Joint Venture Agreement

RNS Number : 8740T

Niger Uranium Limited

05 October 2010

 



For immediate release                                                                                                         5 October 2010

NIGER URANIUM LIMITED

("Niger Uranium" or "the Company")

Joint Venture Agreement with Southern Africa Nickel Limited ("SAN")

 on a Southern African nickel project portfolio

Highlights

• Niger Uranium has today established a joint venture (the "Joint Venture") with SAN, the joint owner and current developer of a portfolio of large nickel projects in Southern Africa. The Company has committed to provide funding to the Joint Venture of, in aggregate, up to US$3.6 million over the next 20 months.

• The Company believes that the Joint Venture's nickel projects have potential to host large low-grade, economic, open-pittable sulphide-nickel mineralization.

• The flagship target is the Burgersfort nickel project in the Mpumalanga Province of South Africa, which is currently held in a joint venture between SAN and BSC Resources, a South African Black Economic Empowerment partner.

• Burgersfort was previously explored by both Goldfields Mining and Development and by Falconbridge Ventures of Africa. Preliminary results based on previous data and recent geophysics have identified a number of shallow nickel targets and three deeper targets for massive sulphide mineralization.

• Further large nickel targets are being pursued by the Joint Venture in the Bushveld region of South Africa.

• The SAN portfolio also includes purchase options over nickel projects in Zimbabwe, previously explored by Falconbridge, where a large, low-grade surface deposit is targeted, and other mine dump projects across Southern Africa.

• The implementation of the Joint Venture's exploration programmes, sampling and metallurgical evaluation has been sub-contracted to Pangea Exploration (Proprietary) Limited ("Panex"), a South African-based mineral resource exploration company that, over the past 20 years, has successfully discovered and developed precious, base and industrial minerals mining projects in Southern Africa.

• Niger and SAN intend to convert the Joint Venture into a separately listed entity within the next 10 months.

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

"The combination of SAN and Panex's proven track record in discovering economic mines and the previous exploration work on these projects which points to their prospectivity for very large, open pittable sulphide nickel deposits provides the potential for significant value creation. In addition to the initial funding of US$3.6 million, we intend that the Joint Venture will be developed into a separately listed nickel entity in which Niger will continue to have a major shareholding. At the same time, we will shortly recommence exploration work on our Niger uranium projects, and these activities will be reported separately."

Introduction

The Board of Niger Uranium is pleased to announce that it has today signed a joint venture agreement (the "JVA") with Southern Africa Nickel Limited ("SAN"). Under the terms of the JVA, the Company and SAN have established a joint venture (the "Joint Venture") to develop a portfolio of nickel projects in Southern Africa which have the potential for large, shallow, low-grade sulphide-nickel deposits. The Company has committed to provide funding to the Joint Venture of, in aggregate, up to US$3.6 million over the next 20 months.

The nickel portfolio 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 acquire additional nickel projects in the Bushveld region.

The Joint Venture's nickel interests have been assembled by SAN which has targeted areas with the potential to host large-tonnage, low-grade economic nickel deposits. The objective has been to locate targets similar to deposits presently being developed or mined elsewhere, such as the Rönnbäcken project in northern Sweden, the Turnagain project in British Columbia, Canada, and the Kevista and Talvivaara deposits in northern Finland. All of these have relatively large resources (between 600 Mt and 1.0 billion tonnes) at shallow depths and are amenable to bulk, opencast mining methods, at grades of between 0.2% and 0.3% Ni, some with valuable by-products such as Co, PGE, Cu and Zn.  SAN has identified several characteristics of the deposit targets including the potential for massive-sulphide mineralization at the base, similar to those at the Uitkomst deposit, located in another of the Bushveld satellite bodies.

Under existing arrangements SAN agreed that 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.

Burgersfort Project status

SAN has entered into a joint-venture agreement with BSC Resources Limited ("BSCR") with respect to two blocks covered by prospecting permits that consist of more than 20,000 hectares, located north and south of the town of Burgersfort, 250km northeast of Johannesburg (the "Burgersfort Project"). The Burgersfort Project include the farms, Aapiesdoorndraai 298KT, Dresden 304KT, Buffelsdrift 311 KT, Vraaiuitzicht 343 KT, Sterkstroom 352 KT, Wildebeestkraal 354 KT, Welgevonden 335 KT, and all adjacent farms in Burgersfort, South Africa (the "Properties").

