| Tue 4 Sep 2007, 7:07 | | ARQ - Anooraq - News Release: Anooraq Enters Into |
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ARQ
ARQ
ARQ - Anooraq - News Release: Anooraq Enters Into Major Empowerment Transaction
With Anglo Platinum
Anooraq Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
(JSE share code: ARQ & ISIN: CA03633E1088)
(TSXV share code: ARQ & ISIN: CA03633E1088)
(AMEX share code: ANO & ISIN: CA03633E1088)
("Anooraq" or "the company")
News release: Anooraq enters into major empowerment transaction with Anglo
Platinum to transform the company into an independent and significant PGM
producer
September 4, 2007, Vancouver, BC. Anooraq and Anglo Platinum Limited ("Anglo
Platinum") announced today they had entered into a detailed transaction
framework agreement (the "TFA") which, if implemented, will transform Anooraq
into an independent and significant platinum group metal ("PGM") producer.
Anooraq has been actively engaged in the exploration and development of PGM
properties in the Bushveld Complex in South Africa since 2000. The Company`s
primary assets are the Ga-Phasha PGM Project ("Ga-Phasha"), the Boikgantsho PGM
Project ("Boikgantsho") and the Kwanda PGM Project ("Kwanda"), which are 50/50
joint ventures with Anglo Platinum. Pelawan Investments ("Pelawan"), a 100%
broad-based HDSA (Historically Disadvantaged South African) company, owns 65% of
Anooraq, together with 167 million BEE warrants exercisable up until 31 December
2008.
Pursuant to the TFA, Anglo Platinum will sell to Anooraq an effective 51% of
Lebowa Platinum Mines Limited ("Lebowa") and an effective 1% controlling
interest in the Ga-Phasha PGM Project ("Ga-Phasha") for a total cash
consideration of South African Rand 3.6 billion (approximately C$530 million).
The parties have also reached agreement, in principle, for the sale of an
additional effective 1% controlling interest in both the Boikgantsho PGM Project
("Boikgantsho") and the Kwanda PGM Projects ("Kwanda") to Anooraq. This means
that Anooraq will own and control Lebowa Platinum Mines as well as the Ga-
Phasha, Boikgantsho and Kwanda exploration and development PGM projects through
its 51% control interest, with 49% held by Anglo Platinum. These interests will
be held through a new holding company ("Lebowa Holdco").
Lebowa, currently 100% owned by Anglo Platinum, is located on the north-eastern
limb of the Bushveld Complex.
Lebowa platinum mine consists of a vertical shaft and declines with underground
operations mining the Merensky and UG2 Reefs. In 2006, annual refined production
was 202,500 ounces of platinum, palladium, rhodium and gold ("4E"), including
109,200 oz of platinum from its 140,000 tonnes per month ("tpm") operation.
The scale of the mining operations at Lebowa is currently being increased to
reflect the true quality of the mineral deposits. Expansion projects at Lebowa,
approved by Anglo Platinum, are being implemented. The Middelpunt Hill UG2 and
Brakfontein Merensky expansions will increase production to about 245,000 tpm,
producing about 430,000 4E oz, including 200,000 oz of platinum, by 2012.
Upon completion of the transaction, Anooraq`s attributable share of the Lebowa
production will be 51% of Lebowa production, that is, approximately 103,300 4E
ounces (based on 2006 production). Upon completion of the Lebowa expansions
announced to date, it is estimated that Anooraq`s attributable share will
increase to approximately 219,300 4E ounces annually.
Operational control of the assets within Lebowa Holdco will pass to Anooraq on
implementation of the transaction agreements.
Additional expansion projects at Lebowa on both the Merensky and UG2 Reef
horizons are at an advanced stage of evaluation. Anooraq and Anglo Platinum
believe there is scope for expansion of current operations to 350,000 tpm.
Lebowa has significant mineral reserves and resources which, according to Anglo
Platinum`s Annual Report, at 31 December 2006, were:
proved and probable mineral reserves of 23.0 million tonnes grading 4.29 g/t 4E
in the Merensky Reef and 42.5 million tonnes grading 5.30 g/t 4E in the UG2
Reef, plus
measured and indicated resources of 48.7 million tonnes grading 5.61 g/t 4E in
the Merensky Reef and 171.0 million tonnes grading 6.76 g/t 4E in the UG2 Reef,
and
additional extensive inferred resources in both the Merensky and UG2 Reef
horizons.
For details of Lebowa`s mineral reserves and resources, see Table 1 at the end
of this release.
