News
February 15, 2006The Acquisition results in significant benefits and synergies, including:
- Profitable current production of approximately 100,000 oz of PGM per annum from two mines at Crocodile River
- An 86 million oz PGM resource base
- Future production expansion to 250,000 oz PGM per annum at Crocodile River
- Two new mines to commence production in 2007
- A PGM beneficiation plant
- A proven and experienced operational and development management team
- Synergies for the development of Kennedy's Vale and Spitzkop
- Water rights for the development of Kennedy's Vale and Spitzkop.
- Fully BEE compliant
- Access to international capital
As a condition of the closing of the Acquisition, Eastplats is to complete an equity financing of a minimum of Cdn$100,000,000, shall have acquired an outstanding convertible loan to Barplats of approximately Cdn$6,900,000 and shall retire or replace a ZAR100 million loan (approximately Cdn$18.5 million) secured by a pledge of 100,000,000 of the Barplats shares.
Barplats
Barplats is a mining company listed on the JSE and trades under the symbol BPL. Barplats' core business is the mining and processing of PGM in South Africa's Bushveld Igneous Complex ("the Bushveld"), the largest source of PGM in the world. Barplats' two main assets are the Crocodile River mines on the western limb of the Bushveld located near Brits in the North West Province and the Kennedy's Vale project on the eastern limb of the Bushveld located near Steelpoort in Mpumalanga Province, which is immediately adjacent to Eastplats' Spitzkop project. Crocodile River was re-commissioned using traditional mining methods and became profitable in 2005, and includes the Maroelabult and Zandfontein mines and the Crocette deposit.
"This acquisition will establish Eastplats as a current producer and significant player in the platinum sector. We become an immediate producer with significant production growth under development with an established operations and development team at Barplats, and effect a synergistic merger of the Spitzkop and Kennedy's Vale deposits. We do not contemplate any management changes at Barplats and look forward to working with the Barplats team to become a major producer of platinum as we continue to grow the current production at Crocodile River and move the Kennedy's Vale/Spitzkop complex into production." stated Ian Rozier, President and CEO of Eastplats.
"In less than two years we have acquired a resource base comprising 86 million PGM oz contained in shallow, high grade, platinum and rhodium rich deposits. On the Western Bushveld, the Crocodile River mines will become significant producers of PGM. On the Eastern Bushveld, Kennedy's Vale and Spitzkop can be combined into a single operation that will form one of the largest underdeveloped deposits in South Africa. With this transaction we are one step closer to our corporate objective to grow Eastplats into a major PGM producer."
Western Bushveld
At Crocodile River, the two mines supply ore to a common concentrator. Production of PGM on both mines is from the UG2 Reef which has an average thickness of 1.4m and an average dip of 18 degrees. The Zandfontein mine is accessed via four separate declines and reef development is over 33,000 meters. At the Maroelabult mine, primary access consists of two declines and reef development is over 7000 meters.
Crocodile River currently employs over 1300 people and has an excellent safety record, having recorded zero fatalities in 2006 or in 2005. Currently the two mines have a production rate of 60,000 tonnes per month ("tpm") and planned to increase this to 180,000 tpm over the next 24 months. The mine re-commissioning phase has progressed ahead of schedule over the last 9 months and yielded better than expected results; operational profitability has already been achieved and over 46,000 oz of PGM have been produced since the plant was re-commissioned in May 2005. Additionally, the beneficiation plant at Crocodile River has recently been extensively refurbished and is operating as a state of the art facility.
PGM production at Crocette, which lies to the west of the Zandfontein and Maroelabult mines is expected to commence within 12 months, with initial operations from an open pit followed by a decline and underground operations. Preliminary plans would result in a 40,000 tpm operation with a 10 year mine life. Output from Crocodile River is anticipated to rise to 130,000 oz by the end of calendar 2006, 190,000 oz by the end of calendar 2007 and 250,000 oz per annum by mid 2008.
Eastern Bushveld
With the adjoining Kennedy's Vale and Spitzkop properties on the eastern limb under common development, an integrated feasibility study will be developed that will allow the most efficient approach to mining the very large platinum and rhodium rich UG2 resource. Both properties have surface outcrops of UG2 reef that could allow early production for a low capital investment. The envisaged mining technique and design is likely to be very similar to that currently employed at Crocodile River. The water rights associated with Kennedy's Vale could be utilized for a common processing plant for production from both properties. With the technical, development and operating skills of the Barplats team, Eastplats is positioned to fast track the development.
Assuming a positive feasibility study, Eastplats' Mareesburg resource will give the company incremental near term production in 2007.
Mineral Resources
Western Bushveld -- Crocodile River
The resource contained in the UG2 reef as reported by RSG Global in an independent NI43-101 technical report dated January 1, 2006 was as follows;
| Measured Resource |  |
4.2 Mt @ 4.41g/t (3PGE +Au) | |
(0.6 M oz PGM) |
| Indicated Resource | 22.6 Mt @ 4.41g/t (3 PGE + Au) | (3.2 M oz PGM) | ||
| Inferred Resource | 51.5 Mt @ 4.56g/t (3PGE + Au) | (7.6 M oz PGM) |
The metal contribution (or prill splits) for the resource at CRM are Pt 62.2%; Pd 27.0%; Rh 10.1%;and Au 0. 6%.
