| Wed 21 Sep 2011, 11:08 | | PET - Petmin Limited - Petmin increases investment into Canadian PIG Iron |
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PET
PET
PET - Petmin Limited - Petmin increases investment into Canadian PIG Iron
Project
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")
PETMIN INCREASES INVESTMENT INTO CANADIAN PIG IRON PROJECT
Option to acquire up to 49.9% of low-cost pig iron project close to major
markets
Petmin has announced details of a US$25 million investment in its Canadian iron
sands and pig iron joint venture project.
A deal signed in September 2010 gave Petmin the option to invest US$25 million
for 40% of North Atlantic Iron Corporation (NAIC), which owns the project in
Canada`s Newfoundland and Labrador province.
NAIC is owned by Petmin and a privately-owned Canadian junior explorer. Petmin
has to date invested $3.5 million for 10.714% of NAIC. Petmin has joint
management control of NAIC and the project.
A further 9.9% of NAIC may be acquired at Petmin`s discretion, at a price to be
negotiated.
The project is supported by excellent infrastructure, being close to hydro-
electric power and a deep water port. The directors of Petmin believe that the
project potentially has a lifespan of more than 50 years and aims to produce
500,000 tonnes of pig iron per year during its first phase.
"This investment in Canada increases Petmin`s exposure to the steel value chain
and commodities which underpin urbanisation and infrastructure development,"
said Bradley Doig, the Petmin director responsible for international expansion.
"We aim to be a low-cost producer of quality pig iron and the North Atlantic
Iron Corporation meets all of our project investment criteria. It is a long-life
asset in a mining-friendly jurisdiction, with access to clean low-cost hydro-
electric power and a port which is less than seven days sailing time from most
of the US steel industry."
The NAIC project is in north-eastern Canada`s Newfoundland and Labrador
province, which was ranked 7th globally in the Fraser Institute`s 2010 survey of
mining friendly jurisdictions. The NAIC claims span approximately 450 square
kilometres.
Exploration to date has been positive, with results expected by Q1 2012. The
first round of drilling started in March 2011 and will continue through to
October 2011. During this exploration phase NAIC is targeting a minimum of 250
million tonnes of iron sands, on 14 square kilometres, with a heavy mineral
content of about 10%. This represents drilling on less than 3% of current
claims.
The NAIC project is less than 5km from a port which is well located to serve the
North American (4.5 days shipping to Erie, Pennsylvania) and European markets
(less than five days to Rotterdam).
It is close to the existing Upper Churchill hydro-electric power station
(6000MW) which gives the project potential access to clean low-cost power.
The iron sands will require no drilling, blasting or crushing. They will be
separated via gravity spirals and magnetic separators into a concentrate
suitable for the production of high-quality pig iron.
NAIC has an agreement with a technology partner to produce pig iron from iron
sands using a patented electricity-based technology. The technology has already
been demonstrated at a pilot scale to produce pig iron from NAIC`s iron sands
concentrate. Mineral dressing studies are underway for the design of a bulk
sample plant to produce enough concentrate for a continuous, demonstration-level
melt test.
Petmin`s investment in NAIC is in a series of phases as follows:
Phase 1: US$1.5 million for 5% - Completed
Phase 2a: US$2 million for 5.714% - Completed
Phase 2b: US$1.5 million for 4.3% - At Petmin`s option
Phase 3a: US$6 million for 7.5% - At Petmin`s Option
Phase 2b: US$6 million for7.5% - At Petmin`s Option
Phase 3c: US$8 million for 10% - At Petmin`s Option
CATEGORISATION, JSE LISTINGS REQUIREMENTS
This transaction falls under the definition of Section 9.1. (b) of the JSE
Listings Requirements and until such a time as the third option is exercised
does not comply with any of the categorisation definitions of the JSE listings
requirements and is being made in the interest of keeping shareholders updated
with the activities of the company.
Johannesburg
21 September 2011
Corporate Advisor and Sponsor
River Group
Enquiries:
Petmin
Bradley Doig (Business Development Director)
+27 824 597 818
Jonathon Rees (Media)
+27 76 185 1827
Nominated Advisor (AIM)
Numis Securities Limited
John Harrison
+44 207 260 1000
Broker (AIM)
Numis Securities Limited
James Black
+44 207 260 1000
Sponsor and Corporate Advisor (JSE)
River Group
Andrew Lianos
+27 834 408 365
Date: 21/09/2011 11:08:33 Produced by the JSE SENS Department.
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