Addition to Portfolio of Nick

RNS Number : 3511A

Niger Uranium Limited

31 January 2011

 



For immediate release                                                                                                          31 January 2011

NIGER URANIUM LIMITED

("Niger Uranium" or "the Company")

Addition to Portfolio of Nickel Assets

Highlights

·     Niger Uranium's joint venture partner, Southern African Nickel ("SAN"), has entered into a conditional binding agreement with Umnex Minerals Holdings Pty Ltd ("Umnex Holdings") for the joint venture to acquire an interest in the Zebediela Nickel Project close to the mining town of Mokopane in the Limpopo province of South Africa. The agreement is conditional upon the satisfactory conclusion of due diligence activities within 60 days of the date of the last signature by SAN and Umnex Holdings.

·     Upon completion, the Zebediela project will form part of the SAN-Niger Uranium nickel exploration joint venture ("Joint Venture").

·    Similar to the Burgersfort nickel project, the Company believes that the Zebediela project has the potential to host an economic source of low-grade disseminated nickel-sulphide mineralization.  Based on historic drilling, the ultramafic bodies identified to date over the project are known to contain low-grade disseminated nickel-sulphide mineralization which fits with the Joint Venture's strategy.

·     Since 1970, a number of companies have unsuccessfully explored the property for Platreef-type PGE Ni-Cu mineralization.  In 2007 the property was acquired by the current owners who drilled three deep holes to test Platreef-type PGE-Ni-Cu mineralization. Any potential PGE or Platreef-style mineralization on the Zebediela Nickel Project is excluded from the project. This PGE mineralization, if present, will not interfere with SAN's exploration activities nor with the mining of any nickel-sulphide mineralization found by the Joint Venture During the drilling of three historical boreholes (U1, U2 and U3), thick sequences of ultramafic rock comprising dunites and harzburgites were intersected with hole U2 intersecting zones of disseminated nickel-sulphide mineralization. Borehole U1 had intersected more than 600m of ultramafic rocks at an average grade of 0.26% Ni whilst Borehole U2 collared 2,500m from borehole U1 and had similar nickel grades.

·    These ultramafic bodies represent targets for the identification of disseminated nickel-sulphide mineralization.

·     SAN will continue evaluating the first of these ultramafic bodies through the drilling of between four and six shallow holes and submitting the core for extractive mineralogy testing. This is anticipated to be completed within 6 months of signature and should provide SAN with an indication that nickel-sulphide mineralization is continuous at depth and along a suitable strike length. Thereafter diamond drilling for inferred resources will commence.

·     The acquisition involves no cash consideration to be made by either the Company or SAN and does not increase the Company's committed contribution to the Joint Venture of US$3.6 million. 

·     As announced by the Company in October 2010, the intention remains that Niger and SAN will convert the Joint Venture and its associated nickel projects, into a separately listed entity within the next 8 months.

Commenting on this latest acquisition for the Joint Venture, Paul Loudon, Non-Executive Chairman of Niger Uranium, said:

"The Zebediela project is an exciting addition to our partnership with SAN. The significant strike length and width to the ultramafic body suggests the potential for discovery of a world class-size sulphide nickel deposit."

Introduction

On 27 January, Southern Africa Nickel Limited ("SAN") signed a conditional agreement (the "Agreement") with Umnex Minerals Limpopo ("Umnex Limpopo") to acquire an interest in the Zebediela Nickel Project close to the mining town of Mokopane in the Limpopo province of South Africa.

The agreement is conditional upon the satisfactory conclusion of due diligence activities by SAN and Umnex Holdings.

This acquisition will further strengthen the Joint venture's nickel portfolio which currently comprises the Burgersfort nickel project in South Africa (the "Burgersfort Project") and the Bend Claims and other concessions in Zimbabwe (the "Bend Claims Projects").  The Joint Venture intends to continue to acquire additional nickel projects in the Southern Africa.

Under existing arrangements, SAN and Niger Uranium had agreed that Pangea Exploration (Pty) Ltd ("Panex"), a South African-based mineral resource exploration company, would manage the Burgersfort Project and the Bend Claims Projects on behalf of SAN. These arrangements will continue unaltered on behalf of the Joint Venture.

Agreement with Umnex Holdings

Under the terms of the agreement, SAN will acquire 74 per cent. of the issued share capital of Umnex Limpopo, the indirect owner of the Zebediela Nickel Project. Umnex Holdings, or its nominee, will initially receive a 10 per cent. interest in SAN. Subject to the Joint Venture seeking to continue the development of the Zebediela Nickel Project, Umnex Holdings will receive a direct interest in the Joint Venture from both SAN and Niger Uranium (in equal proportions) following which the effective interest of each party in the Joint Venture will be: Niger Uranium 45 per cent., SAN 40 per cent. and Umnex Holdings 15 per cent. Closure is conditional on Umnex Holdings and SAN satisfactorily concluding their due diligence within a period of 60 days from the date of the Agreement.

Pursuant to the Agreement SAN has agreed that it will provide the funding for the development of the Zebediela Nickel Project for a period of 20 months after Closure (or such longer time until SAN has spent a minimum of R4.2m, equivalent to US$0.590 million, on direct exploration expenditures on the Zebediela Nickel Project) (the "Sole Funding Period"). If during the Sole Funding Period SAN spends more than R10m (equivalent to US$ 1.405 million) on direct nickel exploration expenditures on the Zebediela Nickel Project, such expenditures in excess of R10m (the "Excess") shall be credited to a shareholder loan account in favour of the Joint Venture.