Ga-Phasha is at a pre-feasibility stage of project development with potential
for underground mining. Ga-Phasha is contiguous to the Lebowa property and also
situated on the north-eastern limb of the Bushveld Complex. Ga-Phasha has
significant PGM mineral resources estimated in the Merensky and UG2 Reefs that
are open down dip to further expansion. For mineral resources estimated by Anglo
Platinum in the Merensky Reef and UG2 deposits in 2006, see Table 2.
Boikgantsho, located on the Bushveld Complex`s northern limb, is also at a pre-
feasibility stage. There are substantial mineral resources in the Drenthe and
Overysel North deposits that are potentially amenable to open pit mining. For
Boikgantsho mineral resources as estimated by Anooraq to 2004, see Table 3.
Kwanda, also located on the northern limb, is at the early exploration stage.
Tumelo Motsisi, Acting President and CEO of Anooraq, said:
"This transaction accomplishes two of our original objectives:
It immediately transforms Anooraq into a significant PGM producer.
It fulfills Anooraq`s and Pelawan`s stated objective of creating an HDSA
controlled, independent and significant PGM producer. Anooraq`s reserves and
resources will increase significantly such that we will now control the third
largest PGM resource base in South Africa."
"Lebowa is an excellent asset to add to our stable. It has attractive grades,
established water, power and road infrastructure and an approved expansion in
place to double existing production by 2012 as well as a number of other
exciting growth opportunities."
As the Ga-Phasha Project is contiguous to Lebowa, Anooraq is confident it will
be able to exploit significant synergies between the two operations.
Additionally, as Lebowa Holdco will be a stand-alone company, it will be able to
advance operations and the projects at Lebowa and Ga-Phasha in accordance with
its own mines and project scheduling.
Tumelo Motsisi added:
"Upon implementation of the transaction, control of the operations at our
platinum projects and Lebowa will pass to Anooraq. This will allow us to
evaluate our project pipeline and develop the assets in accordance with
Anooraq`s timetable. We will also be in a position to strengthen our technical
capacity through our enhanced relationship with Anglo Platinum."
Anglo Platinum and Anooraq have agreed to transform Anooraq into a fully
integrated mine to market company in the medium term.
Pelawan`s controlling interest in Anooraq was the result of a reverse take over
transaction in 2004 whereby Anooraq and Pelawan combined their respective PGM
assets. Pelawan`s shareholders comprise fifteen broad-based black economic
empowerment ("BEE") entities, including women investment groups, which account
for about 42% of Pelawan, cultural trusts and rural groups within the proximity
of Anooraq`s operations.
Meta Maponya, Director of Pelawan, said:
"Anooraq is truly committed to women ownership in the mining sector. The women
provide meaningful contributions to Pelawan at board level in areas such as
skills development and procurement. Women`s participation will extend to
executive and management roles within Lebowa Holdco."
Communities associated with the operations will participate in the transaction.
Over 35,000 people are expected to benefit through a community trust. In
addition, an employee share ownership plan ("ESOP"), broadly aligned to Anglo
Platinum`s ESOP principles will be provided for all Lebowa Holdco employees,
benefiting about 3,000 employees.
Tumelo Motsisi concluded:
"This is a very exciting day for all of us at Anooraq and Pelawan. Through this
transaction, we are achieving our ambition of becoming a significant PGM player
and being in control of our own destiny. The broad-based empowerment of Pelawan,
the communities and employees is a significant achievement for everyone
involved."
Anooraq and Pelawan plan to fund the purchase consideration through a
combination of debt and equity.
The transaction is subject to a number of conditions and is expected to close
during the first half of 2008. Certain of these conditions include:
Completion of confirmatory due diligence;
Completion of definitive transaction agreements;
Regulatory approvals;
Stock Exchange approvals;
Financing; and
Shareholder approvals as required.
In conjunction with these transactions and consistent with meeting Anooraq`s
stated BEE objectives, the Company is making the following management changes,
effective immediately. Mr Ron Thiessen has relinquished the role of President
and CEO and will remain a non-executive director. Mr Tumelo Motsisi, former
deputy CEO and Managing Director, has been appointed as Acting President and CEO
of Anooraq. The Company wishes to thank Mr. Thiessen for the vital role he
played during Anooraq`s transitional period from 2004 to bringing the Company to
where it is today.
David Copeland, P.Eng., a qualified person who is a consultant to but not
independent of the Company, has reviewed this news release.