Eastern Bushveld - Kennedy's Vale
Barplats holds the PGM mineral rights to the farms Kennedy's Vale 361 KT, De Goedeverwachting 332KT, Belveder 362 KT and portions of Tweefontein 360 KT and Boschkloof 331 KT, in total comprising 6,734 hectares, and collectively known as the Kennedy's Vale PGM project. Mineral Resource estimates in the UG2 reef at Kennedy's Vale as reported by RSG Global in an independent NI43-101 technical report dated January 1, 2006 were as follows;
| Measured Resource | |
152.1 Mt @ 5.41 g/t (5PGE + Au) | |
(26.5 M oz PGM) |
| Indicated Resource | 70.0 Mt @ 6.17 g/t (5PGE + Au) | (13.9 M oz PGM) |
The metal contribution (or prill splits) for the UG2 Reef at Kennedy's Vale are Pt 44.6%, Pd 29.9%, Rh 8.3%, Ru 13%, Ir 3.2% and Au 1%.
Mineral Resource Estimates for the Merensky Reef at Kennedy's Vale were reported by Barplats in 2005 as follows;
| Indicated Resource | |
96.5 Mt @ 3.88 g/t (5PGE + Au) | |
(12.1 M oz PGM) |
| Inferred Resource | 67.3 Mt @ 3.44 g/t (5PGE + Au) | (7.5 M oz PGM) |
The metal contribution (or prill splits) for the Merensky Reef at Kennedy's Vale are; Pt 53%, Pd 30.1%, Rh 2.9%, Ru 6.1 %, Ir 1% and Au 6.1%.
Estimates for the Merensky Reef at Kennedy's Vale are 'historical resources' and should not be relied upon.
From the various resource estimates reported on the Crocodile River, Kennedy's Vale, Spitzkop and Mareesburg PGM projects, total contained PGM ounces in the reported resource base that will be controlled by Eastplats are summarized as follows;
| Crocodile River (Measured and Indicated) | |
3.8 M oz |
| Crocodile River (Inferred) | 7.6 M oz | |
| Spitzkop (Measured and Indicated) | 13.0 M oz | |
| Kennedy's Vale (Measured and Indicated) | 52.5 M oz | |
| Kennedy's Vale (inferred) | 7.5 M oz | |
| Mareesburg (Measured and Indicated) | 2.0 M oz |
"With the Acquisition, the company will have a resource base containing over 86 million ounces of PGM. This portfolio of high grade, platinum and rhodium rich deposits is strategically located for integrated production and future expansion." stated Ian Rozier, President and CEO of Eastplats.
Closing of the Acquisition remains subject to completion of satisfactory due diligence, receipt of all necessary regulatory approvals, including acceptance of the Toronto Stock Exchange and approval by the Board of Directors of Eastplats. The Agreement provides that termination by either side, other than as a result of unsatisfactory due diligence or fundamental breach, will trigger a Cdn$3,000,000 break fee.
For this transaction, Eastplats is being advised by Canaccord Capital Corporation and the vendors are being advised by GMP Securities Ltd.
The company will host a conference call on Wednesday, February 15, 2006 at 9:00 a.m. Pacific Standard Time (12:00 p.m. Eastern) to outline and discuss the acquisition. The conference call may be accessed by dialing 1-877-385-4099 in Canada and the United States, or +1-604-899-2339 internationally, using conference access code: 5535810#. The conference call will be archived for later playback until March 01, 2006 and can be accessed by dialing 1-877-653-0545 within North America or +1-403-232-0933 internationally using conference I.D. number: 285852.
The Qualified Person having prepared the contents of this news release is Mr. Ian Rozier, B.Sc.(Hons), M.Sc., P.Eng.
For further information, please contact:
Mr. Ian Rozier, M.Sc., P. Eng., President & CEO
Email: info@eastplats.com
Website: www.eastplats.com
#408 - 837 West Hastings Street
Vancouver, BC, Canada, V6C 3N6
Tel: 604-685-6851 Fax: 604-685-6493
Further information on Barplats can be found on the company's website: www.barplats.net.
Caution Regarding Forward Looking Statements:
Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those with respect to the price of gold, silver and copper, the timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks relating to the integration of the acquisition, risks relating to international operations, risks relating to joint venture operations, the actual results of current exploration activities, actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of gold, silver and copper, as well as those factors discussed in the section entitled "Risk Factors" in the Form 20-F as on file with the Securities and Exchange Commission in Washington, D.C. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
Cautionary Note to U.S. Investors Concerning Estimates of Measured, Indicated and Inferred Resources:
This presentation uses the terms "Measured", "Indicated" and "Inferred" Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. "Inferred Resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
