| Tue 25 Jan 2011, 7:45 | | PET - Petmin - Investment in Hummingbird Resources Plc (Hummingbird) |
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PET
PET
PET - Petmin - Investment in Hummingbird Resources Plc ("Hummingbird")
PETMIN LIMITED
Incorporated in the Republic of South Africa
Registration Number 1972/001062/06
Share Code JSE: PET & ISIN: ZAE000076014
Share Code AIM: PTMN
("Petmin" or "the Company")
INVESTMENT IN HUMMINGBIRD RESOURCES PLC ("Hummingbird")
Petmin is pleased to announce that on 24 January 2011 the Company entered into
an agreement with Hummingbird and its wholly owned subsidiary Iron Bird
Resources Inc ("Iron Bird"), relating to Hummingbird`s Mount Ginka licence for
exploration of iron ore in Liberia.
Hummingbird Resources Plc.(AIM:HUM) is the largest holder of mineral exploration
licences in the eastern part of Liberia, a hitherto unexplored region of
Birimian age geology - a province that is known to be highly prospective for the
discovery of large scale gold and other mineral deposits. Hummingbird has sought
to capitalise on this prospect through systematic and extensive exploration over
the last four years.
Under this agreement Petmin will provide up to a total sum of US$2m for the
exploration of the Mount Ginka licence area in a two stage plan to ascertain the
commercial viability of the project.
The key terms of the agreement are:
- Iron Bird will issue new shares equivalent to 15% of its issued share capital
to Petmin for a consideration of US$500,000 ("First Phase Investment"). This
investment is conditional on the transfer of the Mount Ginka licence to Iron
Bird.
- The First Phase Investment will be used for the purpose of demonstrating
whether a commercially saleable magnetite concentrate can be produced ("Phase 1
of the Work Programme").
- On successful completion of Phase 1 of the Work Programme, Petmin will invest
a further US$1,500,000 in Iron Bird, to increase its shareholding to 50%
("Second Phase Investment").
- The Second Phase Investment will be utilised to demonstrate the scale of the
resource within the licence area.
Phase 1 of the Work Programme will commence with an aeromagnetic survey which
has been contracted to be flown shortly. Following this, Phase 1 of the Work
Programme is expected to progress with grab sampling, trenching, pitting and
scout drilling with the aim of obtaining a representative sample for
metallurgical test work.
Mount Ginka - Geology and Location
The itabirite ridge in the Company`s Mount Ginka licence area is east west
trending with a 30 kilometer long strike length and reaches elevations of up to
500 MASL, with an average elevation of approximately 400 MASL. The ridge is
dissected halfway through by a structural break. The itabirite ridge has a near
vertical dip and measures up to 400 meters in thickness.
The Mount Ginka licence area covers approximately 155 square kilometers and is
situated in Nimba County in north central Liberia. It is located approximately
15 kilometers south of Yekepa, a major iron ore deposit located at Mt Nimba,
which is currently being developed by Accelor-Mittal. In addition BHP Billiton
is undertaking iron ore exploration approximately 30 kilometers northwest of
Mount Ginka at the Mount Kitoma licence area.
The Mount Ginka licence area is approximately 200 kilometers from Monrovia and
can be easily reached via road access. The licence area is located in Nimba
County, which has an extensive history of iron ore production. The project area
is favorably situated 15 kilometers from a railway line, which connects Mount
Nimba to the deep water port at Buchanan on the coast. The railroad is currently
undergoing reconstruction to service BHP Billiton`s and Arcelor-Mittal`s
projects located nearby and once completed the Group will be entitled to use
this railroad in accordance with the terms of Arcelor-Mittal`s license.
Furthermore, the surrounding area to Mount Ginka has numerous small roads and
tracks making local access relatively simple.
Dan Betts, CEO of Hummingbird, commented:
"We are delighted to have finalised the terms of this agreement and look forward
to working with a team we know well to progress the Mount Ginka project. This
deal allows us to understand the commercial viability of the project at no cash
cost to our shareholders, and we look forward to the results of the contracted
aeromagnetic survey."
Jan du Preez, CEO of Petmin, commented:
"The Mount Ginka JV with HUM represents an early stage, cost effective entry
into a potentially prospective venture. It is further progress on our stated
intention of diversifying both our product mix and expanding our global
footprint."
Conditions Precedent
Where applicable this transaction is subject to the approval of the SARB, JSE
Limited, the Securities Regulation Panel and the Competition Commission;
Categorisation, JSE Listings Requirements
This transaction does not fall within any of the categorisation definitions of
the JSE listings requirements and this announcement has been made in the
interest of keeping shareholders updated with the activities of the company.
Johannesburg
25 January 2011
Corporate Advisor and Sponsor
River Group
Enquiries:
Petmin
Bradley Doig (COO)
+27 824 597 818
Nominated Advisor (AIM)
Numis Securities Limited
John Harrison
+44 207 260 1000
Sponsor and Corporate Advisor (JSE)
River Group
Andrew Lianos
+27 834 408 365
Date: 25/01/2011 07:45:01 Produced by the JSE SENS Department.
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