On behalf of the Board of Directors
Tumelo Motsisi
Acting President and CEO
For further information please contact:
Anooraq (South Africa) +27 11 883 0831
Tumelo Motsisi, Acting President & CEO
Meta Maponya, Director of Pelawan
Joel Kesler, Head of Business Development
Anooraq (North America)
Investor Relations 604 684 6365
Toll free 800 667 2114
Investor Relations advisors (South Africa)
College Hill +27 11 447 3030
Nicholas Williams +27 83 607 0761
Nandile Ngubentombi +27 82 825 8004
Investor Relations advisors (North America)
Breakstone Ruth
Barbara Cano 646 452 2334
Anooraq Resources Corporation is engaged in the exploration and development of
PGM properties in the Bushveld Complex and has a long-term objective of becoming
a significant PGM producer in South Africa through organic and acquisitive
growth. Its assets include a 50% interest in the Ga-Phasha, the Boikgantsho and
the Kwanda JV Projects.
Anooraq is incorporated in the Province of British Columbia, Canada and is 65%
owned and controlled by Pelawan Investments, which also holds 167 million
Anooraq warrants. Anooraq has a primary listing on the TSX Venture Exchange
(ARQ) and secondary listings on the American Stock Exchange (ANO) and the JSE
Limited (ARQ).
Pelawan`s shareholder base comprises 15 broad-based BEE entities, including
women investment groups, which account for approximately 42% of Pelawan,
cultural trusts and Limpopo-based rural groups within the proximity of Anooraq`s
operations. Anooraq is one of the leading mining companies committed to women
ownership in the mining sector. Women`s interests include Mookodi Trading,
Africa Without Boundaries Mining and Leswika Womens Investments. Each of these
women`s groups is committed to the advancement of women`s interests and provides
a meaningful contribution to Pelawan at board level.
Mineral Reserves and Resources
The mineral resources for Lebowa and Ga-Phasha were estimated using
geostatistical methods, and were categorized according to the South African Code
for Reporting Mineral Resources and Mineral Reserves (the "SAMREC Code") March
2000 guidelines by Anglo Platinum`s in-house qualified persons.
For Lebowa, all samples were analyzed by fire assay at the Anglo Research
Laboratory with check assays completed at Genalysis in Australia. In keeping
with Anglo Platinum practice, regressed values for Rh have been assessed for Rh
values below the detection limit. The estimates are not based on resource cut-
off grades as these do not apply at current metal prices. Cash operating costs
for 2006 were US$597/oz PGM refined. The qualified person is Paul Stevenson,
Pr.Sci.Nat., see below In his opinion, the definitions and standards of the
SAMREC Code are substantively similar to the definitions and standards of the
Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM Standards")
which are recognized by the Canadian regulatory authorities and NI 43-101; and a
reconciliation of the resources between the SAMREC Code and the CIM Standards
does not provide a materially different result.
For Ga-Phasha, all samples were analyzed by fire assay at the Anglo Research
Laboratory with check assays completed at Genalysis in Australia. The resource
cut width for the UG2 estimates is 0.90 m. The qualified person for the
estimates is Gordon Chunnett, Pr.Sci.Nat. The resource cut width for the
Merensky reef is 0.9 m. The Merensky reef estimate has not been previously
disclosed by Anooraq. It is based on 257 exploration borehole intersections
drilled at an approximately 200 m spacing for measured resources (although
borehole spacing is only one of the indicators for classification), a 350 m
spacing for indicated resources and >500 m for inferred resources. In the
opinion of the qualified person, the definitions and standards of the SAMREC
Code are substantively similar to the definitions and standards of the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM Standards") which are
recognized by the Canadian regulatory authorities and NI 43-101; and a
reconciliation of the resources between the SAMREC Code and the CIM Standards
does not provide a materially different result.
Technical reports in compliance with NI 43-101 documenting the Lebowa mineral
reserves and resources and the Ga-Phasha mineral resources will be completed by
Anooraq and filed on www.sedar.com within 45 days.
The Boikgantsho mineral resources, estimated according to CIM 2000, and
announced in Anooraq News Release dated November 22, 2004. Samples were analysed
by Acme Analytical Laboratories in Vancouver, BC. A technical report was filed
on www.sedar.com in November 2004.