Pursuant to the Burgersfort Project joint venture agreement between SAN and BSCR, SAN can earn up to an initial 30 per cent. interest in the Burgersfort Project on an incremental basis by spending in aggregate up to US$1.05 million (equivalent to 1 per cent. for every ZAR250,000 spent) and by providing technical and managerial expertise. SAN can increase its interest in the Burgersfort Project to 51 per cent. by spending up to a further US$700,000.

The Properties cover a large, ultramafic, 400m-thick sill that is believed to underlie the Properties and is  one of several satellite bodies of the Bushveld Complex.  The sill, a harzburgite known as the Aapiesdooringdraai Peridotite ("ADP"), underlies an area of some 30km by 7km in extent, though there is little outcrop. The upper portion of the sill is locally weathered to magnesite to a depth of 30m, and this magnesite was previously mined on the farm Aapiesdooringdraai 298KT, which led to the original exploration of the ADP for nickel mineralization.

Burgersfort Project previous exploration

Goldfields Mining and Development ("GFMD") conducted exploration over the Properties between 1970 and 1971 and subsequently between 1989 and 1990. This exploration included limited diamond drilling on farm Mooifontein 313KT to determine the extent of the magnesite, and investigate the potential of disseminated Nickel-sulphide mineralization in the unweathered harzburgite.

GFMD drilled a number of  boreholes, with the best intersection being 1.24% Ni over 7.63m at a depth of 173m in hole MD12 (drilled to a depth of 378m) and MD13 which encountered an 8.77m interval of mineralized harzburgite with Ni values up to 0.76% Ni.  Both holes had an average Ni content from top to bottom of more than 0.3% Ni. Most of the holes intersected disseminated sulphide mineralization from surface, but failed to identify any massive sulphide-mineralization near the floor contact of the ADP. However, modeling of the geometry suggests that drilling by GFMD may have missed the main axial trough, where massive sulphides would be expected to accumulate.

Much of this drilling was conducted on Mooifontein, a farm that lies immediately to the south of Aapiesdooringdraai, which does not currently form part of the Burgersfort Project permit area.  However BSCR has applied for this mineral right.

Between 1996 and 1997, Falconbridge Ventures of Africa ("FVA") explored the ADP for nickel-sulphides. FVA flew 343 line-kilometres of airborne QUESTEM and aeromagnetics, followed by a further 804 line-kilometres of heli-borne DIGHEM surveys. This identified several anomalies which were field checked.

In 2009, BSCR acquired the mineral rights to the Properties and commenced exploration on them. Following a review of the GFMD and FVA data, BSCR carried out ground EM, IP and MT surveys over FVA's most promising anomaly. The best response from these ground surveys was from IP, which shows a strong chargeability over a 1,000m wide zone. Considered alongside other data, this suggests the presence of a harzburgite sill below a hornfels layer.

Following this work, SAN has had Ni-deportment studies performed on mineralized material collected close to the Burgersfort Project area (sample BSC 20201, sampled from borehole MD13). In this sample, sulphide makes up 2.93% of the rock, with 86.3% being pentlandite, 8.8% pyrite, 0.6% pyrrhotite and 4.2% chalcopyrite, so it is likely that a reasonable concentrate can be made from this material. However, no metallurgical test-work has, as yet, been performed.  In earlier studies by GFMD a sample from Wildebeestkraal 354 KT accounted for only 19.3% Pentlandite but a sample from the farm Aapiesdoorndraai 298 KT had 56.8% pentlandite.

These differing values for sulphide abundances show that the ADP is not homogeneous. Obviously the more pyrite and pyrrhotite present, the lower the grade of the concentrate will be. If the mineralogy does not permit the making a high-grade concentrate, then SAN believes it can make a low-grade concentrate which will then be subjected to a leach process to extract the nickel, and then to produce either a nickel-salt or nickel metal trough solvent-extraction, electro-winning methods. The principle challenge for the Joint Venture will therefore be to define a sufficiently large homogenous resource, low in pyrite and pyrrhotite (and other diluting sulphides).

