Ferrum Update & Proposed Private Placement

RNS Number : 3245O

Emerging Metals Limited

15 September 2011

 



For Immediate Release: 15 September 2011

Emerging Metals Limited

("EML" or the "Company")

Update on Ferrum Resources Limited and Proposed Private Placement

EML is pleased to present this update on its 37.23 per cent associated company Ferrum Resources Limited ("Ferrum") and to announce that the Company is undertaking a private placement to parties (including certain EML directors) of up to £2,000,000 in support of Ferrum's ongoing project activities.  The majority of the proceeds will be advanced to Ferrum to fund its ongoing exploration programme in Sierra Leone.  As previously announced, EML holds an option to acquire all of the issued and to be issued share capital of Ferrum which it does not already own which it has determined (despite initial positive due diligence), given current market conditions, that it will not presently exercise.

Ferrum Highlights

·      Geophysics and preliminary exploration activities have commenced on Ferrum's interests in Sierra Leone and Cameroon, West Africa - together comprising an extensive lease area of approximately 6,500 square kilometres.

·      Potential for discovery and development of world class iron ore deposits.

·      Neighbouring explorers are far advanced with the exploration of iron ore resources - Sundance Resources Limited and Afferro Mining Inc. in Cameroon and Cape Lambert Resources Limited and African Minerals Limited in Sierra Leone.

·      Both Sierra Leone and Cameroon have attractive regulatory frameworks for mining, a commitment by the respective Governments to infrastructure development and political stability and in each country there are advanced iron ore projects underway.

·      In the Central African Republic ("CAR"), Ferrum awaits the award of exploration permits covering the Topa iron ore project; to date Ferrum has not been granted exploration rights in the CAR.

Background

Ferrum is a private British Virgin Islands company which aims to become a major international iron ore mining and exploration group. In addition to its recently acquired Cameroon iron ore interests (63.53 per cent interest in CMC Guernsey Limited which has a 95 per cent interest in six iron ore licences in Cameroon), Ferrum has a 75 per cent interest in five exploration licences in Sierra Leone as well as a reconnaissance permit in Guinea.  In addition, Ferrum has applied for two iron ore exploration permits covering the Topa Iron Ore Project in the CAR in which it holds a 75 per cent interest, with the other 25 per cent interest held by AXMIN Inc.

Sierra Leone

Earlier this year, Ferrum acquired Ferrous Africa Limited, which holds a 75 per cent interest in five exploration licences for iron ore and other minerals in Sierra Leone.  The licences are valid for four years from the date of issuance (17 January 2011) and provide Ferrum exclusive prospecting rights.

Three of the licence areas are contiguous to, or in close proximity to, the Kukuna iron ore project which was recently acquired by ASX listed Cape Lambert Resources Limited (ASX:CFE) ("Cape Lambert").  On 19 May 2011 Cape Lambert announced:

 "An exploration target size [see note 1] of 1 to 2 billion tonnes ("Bt") at 30 to 35% Fe for hematite schist has been estimated by independent and Cape Lambert geologists.  Having regard for the geophysics, geological mapping and rock chip sampling completed at Kukuna, the Company believes, the Kukuna Project has similar potential to the Marampa Project, currently being explored and developed by Cape Lambert.

In addition, Cape Lambert has been reported to be considering a possible IPO of its Sierra Leone assets in Q4 2011.

Ferrum has commenced exploration on its Sierra Leone exploration licences including airborne geophysics, geological mapping and surface sampling with a view to identifying drilling targets for 2012.

Note 1: The estimates of exploration target sizes mentioned in this announcement should not be misunderstood or misconstrued as estimates of Mineral Resources. The estimates of exploration target sizes are conceptual in nature and there has been insufficient work completed to date to estimate a Mineral Resource reported in accordance with JORC Code (2004) guidelines. Furthermore, it is uncertain if further exploration will result in the determination of a Mineral Resource.

Cameroon

Ferrum holds a 63.53 per cent interest in CMC Guernsey Limited ("CMC Guernsey") which owns, through a 95 per cent owned subsidiary, six iron ore licences in Cameroon (the "Licences").

The Licences comprise six permits for the exclusive rights to explore for iron ore and related substances in each of the Djadom, Dja, Lele, Minko, Sanaga and Binga zones in Cameroon covering a total area of approximately 6,000 square kilometres.  The Licences were granted in September/October 2010 and are valid for three years, renewable for two additional periods of up to two years each.  The permit area must be reduced by 50 per cent at each renewal.

Five of the Licences are contiguous to or in close proximity to more advanced iron ore exploration projects being undertaken by ASX listed Sundance Resources Limited (ASX:SDL) and AIM listed Afferro Mining Inc. (AIM:AFF).

CMC Guernsey has commenced geophysics, surface sampling and geological mapping with an objective of identifying drilling targets for 2012. Early indications show that the Sundance magnetic anomaly extends onto the CMC Guernsey property concession.

Central African Republic

In the CAR, Ferrum holds rights over the Topa Project through an agreement with AXMIN Inc. ("AXMIN") (TSX-V:AXM) (as announced by AXMIN on 7 September 2010).  Pursuant to the agreement, Ferrum has lodged applications for iron ore exploration licences over the same areas held by AXMIN for gold mineralisation.  The area under application covers the entire Topa Iron Belt consisting of two northwest trending ridges, West Limb and East Limb, over a strike of 28 km and 20 km, respectively, and contains the Topa Iron Ore discovery.  It has been agreed that on the date of a grant to Ferrum, by the government of the CAR, of an exploration permit covering iron rights only, AXMIN will receive an assignable 25 per cent participating interest in the Topa Iron Ore deposit, that will be free carried for the first US$4 million.  Ferrum's applications for exploration rights have been pending for some time and there is no guarantee that it will ultimately be successful in securing exploration rights to the Topa project.

Additional Information

EML's directors Stephen Dattels and Jim Mellon are indirectly interested in 11,695,811 and 3,285,714 Ferrum ordinary shares respectively with Stephen Dattels indirectly holding an option to acquire a further 1,500,000 Ferrum ordinary shares at a price of GBP0.35 per share. These interests would, assuming exercise of the option indirectly held by Stephen Dattels and no other Ferrum share issues, amount to approximately 22.9 per cent of Ferrum's issued ordinary share capital.

Stephen Dattels, Executive Co-Chairman of Emerging Metals, said:

"Ferrum's exploration teams believe that in both Sierra Leone and Cameroon potentially significant magnetic anomalies exist and that through current exploration activities Ferrum may be in a position by mid year in 2012 to outline extensive magnetic anomalies which could possibly contain economic and exploitable iron mineralisation.  The funds raised from this private placement will allow Ferrum to expedite its exploration activities in Sierra Leone.  The budgeted Cameroon exploration project is fully funded for the next 12 months."

For further information

Emerging Metals Limited	Religare Capital Markets 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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