MINERAL RESERVES AND RESOURCES
Contained troy oz (millions)
(5)
Table 1 Merensky Reef UG2 Reef Before After
Lebowa (1) transaction transaction
Category Mtonnes g/t 4E Mtonnes g/t 4E 100% 50% 51%
Proved 17.5 4.29 30.6 5.33 7.6
Probable 5.5 4.31 11.9 5.23 2.8
Proved + 23.0 4.29 42.5 5.3 10.4 5.3
Probable
Measured 20.8 5.74 83.3 6.77 21.9
Indicated 27.9 5.51 87.7 6.76 24.0
Measured + 48.7 5.61 171.0 6.76 46.0 23.5
Indicated
Inferred 113.9 5.34 155.2 6.73 53.2 27.1
Table 2 Merensky Reef (2) UG2 Reef (3)
Ga-Phasha
Category Mtonnes g/t 4E Mtonnes g/t 4E
Measured 13.4 4.61 24.8 6.50 7.1
Indicated 27.6 5.33 57.4 6.55 16.8
Measured + 41 5.09 82.2 6.53 23.9 12.0 12.2
Indicated
Inferred 122.4 5.41 185.8 6.47 59.9 29.9 30.5
Table 3 Platreef
Boikgantsho(4)
Category Mtonnes g/t 3E % Cu % Ni
Indicated 176.4 1.35 0.08 0.13 7.6 3.8 3.9
Inferred 104 1.23 0.09 0.14 4.1 2.1 2.1
(1) Lebowa: Mineral reserves and resources as at December 31 2006. Lebowa
mineral reserves are in addition to the mineral resources.
(2) Ga-Phasha: Merensky Reef mineral resources as at December 31 2006.
(3) Ga-Phasha: UG2 Reef mineral resources as at December 31 2006.
Ga-Phasha inferred mineral resources for Merensky and UG2 are for the
Paschaskraal, Klipfontein, Avoca and DeKamp farms. UG2 mineral resources
announced in Anooraq news release May 15, 2007 resources for UG2 did not
include inferred resources for Avoca and DeKamp.
(4) Boikgantsho: As announced by Anooraq news release November 22, 2004, based
on estimates under CIM 2000 Grades of indicated resources are Pt - 0.57
g/t; Pd - 0.69 g/t; Au - 0.09 g/t; Ni - 0.13% and Cu - 0.08%. Grades of
inferred resources are Pt - 0.52 g/t; Pd - 0.63 g/t; Au - 0.09 g/t Ni -
0.14% and Cu - 0.09%.
The mineral resources are based on a US$20 gross metal value per tonne cut-
off. Gross Metal Value per tonne (GMV/t) is sum of Pt, Pd, Au, Cu and Ni
grades multiplied by the following metal prices: Pt - US$650/oz; Pd -
US$250/oz; Au - US$375/oz; Ni - US$4/lb; Cu - US$1/lb. Metallurgical
recoveries assumed to be 100%.
(5) Shows Anooraq`s interest in contained ounces before and after this
transaction.
4E is platinum palladium rhodium and gold. 3E is platinum palladium and
gold.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release.
The American Stock Exchange have neither approved nor disapproved the contents
of this press release.
Cautionary and Forward Looking Information
This release includes certain statements that may be deemed "forward-looking
statements". All statements in this release, other than statements of historical
facts, that address future production, reserve potential, exploration drilling,
exploitation activities and events or developments that Anooraq expects are
forward-looking statements. Although Anooraq believes the expectations expressed
in such forward-looking statements are based on reasonable assumptions, such
statements are not guarantees of future performance and actual results or
developments may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those in
forward-looking statements include market prices, exploitation and exploration
successes, changes in and the effect of government policies with respect to
mining and natural resource exploration and exploitation and continued
availability of capital and financing, and general economic, market or business
conditions. Investors are cautioned that any such statements are not guarantees
of future performance and those actual results or developments may differ
materially from those projected in the forward-looking statements. For more
information on Anooraq, Investors should review the Company`s annual Form 20-F
filing with the United States Securities and Exchange Commission and its home
jurisdiction filings that are available at www.sedar.com.
Information Concerning Estimates of Measured, Indicated and Inferred Resources
This news release also uses the terms "measured resources", "indicated
resources" and "inferred resources". Anglo Platinum and Anooraq advise
investors that although these terms are recognized and required by Canadian
regulations (under National Instrument 43-101 Standards of Disclosure for
Mineral Projects), the U.S. Securities and Exchange Commission does not
recognize them. Investors are cautioned not to assume that any part or all of
the mineral deposits in these categories will ever be converted into reserves.
In addition, "inferred resources" have a great amount of uncertainty as to their
existence, and economic and legal feasibility. It cannot be assumed that all or
any part of an Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral Resources may not
form the basis of feasibility or pre-feasibility studies, or economic studies
except for a Preliminary Assessment as defined under National Instrument 43-101.
Investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.
Date: 04/09/2007 07:07:01 Produced by the JSE SENS Department.
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