| Mon 20 Aug 2007, 14:33 | | MMH - Miranda - Miranda Coal division enters into |
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MMH
MMH
MMH - Miranda - Miranda Coal division enters into joint venture agreement
Miranda Mineral Holdings Limited
(incorporated in the Republic of South Africa)
(Registration Number: 1998/001940/06)
Share code: MMH & ISIN: ZAE0000074019
("Miranda" or "the group")
Miranda Coal Division enters into Joint Venture agreement
The board of Miranda is pleased to inform shareholders that its , Sesikhona
Kliprand Colliery (Pty) Ltd ("Sesikhona"), has entered into a Joint Venture
("JV") agreement with Ihlosi Project Mining (Pty) Ltd ("Ihlosi") to conduct
further exploration and eventual mining on its Kliprand coal and anthracite
deposit ("Kliprand deposit").
1 Background to Sesikhona
Sesikhona is the holder of a coal Prospecting Permit, issued by the Department
of Minerals and Energy ("DME") over the Kliprand deposit, which consists of
four adjacent farms covering an area of some 884 hectares in the district of
Dannhauser, KwaZulu-Natal.
Analysis of samples and existing borehole data show an estimated deposit of
approximately 22 million tons of high grade anthracite, of which 10 million
tons can be readily recovered using simple open cast mining techniques.
Miranda initially acquired a 60% stake in Sesikhona through its acquisition of
black empowerment company Molebogeng Mining Investments (Pty) Ltd in July 2006
(see SENS announcement dated 21 July 2006). In May 2007, Miranda increased its
indirect stake in Sesikhona (per SENS dated 7 May 2007). In line with
Miranda`s strategy of creating broad-based empowerment at project level, the
local Kliprand community holds the remaining 12% interest in Sesikhona and has
the right to nominate a representative to the board of directors of Sesikhona.
2 The Miranda business model
The business model works on the basis that Miranda enters in to a JV agreement
with a potential mining partner to conduct exploration on a particular
resource (over which Miranda typically will hold a prospecting permit) with a
view to upgrading its mineral status to that of either a measured resource, or
a probable or proved reserve. On completion of the exploration program, the JV
partner will have the exclusive right to mine the project and Miranda will
earn a "JV fee" based on an ongoing turnover/ profit percentage or rand amount
per ton mined by the JV mining partner.
3 Terms of the JV
The salient terms of the Ihlosi agreement are:
Ihlosi will pay Sesikhona an initial fee of R6 million, of which R1
million is payable within 7 days from signature of the agreement and the
remainder is payable in installments of R500 000 per month for the next
ten months (supported by a bank guarantee of R6 million).
Ihlosi will conduct a program of confirmatory drilling of existing drill
holes and bulk sampling.
Upon completion of satisfactory prospecting activities and approval by
the DME, Sesikhona will immediately apply to the DME for the conversion
of the prospecting permit to a mining license.
Once a mining license has been obtained, Ihlosi will have the exclusive
right to mine the project.
Upon commencement of production, Ihlosi will pay Sesikhona a
participation fee of R50 per ton of coal mined over the life of the mine
(escalating annually at the same percentage as the published consumer
price index).
Ihlosi has warranted a minimum production tonnage of 30 000 tons per
month.
4 Official project launch
The official ground breaking ceremony, including over 500 members of the
Kliprand community and company officials, took place on Sunday, 19th August
2007.
Centurion
20 August 2007
Sponsor:
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 20/08/2007 14:33:01 Produced by the JSE SENS Department.
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