If Umnex Holdings fails to provide its proportionate share of in the development of the Zebediela Nickel Project, SAN shall have the right to purchase Umnex Holding's shareholding in Umnex Limpopo for a consideration of R1 (One South African Rand).

If the consideration is not paid to Umnex Holdings when due, Umnex Holdings shall have the right to purchase the entire shareholding in Umnex Limpopo owned by SAN, the Joint Venture or the subsequently listed entity, as the case may be,  for a consideration of R1 (One South African Rand).

Umnex Holdings shall have the right to purchase the entire shareholding in Umnex Limpopo owned by SAN, the Joint Venture or the listed entity (as the case may be) for a consideration equal to the amount of the direct nickel exploration expenditure incurred by SAN in respect of the Zebediela Nickel Project in certain circumstances including if the Joint Venture is not listed directly or indirectly on an appropriate Stock Exchange within 15 months of Closure or if the Company fails to contribute US$3.6m in cash which it had previously committed to the Joint Venture by that time.

Management of the Zebediela Nickel Project

SAN and Umnex Holdings have agreed that, as with the Burgersfort and Bend Claims Projects, Panex, would manage the Zebediela Nickel Project on behalf of the Joint Venture.

Panex has successfully identified and developed a number of precious, base and industrial minerals mining projects over the past twenty years. Panex is based in Johannesburg and has a team offering financial, geological, metallurgical and mining services to progress mineral properties.

As previously announced, Mr Anton Esterhuizen, the Company's (non-Board) Chief Executive, is the Managing Director of Panex and is interested in 33.1 per cent. of Panex's issued share capital. Mr Anton Esterhuizen is not a director of the Company nor any of its subsidiary undertakings and is not a substantial shareholder in the Company.

Pursuant to the existing management agreement, Panex is responsible for, inter alia, the implementation of the Joint Venture's project development and exploration programmes. Panex services include the identification and planning of exploration activities in relation to the nickel portfolio throughout Southern Africa, and reporting and evaluation services in relation to these exploration activities.

Panex performs exploration services for its own account and for other clients and has investments in gold projects in Nevada, USA, South Africa and Mozambique.

For further information:

Niger Uranium

Gordon Cassidy, Finance Director

Tel: [phone]

Beaumont Cornish Limited (Nominated Adviser)

Michael Cornish

Tel: [phone]

Brand: Mining IR

Andre Morral / Dr Iestyn Adams

Tel: [phone]

Forward-Looking Statements:

This press release contains statements that are 'forward-looking'. Generally, the words 'expect,' 'intend,' 'estimate,' 'will' and similar expressions identify forward-looking statements. By their very nature, forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results, performance or achievements, or that of our industry, to differ materially from those expressed or implied in any of our forward-looking statements. Statements in this press release regarding the Company's business or proposed business, which are not historical facts, are 'forward looking' statements that involve risks and uncertainties, such as estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

These forward-looking statements speak only as of the date they are made.

Mike Venter Pr.Sci.Nat., Regional Consulting Geologist at The MSA Group is the qualified person responsible for Niger Uranium  who verified the data reported above. Mike Venter is a consultant to Niger Uranium with no interest in the company and has consented to the inclusion in this announcement of its name in the form and context in which it appears. Exploration data is acquired by Niger Uranium using best practice quality assurance and quality control protocols.

GLOSSARY

Cu

Copper is a ductile metal with very high thermal and electrical conductivity

Dunite

Dunite is an igneous, plutonic rock of ultramafic composition which mineral assemblage is greater than 90% olivine, a magnesium iron silicate.

Feasibility Study

A comprehensive study of a deposit in which all geological, engineering, operating, economic and other relevant factors are considered in sufficient detail for it to reasonably serve as the basis for a final decision by a financial institution to finance the development of the deposit for mineral production.

Hartzburgite

Hartzburgite is an ultramafic, igneous rock and is a variety of Peridotite consisting mostly of the two minerals olivine and low-calcium pyroxene

Nickel or Ni

Nickel belongs to the transition group of metals, is hard and ductile and a silvery-white metal with a slight golden tinge that takes a high polish.

PGE or PGM

Platinum group elements or metals are all transition metals comprising ruthenium, rhodium, palladium, osmium, irridium and platinum, all having similar physical and chemical properties and tending to occur together in the same mineral deposits.

Platreef

Mineralization with PGE and gold content greater than 0.5 gms per tonne and/or copper content greater than 500 ppm.

Sepentinite

Serpentinite is a rock composed of one or more serpentinite group minerals. Minerals in this group are formed by serpentinization, a hydration and metamorphic transformation of ultramafic rock from the earth's mantle. 

Serpentinization

Serpentinization is a geological low-temperature metamorphic process involving heat and water in which low-silica-mafic and ultramafic rocks are oxidised and hydrolyzed with water into serpentinite. Peridotite, including dunite at and near the seafloor and in mountain belts is converted to serpentine, brucite, magnetite, and other minerals

Ultramafic rocks

Ultramafic rocks are igneous and meta-igneous rocks with very low silica content and are composed of usually greater than 90% mafic minerals (dark colored, high magnesium and iron content). The earth's mantle is composed of ultramafic rocks.

ENDS

 

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