Together with the large tonnage low grade nickel sulphide, there is also the potential for deep massive sulphide mineralization which was Falconbridge's target.  BSCR has recently completed a helicopter VLEM survey over the whole ADP which confirmed the two main EM targets located in the south by Falconbridge.  In addition a large EM target was located on the farm Aapiesdoorndraai 289KT.  SAN is currently in the process of conducting an extensive IP survey which will locate the better areas for disseminated sulphide mineralization.

Other nickel targets

The Joint Venture is pursuing further nickel targets associated with the Bushveld Complex in South Africa, but no agreements have yet been finalised. At this stage, SAN is in negotiations on behalf of the Joint Venture with the owners of the mineral rights over the target areas. The terms and conditions of any such agreements are likely to be similar to the Burgersfort Project joint venture agreement between SAN and BSCR.

SAN has an option to purchase the Bend Claims Project in Southern Zimbabwe.  This nickel deposit was first investigated in the 1970s and latterly by Falconbridge in 1992 who had investigated an EM anomaly postulated to be massive sulphide nickel mineralization at the base of a large Archaean ultramafic body.  Over this period, 9 diamond drill holes were completed over a strike length of about 300m with vertical depth below surface of more than 200m, but these failed to intersect the base of the ultramafic.  The drilling density was insufficient to confirm the continuity or closure of mineralization along the strike or at depth. Better visible sulphide intersections were assayed from which a small resource was calculated at a grade of 1% Ni.  Lower grade pervasive mineralization described as disseminated millerite (a high grade nickel mineral) in the core was not assayed and is the target to be investigated by SAN for the potential of a large disseminated sulphide Ni deposit 

SAN is also evaluating on behalf of the Joint Venture a portfolio of serpentinite mine dumps in Southern Africa containing between 0.2 and 0.35% nickel.   Each of the dumps contains between 7Mt and 80Mt of material, for a total of more than 250Mt. At each of the mine dump sites, there are waste rock dumps that could also further contribute to the total resource with material of similar nickel grade. The Joint Venture plans to examine the mineralogy and metallurgy of each to assess their economic potential and in particular whether the metallurgical difficulties of extracting the nickel can be overcome.

Joint Venture Agreement

Under the terms of the JVA, Niger Uranium has committed to provide funding to the Joint Venture, in aggregate, of up to US$3.6 million over the next 20 months, based on an agreed budget. Niger Uranium has agreed to provide initial funding of US$0.7million in cash on signature of the JVA and, subject to the achievement of project milestones, the balance thereafter of up to a maximum US$2.9 million. Should the total funding commitment of US$3.6 million not be spent within 20 months of signature of the JVA, Niger Uranium will nonetheless acquire its full 50 per cent. participation interest in the Joint Venture.

The initial US$0.7 million will be financed from Niger Uranium's current cash resources. The Directors of Niger Uranium intend to finance the remaining committed funding from the Company's existing working capital and as appropriate, the Company's other liquid investments.

At present the JVA is not subject to any regulatory approvals in any of the jurisdictions in which its projects are located.

Under existing arrangements SAN agreed that Panex, 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.

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. Key members of Panex include Mr. Rob Still, who has extensive and varied experience in the mineral exploration and mining industries.

In addition, Anton Esterhuizen, the Company's chief executive (non-board), is the Managing Director of Panex and is interested in 33.1 per cent. of Panex's issued share capital. Anton Esterhuizen is not a director of the Company nor any of is subsidiary undertakings and is not a substantial shareholder in the Company.

Pursuant to the management agreement, Panex will be responsible for, inter alia, the implementation of the Joint Venture's project development and exploration programmes. Panex services will 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 has managed a large number of projects either from discovery through to development and production or has contributed significantly to the development of other projects Panex also operates as an exploration business and has been successful in finding various mineral deposits in Africa, including Rhombus Vanadium (now owned by Xstrata plc), Ticor Titanium, Pangea Goldfields, Southern Mining (Corridor Sands) and Great Basin Gold (the 17 million ounce Burnstone Gold Mine). Panex was involved in the development of the Ruashi Copper mine in the Democratic Republic of the Congo and Zimbabwe Platinum Mines Ltd in Zimbabwe. Panex was responsible for the discovery of and assistance in bringing a number of African diamond deposits into production for IGE Resources AB.

