| Mon 23 Oct 2006, 11:49 | | AQUARIUS PLATINUM AGREEMENT WITH BAKGAGA MINING |
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AQP
AQP
AQUARIUS PLATINUM AGREEMENT WITH BAKGAGA MINING
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP & ISIN Code: BMG0440M1029
("Aquarius Platinum")
Aquarius Platinum Agreement with Bakgaga Mining Offers Opportunity to
develop prospective platinum properties in South Africa
Aquarius Platinum Limited (ASX, LSE & JSE: AQP) through its wholly owned
subsidiary Aquarius Platinum (SA) Corporate Services (Pty) Ltd ("ASACS")
announces the signing of a Farm-In Agreement with Bakgaga Mining (Pty) Ltd
("Bakgaga") to drill and conduct feasibility work at prospective Platinum
Group Metals (PGMs) bearing properties on South Africa"s Bushveld.
Bakgaga is the holder of two New Order Prospecting Rights (South African
Mineral and Petroleum Resources Development Act 2002) over prospective PGM
bearing properties to the west of the existing Lebowa Platinum Mine on the
Eastern Limb of the Bushveld Complex in South Africa. The rights held by
Bakgaga cover five farms over approximately 3,000 hectares. Based on the
position of the projected Merensky and UG2 outcrops as shown by geological
mapping, it is estimated that the rights could cover approximately 2,000
hectares each of Merensky and UG2 Reef, the two principal platinum group
metal bearing reefs.
Stuart Murray, CEO of Aquarius Platinum, commented "The agreement with
Bakgaga offers Aquarius a "blue sky" opportunity with the potential to
increase the Group"s resources and reserves significantly. We hope that
with the prospective properties being so close to an existing platinum
mining operations and the knowledge that there is both Merensky and UG2
reefs, we will be able report back to the market with reports of our
progress."
Aquarius Platinum Bakgaga Prospecting Areas
Refer to media release
Source: Aquarius Platinum
Farm-In Agreement
In agreement between ASACS and Bakgaga provides that ASACS will offer the
necessary technical expertise and funding to assess the extent of
mineralisation on the properties and to study the feasibility of a mining
project. In return ASACS will be entitled to equity in a new company
(NewCo) into which the Bakgaga rights will be transferred. ASACS"s equity
ownership of new company will increase as the feasibility work progresses.
The project development follows three stages that define ASACS participation
and spending
Stage 1: An estimated R2.5 million will be spent by ASACS on a geological
study to determine the scope of further study work. This initial study will
cover geophysics, limited drilling, analysis and testwork. In addition,
ASACS will pay Bakgaga R1.2 million for existing geological information on
the prospect. On completion of the pre-feasibility study ASACS will hold a
25% share in NewCo provided that it agrees to further advance feasibility
work.
Stage 2: ASACS will then fund a more detailed drilling programme and
feasibility study, estimated to cost approximately R20 million. On
completion of this work, ASACS will hold 40% of NewCo provided it agrees to
progress to a full bankable feasibility on the prospect.
Stage 3: ASACS will then upgrade the feasibility study to full-bankable
status at a cost estimated to be no more than R10 million. On completion of
a bankable feasibility study, ASACS will hold 51% of NewCo and have Board
control.
Shareholder Agreement
Under the terms of the Shareholder"s Agreement, the expenditure for
feasibility work by ASACS will comprise a loan to NewCo to be repaid if a
mine is established. Protection is also established if Bakgaga is unable to
fund their share of the project capital, whereby ASACS could fund the
shortfall, diluting Bakgaga to a minimum of 26%, with the 26% funded by
ASACS on behalf of Bakgaga converting to a loan.
ASACS and Bakgaga will each appoint 3 directors to the Board of NewCo,
enjoying voting rights proportioned to shareholdings, with the Chairmanship
rotating annually.
The financial exposure to ASACS is limited initially to the cost of the pre-
feasibility study, the payment to Bakgaga for geological information and the
cost of the two Bakgaga employees for approximately one year, estimated in
total at R4.5million (approximately US$ 650,000).
For further information please visit www.aquariusplatinum.com or contact:
In Australia:
Willi Boehm, Aquarius Platinum Corporate Services Pty Ltd
+61 (0)8 9367 5211
In the United Kingdom:
Nick Bias - BuckBias Ltd
nickbias@aquariusplatinum.com
+ 44 (0)7887 920 530
In South Africa:
Stuart Murray, Aquarius Platinum (South Platinum) (Pty) Ltd
+27 (0)11 455 2050
23 October 2006
Sponsor: Investec Bank Limited
Date: 23/10/2006 11:49:10 AM Produced by the JSE SENS Department
