Ferrum Resources Limited ("Ferrum") Update

RNS Number : 9792M

Emerging Metals Limited

24 August 2011

 



For Immediate Release: 24 August 2011

Emerging Metals Limited

("EML" or the "Company")

Ferrum Resources Limited ("Ferrum") Update

The Company is pleased to provide an update on its due diligence into Ferrum, its 37.23 per cent associate company and in particular the obligations of Ferrum in respect of its exploration rights in Sierra Leone, Guinea and Cameroon. 

As announced on 7 June 2011, the US$13.5 million paid by Ferrum for its 63.53 per cent. interest in CMC Guernsey Limited (which indirectly holds a 95 per cent. interest in six iron ore exploration licences in Cameroon), together with an additional US$1.5 million in cash subscriptions received by CMC Guernsey Limited, will be applied initially towards a high resolution aero-mag survey of the licence areas and thereafter as CMC Guernsey Limited judges warranted after that survey.  It is believed that the gross proceeds of US$15 million raised by CMC Guernsey Limited will fully fund its initial exploration programme for the six licences.

In Sierra Leone and Guinea, Ferrum also intends to conduct aero-mag surveys on its licence areas, as well as additional geological and reconnaissance mapping.  Ferrum has estimated these two work programmes, including in country operating and capital costs and consultants, will cost in aggregate approximately US$2.5 million over the next six months.  It is necessary for Ferrum to commence these work programmes to maintain its rights to the licence areas in good standing which it believes are highly valuable. 

Given current market conditions, the Company has determined that it will presently not exercise its option to acquire the 62.77 per cent. of issued Ferrum shares which it does not already own. The Company is meanwhile exploring options to fund Ferrum's short term cash requirements. It is currently expected that this will involve a placing by way of new ordinary shares in the Company to parties including certain directors. A further announcement in this regard will be made in due course.

-Ends-

For further information

Emerging Metals Limited	Religare Capital Markets (UK) Limited	Evolution Securities          Limited	GTH Communications
Denham Eke	Peter Trevelyan-Clark Emily Staples	Romil Patel Tim Redfern	Toby Hall Christian Pickel
[phone]	[phone]	[phone]	[phone]

 

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