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.

Mick Elias, Principal Consultant Nickel at CSA Global (Pty) Ltd, is the qualified person responsible for Niger Uranium and has supervised Mr David G. Mooney, (BA (Mod)(Hons) Nat.Sci, MA Nat. Sci., MSc Exploration Geology) who verified the data reported above. CSA Global 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

Au

Gold is dense, soft, shiny and the most malleable and ductile metal known. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water

Co

Cobalt is a hard, lustrous, gray metal and occurs in various metallic-lustered ores, such as cobaltite but is mainly produced as a by-product of copper and nickel mining

Cr

Chromium is a steely-gray, lustrous hard metal that takes a high polish and has a high melting point. It is also odorless, tasteless, and malleable.

Chalcopyrite

Chalcopyrite is a copper iron sulphide mineralthat crystallizes in the tetragonal system

Chrysotile

Chrysotile or white asbestos is the most commonly encountered form of asbestos and is a soft, fibrous silicate mineral in the serpentinite group of phyllosilicates.

Cu

Copper is a ductile metal with very high thermal and electrical conductivity. Pure copper is rather soft and malleable, and a freshly exposed surface has a pinkish or peachy color.

DIGHEM and EM

DIGHEM and EM are geophysical methods used to measure the electrical conductivity contrast between conductive sulphide minerals and barren silicate minerals in the earth's crust.

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.

Hornfels

Hornfels is the group designation for a series of contact metamorphic rocks that have been baked and indurated by the heat of intrusive igneous masses and have been rendered massive, hard, splintery, and in some cases exceedingly tough and durable.

Igneous rock

Igneous rock is one of the three main rock types, the others being sedimentary and metamorphic rock and is formed through the cooling and solidification of magma or lava.

Magnesite 

Magnesite is magnesium carbonate and occurs as veins in and an alteration product of ultramafic rocks, serpentinite and other magnesium rich rock types in both contact and regional metamorphic terranes   

Metamorphic rock 

Metamorphic rock is the he term for rocks that have been transformed by extreme heat and pressure.

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.

Olivine

Olivine is a mineral, when gem-quality also called peridot and is a magnesium iron silicate which is named for its typically olive-green color (thought to be a result of traces of nickel), though it may alter to a reddish color from the oxidation of iron.

Peridotite

Peridotite is a dense, coarse-grained igneous rock, consisting mostly of the minerals olivine and pyroxene.

Pentlandite

Pentlandite is an important ore of nickel, however, it does not produce good crystals and is generally only found in massive form. It is commonly associated with other sulphides such as pyrite, chalcopyrite and pyrrhotite in basic igneous rock intrusions 

PGE

Platinum group elements or the platinum group metals (abbreviated as the PGM's; alternatively, the platinoids, platidises, platinum group or platinum metals) sometimes collectively refers to six metallic elements clustered together in the periodic table. The six platinum group metals are ruthenium, rhodium, palladium, osmium, iridium and platinum. They have similar physical and chemical properties, and tend to occur together in the same mineral deposits

Pyrite

Pyrite is an iron sulphide and is the most common of the sulphide minerals

Pyrrohotite

Pyrrhotite is an unusual iron sulphidemineral with a variable iron content

Pyroxenes

Pyroxene is a group of important rock-forming inosilicate minerals found in many igneous and metamorphic rocks.

QUESTEM

QUESTEM is a geophysical method to measure the electrical conductivity contrast between conductive sulphide minerals and barren silicate minerals in the earth's crust

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.

VLEM

VLEM is a geophysical method to measure the electrical conductivity contrast between conductive sulphide minerals and barren silicate minerals.

Zinc or Zn

Zinc also known as spelter is a bluish-white, lustrous, diamagnetic metal and is hard and brittle at most temperatures, but becomes malleable between 100 and 150 degrees Celsius.

ENDS

 

END

 

 

JVEMABMTMBJMBIM