| Thu 13 Dec 2007, 15:31 | | PZG - Pamodzi Gold - Uranium Joint Venture With Mintails Limited |
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PZG
PZG
PZG - Pamodzi Gold - Uranium Joint Venture With Mintails Limited
Pamodzi Gold Limited
(Previously Bema Gold SA (Proprietary) Limited) (Incorporated in the Republic of
South Africa)
Registration number 2002/013039/06
JSE code: PZG & ISIN: ZAE000088563
("Pamodzi Gold" or "Company")
URANIUM JOINT VENTURE WITH MINTAILS LIMITED
Pamodzi Gold is pleased to announce that it has signed a binding Memorandum of
Agreement ("agreement") with Mintails Limited, a limited liability company duly
incorporated in Australia ("Mintails"), the shares of which are listed on the
Australian Securities Exchange. In terms of the agreement, Mintails has an
option to acquire all of the tailings materials held by Grootvlei Proprietary
Mines Limited, a wholly-owned subsidiary of Pamodzi Gold ("Grootvlei Tailings
Dumps") ("option").
The Grootvlei Tailings Dumps comprise three tailings dams with approximately 105
million tonnes of tailings containing unknown quantities of uranium and gold.
Consideration payable to Pamodzi Gold for the option
Mintails has acquired the option in exchange for Mintails ceding to Pamodzi Gold
its rights over five rock dumps containing approximately 7.4 million tonnes of
mining waste rock with an estimated in-situ one gram per tonne of gold.
Pamodzi Gold intends to process the rock dumps at a rate of approximately 50,000
tonnes per month through its Metallurgical Processing Plant in the East Rand
("plant") to recover gold. This will provide Pamodzi Gold with 148 months (at
the current rate of production) of feedstock for its plant`s mills.
Terms of the option
In the event that Mintails elects to exercise the option, Pamodzi Gold and
Mintails will enter into a formal purchase agreement ("purchase agreement").
The purchase agreement may be subject to approval by the shareholders of Pamodzi
Gold in general meeting. Pamodzi Gold, if required, will post a circular to
shareholders and convene a general meeting of shareholders as soon as
practicable after the purchase agreement has been signed.
In the event that Mintails elects to exercise the option, it will pay Pamodzi
Gold through the allotment and issue of ordinary shares in its subsidiary
Mintails SA (Proprietary) Limited ("Mintails SA").
The number of ordinary shares to be allotted and issued to Pamodzi Gold will be
determined based on the amount of proven mineral reserves of uranium in the
Grootvlei Tailings Dumps. In terms of the agreement, Mintails will pay ZAR17.00
(approximately USD2.53 at a ZAR/USD exchange rate of R6.72) for each pound of
uranium in the Grootvlei Tailings Dumps in excess of an initial 4 million
pounds.
The proven mineral reserves of uranium will be independently verified by a
Competent Person in terms of the South African Code for the reporting of
exploration results, mineral resources and mineral reserves (SAMREC Code). The
value of the transaction will be dependent on the amount of uranium established
through the Competent Person`s Report.
The Pamodzi Gold directors are of the view that the agreement will enable the
Company to realise value for the previously unvalued uranium content in the
Grootvlei Tailings Dumps while maintaining management`s focus on gold mining.
Bedfordview
13 December 2007
Merchant bank and sponsor
Rand Merchant Bank (A division of FirstRand Bank Limited)
Date: 13/12/2007 15:31:07 Produced by the JSE SENS Department.
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