| Mon 10 Jul 2006, 7:00 | | ARM and Lionore approve Nkomati Chrome Operation |
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ARI
ARIM
ARM and Lionore approve Nkomati Chrome Operation
African Rainbow Minerals Limited
(Incorporated in the Republic of South Africa)
(Registration number 1933/004580/06)
JSE Share code: ARI LSE Share code: AGM
ISIN: ZAE000054045
("ARM" or the "Company")
ARM AND LIONORE APPROVE NKOMATI CHROME OPERATION
ARM and LionOre Mining International Ltd "LionOre"), co-owners of the Nkomati
nickel mine in South Africa, are pleased to announce the approval of a 60,000
tonne per month chrome ore mining and processing operation, following completion
of a feasibility study in June 2006.
The feasibility study investigated the viability of a low cost mining and
processing operation to exploit the oxidized massive chromitite resource. This
resource overlies the nickel mineralization and forms part of the planned Pit 3
pre-strip requirements for the future nickel exploitation of the large
disseminated nickel sulphide orebodies. A bankable feasibility study on this
expansion phase will be completed later in the year.
During the past year, Nkomati has mined and produced approximately 300,000
tonnes of lumpy and chip chrome ore from the exposed resource in Pit 3. This
product has been successfully trialed at the nearby Assmang Machadadorp Smelter
in the production of charge chrome.
The results of the feasibility study indicate an extremely robust project with a
low capital requirement of US$2.2 million (R15.5 million) which will be funded
by internal cash flow from Nkomati. The project is expected to deliver an
Internal rate of return (IRR) in excess of 200% and based on the current reserve
statement will operate for at least 5 years. Construction will commence in Q3
2006 with an anticipated rapid production ramp-up of two quarters to full
production levels expected in Q1 2007. This ramp-up includes the mining,
crushing and screening of run of mine chromite ore to produce an upgraded
saleable product with a chrome content of 38% and a chrome to iron ratio of
approximately 1.65.
Commenting on the announcement, Colin Steyn, President and Chief Executive of
LionOre said, "The chrome operation is a logical step to extract additional
economic value from the Nkomati deposit. The anticipated quick project ramp-up
will enable Nkomati to maximize the current demand for superior grade chrome
ore."
Andre Wilkens, the CEO of African Rainbow Minerals commented, "The chromitite
ore generated as part of our nickel mining pre-strip come as a welcome bonus. It
s a very attractive project in it"s own right and will assist hugely towards
reducing the stripping costs in setting up Pit 3"
Chrome Operation Resource
The table below details the chrome mineral resource for just the oxidized
massive chromitite.
Mineral Resource - Oxidized Massive Chromitite (31 May 2006)
Category Tonnes % Cr2O3
Measured 1,556,950 34.09
Indicated 5,741,610 33.14
Total 7,298,560 33.34
Inferred 2,373,470 32.85
Total in-situ Oxidized Massive
Chromite 9,672,030 33.17
The above Mineral Resources were compiled by Mr. Jonathan Woolfe (a full time
employee of ARM Limited) a Qualified Person as listed in the LionOre Annual
Technical Statement and Annual Report. He has sufficient experience which is
relevant to the style of mineralization and type of deposit under consideration
and to the activity undertaken to qualify as a Competent Person as defined in
the 2004 Edition of the JORC "Australasian Code for Reporting of Exploration
Results, Mineral Resource and Ore Reserves" and The SAMREC Code (South African
Code for Reporting Mineral Resources and Mineral Reserves) and is a Qualified
Person as defined in the Canadian National Instrument 43-101 (Standards of
Disclosure for Mineral Projects).
For further information, please contact:
Gerhard Potgieter or Pieter Rorich
Operations Executive Executive Director
Office: +27 11 779 1232 Office: +27 11 779 1478
gerhard.potgieter@arm.co.za pieter.rorich@arm.co.za
Or visit www.arm.co.za
About LionOre, ARM & Nkomati
LionOre is an international nickel producer with operations in Botswana, Western
Australia and South Africa. The company is also commercializing its proprietary
hydrometallurgical technology Activox (R) with the objective of becoming a major
vertically integrated nickel producer.
ARM is a niche-diversified mining company involved in a wide range of key
commodities and manages various operations throughout Southern Africa
The Nkomati mine is situated in the Mpumalanga province in the northeast of
South Africa, 300 km east of Johannesburg. LionOre acquired a 50% interest in
Nkomati from ARM in June 2005. The mine is currently mining the higher-grade
massive sulphide body (MSB), which is one of the lowest cost nickel mines in the
world, with first quarter 2006 cash costs of $0.39/lb net of by-products
reported.
In February 2006, the joint venture partners announced approval of the Interim
Expansion Project which will extend nickel operations at an estimated capital
cost of R384 million (US$62 million). The Interim Expansion Project anticipates
mining the disseminated Main Mineralised Zone (MMZ) orebody with commissioning
planned for September 2007 and full production, at an annualised rate of 5,000
tonnes of payable nickel, expected by the end of 2007. The expected life of mine
is 10 years.
The objective of the Interim Expansion Project is to bridge the gap between the
depletion of the MSB and the proposed Expansion Project, planned for 2010. The
Expansion Project, envisaged to include an Activox (R) Refinery, is currently
under evaluation by the joint venture partners and the Feasibility Study is
expected to be completed during 2007.
Johannesburg
10 July 2006
Issued by sponsor:
Deutsche Securities (SA) (Proprietary) Limited
Date: 10/07/2006 07:00:12 AM Produced by the JSE SENS Department
