to
acquire CoAL via the acquisition of Kelso Mining. In addition to the
CoAL rights, Kelso Mining had a ferronickel project in the Philippines,
which subject to certain conditions was also to be acquired as part of
the transaction. It became apparent that the complexity of the
transaction was jeopardizing settlement of the CoAL transaction. There
was therefore agreement amongst the parties that GVM deal directly with
the original parties and Kelso would be removed from the transaction on
the basis it was reimbursed its costs in relation to the original due
diligence and legal costs up to a maximum of GBP500,000 to be satisfied
by the issue of GVM shares at 40p.
The result of the transaction is that the cost of acquiring the CoAL
shares is increased from the original price of GBP 30 million in cash
and GBP 7 million in shares at 30p per share by the reimbursement
described above. A cash deposit of GBP 3 million has already been paid.
GBP 17 million of the cash component will be paid 90 days after receipt
of all necessary Government consents with the remaining GBP 10 million
to be paid 12 months after that date. The share component will be made
in two payments, GBP 3 million immediately and the remaining balance on
completion of all conditions precedent.
Following recent placements the Company has cash reserves in excess of
GBP 25 million (AUD 60 million) and no debt other than working capital
facilities for the NiMag business.
Since the end of February 2007, an intensive drilling program involving
up to 11 drill rigs has been working on the various Mooiplaats farms.
A summary of this work is set out below:
Inferred Measured
Total boreholes to date 89 40
Total Metres drilled 18,145
Samples submitted 185 83
Hardgrove Index
& Grindability samples 10
The drilling program at Mooiplaats was initiated with the task of
defining an inferred resource for the entire property. The program is
being supervised by SRK Consulting and approximately 7,000 Ha of the
20,000 Ha property has been drilled following the guidelines
established by the JORC and SAMMREC codes.
In order to bring that portion of the ore body closest to the Camden
Power Station into measured category, the drilling program was
suspended and the rigs began the infill drilling required to upgrade
the status of the resource.
The aim of the program is to bring a minimum of 60 million tonnes into
the measured and indicated category. Sixty million tonnes is the coal
required for ten years consumption at the adjacent Camden Power
Station. Once this infill program is completed, mine planning can
commence and the current negotiations with contract mining companies
finalised. The inferred drilling will then re-commence with
approximately 250 further holes required to complete the programme.
Indicative quotes have been received on the basis of supplying
initially six million tonnes of domestic thermal coal annually. The
planned second phase of development is to produce approximately two
million tones of anthracitic and export thermal coal. To put the
potential size of the mine into perspective, Australia currently
produces a total of 70 million tonnes underground coal.
Owing to the transfer of rigs to accelerate the definition of a
measured resource and the results of the inferred drilling program to
date, the requirement of a 450 million tonne minimum JORC compliant
resource under the CoAL agreement has been waived, leaving the only
conditions precedent remaining being ministerial consent to the
transfer and Competition Authority consent. This is expected to take
place in the next three months.
LIMPOPO COAL PROJECT (Tuli Coalfield)
In July 2007, the Company intends to release four of the eleven rigs
drilling at Mooiplaats and relocate them to the Limpopo project. Work
undertaken by Sphere/Utah Mining in the 1980`s, delineated an inferred
resource of 352 million tonnes. (www.gvm.com.au)
Following the acquisition of adjoining properties, the intention is to
expand and upgrade the current resource status to indicated and/or
measured. This program, incorporated with yet to be flown aero
magnetic data, will form the basis of a bankable feasibility study
which is intended to commence before the end of the year.
BAOBAB COAL PROJECT (Soutpansberg Coal Field)
Following completion of the Data Terrain Model, two rigs released from
the Holfontein infill drilling program are being transferred to the
Baobab project. These rigs will commence large diameter drilling on the
Fripp and Tanga farms. These farms were subject to a comprehensive
drilling and testing program by Iscor in the 1970`s and 80`s. The
intention of the program is to revalidate the earlier work and bring
the resources into JORC standard.
HOLFONTEIN
Poor performance by the drilling contractor has delayed finalising the
in-fill drilling at Holfontein until this week. Initial results have
confirmed that the 5 Seam should produce the required quality of coal
for the metallurgical industry. The 4 Seam will also produce suitable
quality coal for domestic thermal consumption.
The Measured Resource and Geological Model is expected to be completed
by the end of June 2007 in time to feed into the Scoping Study and
application for New Order Mining Rights ("NOMR"). Consultants have been
appointed to complete the NOMR and the Environment Studies including
the Environmental Impact Assessment and Environmental Management Plan.
In parallel with the NOMR applications, GVM will complete a Definitive
Feasibility Study including baseline capital and operating cost
estimates with an expected +/-10% accuracy.
Concurrently experienced contractors will be identified and selected
for alliance contracts for the outsourced Underground Mining and Coal
Processing. The open book, negotiated alliance type of contract has
been selected in order to optimise production, capital and operating
costs focusing on safety, health and environment performance.
NiMag
EBIT for the year to 30 June 2007 is expected to be in the range of Zar
42/45 million ($A7-8 million)
Buoyant trading conditions continue to improve this division`s
performance. Expected EBIT for the year to 30/6/07 is expected to be
in the range of Zar 42/45 million ($A7-8 million) and the outlook for
2008 is for a modest further improvement. NiMag management continues
to seek further similar businesses to expand its metal alloys and
fibres division.
NiMag, which was acquired for Zar 55 million some four years ago, has
now repaid all its acquisition debt and provides a most valuable
contribution to the costs of developing the coal business.
7 June 2007
South African Sponsor to GVM
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Date: 07/06/2007 12:03:17 Produced by the JSE SENS Department.
