Completes Due Diligence on the Zebediela Project

RNS Number : 5631Y

URU Metals Limited

27 January 2014

 



27 January, 2014

URU Metals Limited

("URU" or "the Company")

Completes Due Diligence on the Zebediela Project -

A World Class Nickel Project

URU Metals Limited, (AIM:URU), the  base metals and uranium explorer and development Company, today announces the completion of its due diligence obligations with respect to Umnex Minerals Limpopo (Pty) Ltd ("UML") and confirms its 100 per cent interest in the Zebediela Nickel Project in South Africa. 

The Zebediela project is a world class project with combined inferred and indicated resources of over 1.5 billion tonnes of nickel. A NI 43-101 compliant Preliminary Economic Assessment  ("PEA") was completed in 2012 showing  indicated resources of 485.4 million tonnes averaging 0.245% nickel, and additional inferred resources of 1,115.1 million tonnes of 0.248% nickel. 

 With the completion of due diligence the consideration of 33,194,181 shares will be issued  as per the terms of the deal announced on 11^th December 2013:

·    URU will issue the first tranche of 16,563,896 million new URU shares to Umnex - these are free from trading restrictions.

·    Upon obtaining the consent of the Minister, URU will issue the second stage consideration of 16,630,285 shares of URU to Umnex.  These are subject to a lock-in agreement under which 3,326,057 shares will be released from lock-in on quarterly intervals.

As part of these transactions, URU will have the right to acquire all current prospecting right applications located in whole or in part within 5 km of the current Zebediela Prospecting Rights, and will have the right to acquire any such rights granted to SAN, Pangea, Umnex or by any corporate member of the Umbono Capital Group (Umnex's ultimate owner) within the next five years.  URU will also acquire the right to explore for and develop all platinum-group element, iron, and copper resources on the Zebediela Nickel Project, which was previously excluded from the SAN JV.  The Zebediela Nickel Project is located immediately south-east and adjacent to Ivanhoe's Mines Platreef Platinum project which is advancing towards development.

URU will be seeking a Black Economic Empowerment ("BEE") partner to help develop the Zebediela Nickel Project.  Under South African law, all mining projects are required to have at least 26% BEE equity ownership.

Commenting on the acquisition of the Zebediela Nickel Project, David Subotic, Chairman of URU Metals said:

"We have always seen the value and potential of the Zebediela Nickel Project, despite it being low grade, its size, continuity of grade and relatively easy mining makes it an incredibly large project with huge potential and long mine life, for what is in mining terms,  low CAPEX.   Naturally, we are delighted to have acquired 100 per cent of this world class project and look forward to updating investors on its progress."

A further announcement regarding the admission of new shares to trading on AIM will be made in due course.

For more information contact:

URU Metals Limited David Subotic, Chairman	+ 1 416 892 2870
WH Ireland Limited (Nominated Adviser and  Broker) Adrian Hadden James Bavister	+ 44 207 220 1666
Ribeiro Communications Ana Ribeiro	[phone]

Or log on to our website www.urumetals.com  

Notes to Editors

Background information on the Zebediela Nickel Projects

The Zebediela Nickel Project is located in the Limpopo Province of South Africa close to the platinum mining town of Mokopane, very close to existing rail, highway, and electrical power infrastructure.

The Zebediela Nickel Project is a large disseminated sulphide resource with mining engineering aspects similar to porphyry copper deposits in terms of size and grade.  The NI 43-101-compliant PEA led by the MSA Group outlined indicated resources of 485.4 million tonnes averaging 0.245% nickel, and additional inferred resources of 1,115.1 million tonnes of 0.248% nickel.  The Zebediela Project also contains significant iron minerals in the form of magnetite that is also being investigated as a potential by-product.

The PEA considered the mining and milling of only 500 million tonnes of mineralized material in an open pit mine approximately 1700 m long by 880 m wide by 250 m deep.  The proposed mining rate is 20 million tonnes per annum using a contractor mining fleet.  The strip ratio was calculated to be 0.36:1.

Extensive work was conducted on the Zebediela deposit metallurgy indicating that 50% of the total contained nickel could be recovered into a high quality saleable nickel concentrate averaging 16% Ni.  Start-up capital expenditures including contingencies and working capital are estimated to be $650 million and sustaining capital is estimated at $58 million over the life of the mine.  Operating expenditures are estimated to be $3.35 per pound of recoverable nickel.

The PEA projects a pre-tax and pre-royalty net present value of $1,018 million, an internal rate of return of 25.7% and a 3.8 year payback period at an 8% discount rate using a nickel price of $8.50/lb and a ZAR/USD ratio of 8.1.  Annual cash flow is project to be $203 million.

URU is aware of the potential value of a magnetite as an iron concentrate by-product at Zebediela since the inception of the project.  Metallurgical work investigating by-product magnetite was included in the scope of the PEA investigations, but due to analytical delays, any potential economic impact from iron by-product was not included in the report.

About URU Metals

URU Metals is an AIM listed base metals explorer and development Company. The Company has a diverse portfolio of assets which includes, the Zebediela Project in South Africa, with combined inferred and indicated resources of over 1.5 billion tonnes of nickel.  The Nӓrke Oil/ Uranium Project in Sweden which is 100 per cent owned by URU Metals following the purchase of the entire issued share capital of Svenska Skifferoljeaktiebolaget ("SSOAB") from the vendor Global Hydrocarbons Limited ("GHL"), for a maximum total consideration of $1.078 million in June 2013. A drilling plan to verify historical data is planned in 2014.  As well as the Nueltin Gold-Uranium Project in Canada. URU Metals has an exclusive option agreement with Cameco Corporation ("Cameco"), one of the world's largest uranium companies, to earn a majority interest in Nueltin Lake Gold-Uranium Project ('the Project"), in the Kivalliq Region of the Territory of Nunavut, Canada.due to start Q2 2014.

 

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