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Lonmin Plc - Joint Venture
Lonmin Plc
(Incorporated in England)
(Registered in the Republic of South Africa under registration number
1969/000015/10)
Share code: LON
ISIN code: GB0031192486
Issuer code: LOLMI
(`Lonmin`)
Press Release
LONMIN AND INCO AGREE CANADIAN PLATINUM GROUP METALS (PGM) EXPLORATION JOINT
VENTURE
Lonmin Plc (`Lonmin`) announces that it has entered into a joint venture
agreement (The Sudbury PGM Joint Venture) with Inco Limited (`Inco`) to
establish a 50:50 unincorporated joint venture (`Venture`) over six of Inco`s
properties in the Sudbury Basin, Ontario Canada.
The purpose of the Venture is to explore for, and subsequently develop and
process low sulphide PGM-rich deposits (`Deposits`) occurring away from the
typical high-grade base metals deposits in the Sudbury Basin.
The Venture will benefit from the combination of Inco`s local expertise,
experience and extensive geological database with Lonmin`s technical abilities
as a major producer of PGM.
Key aspects of the Venture:
The six properties (McKim, Denison, Levack North, Capre, Trillabelle and Wisner)
are considered to be highly attractive as exploration areas - the properties
include the former Frood, Little Stobie, Crean Hill and Vermilion mines.
Inco will contribute the rights to explore and exploit the Deposits. The
agreement includes the use of certain of Inco`s infrastructure in Sudbury,
including underground access.
In recognition of the assets contributed by Inco, Lonmin has committed to solely
fund a minimum expenditure of US$10 million over the first three years of the
Venture and, subsequently, at Lonmin`s annual election, to expend a minimum of
US$3 million per year. After Lonmin has solely funded expenditures of US$32
million, Inco and Lonmin will fund the Venture jointly.
The Venture will pay to Inco a 3% Net Smelter Royalty on all product sourced
from the Deposits.
If appropriate, a dedicated PGM mill and concentrator will be established by the
Venture to process Deposits, and potentially to process third party ore, prior
to custom smelting and refining to saleable metals.
Lonmin is indemnified by Inco for environmental liabilities currently existing
on the properties.
The Venture will have no material adverse effect on Inco`s operations in the
Sudbury Basin and Inco retains the rights to any non-low sulphide PGM deposits
on the six properties.
Commenting on the agreement Lonmin`s CEO, Brad Mills, said:
`We believe the Sudbury Basin has significant unexploited potential for this
type of PGM deposit. The Venture with Inco provides the opportunity to leverage
our technical skills, extend our PGM growth profile, achieve a degree of
geographical diversification and complement our existing joint venture with
Wallbridge Mining in Sudbury. We are very pleased to be associated with Inco in
this Venture.`
Contact: Chris Davies - VP Exploration and Business Development
Lonmin Plc
+44 (0)20 7201 6000
Anthony Cardew -
Cardew Group
+44 (0) 7770 720389/ +44 (0)20 7930 0777
For further information please refer to our website:
http://www.lonmin.com/sudjv.asp
Date: 19/01/2005 11:00:20 AM
Produced by the JSE SENS Department
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