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ARM forms 50:50 joint venture with LionOre on Nkomati

2 February 2005

African Rainbow Minerals Limited (ARM) is pleased to announce the formation of a 50:50 unincorporated joint venture with LionOre Mining International Limited (LionOre) at ARM’s Nkomati nickel mine in a transaction valued at US$48.5 million (approximately ZAR290 million).

The US$48.5 million payment is made up as follows: US$28.5 million in cash on closure for a 50% undivided share in the partnership, and LionOre will also pay an additional US$20 million for participation in the significant Nkomati expansion project if the two partners agree to proceed. LionOre, a major producer of nickel globally, is also the owner of the Activox® technology, which is being considered for the Nkomati expansion project. As a first step, ARM and LionOre will utilize their joint skills and experience to review and improve on the technical and economical feasibility of the expansion.

ARM’s Chief Executive Officer, André Wilkens said “This transaction forms part of ARM’s defined growth strategy and we are delighted to introduce a partner like LionOre with its proven nickel track record into Nkomati. LionOre, which is in a position to fund its own share of the expansion participation, also brings important technical and operational skills to the new joint venture. ARM shareholders’ benefits will be enhanced in that the operating efficiencies that LionOre can bring to Nkomati will result in a longer-life mine that will remain a low-cost operator with increased nickel and PGM production.”

Commenting on the acquisition, Colin Steyn, President and CEO of LionOre said “The partnering of LionOre and ARM at the Nkomati mine is a common sense transaction. ARM brings to the partnership an accretive short-term production supply and a potential long-term growth project. LionOre, in turn offers technical and operational expertise. The viability of the expansion project at Nkomati is enhanced given LionOre’s proven track record of mining a similar disseminated orebody at the Phoenix Mine in Botswana. We also envisage using our proprietary Activox® technology to overcome the technical difficulties of economically processing the concentrates.”

The Nkomati mine, located approximately 300km east of Johannesburg in the Mpumalanga province, is one of the lowest cash-cost nickel mines in the world. The mine consists of two deposits, a Massive Sulphide Body (“MSB”), which is currently being mined, and a larger disseminated ore-body, which offers new production potential.

The MSB currently produces 4 500 to 5 000 tonnes of nickel annually, with significant by-products including copper (2 800 tonnes), palladium (22 000 ounces) and platinum (7 000 ounces). The mine is operating at an average cash cost of US$1.02/lb, net of by-product credits. The MSB operation is expected to continue at current production levels until the third quarter of 2007.

In addition, LionOre will acquire a 50% share in Nkomati’s disseminated ore body, which offers significant expansion potential. This orebody is very similar in geology to LionOre’s Phoenix Nickel Mine at Tati Nickel in Botswana with a similar production mix.

Nkomati has an estimated reserve of nearly 63 million tonnes with around 312 000 tonnes of contained nickel at a grade of 0.50% nickel. The orebody has a total estimated mineral resource of 139 million tonnes of ore containing 680 thousand tonnes of nickel. ARM conducted a feasibility study in 2002 to confirm the viability of the project and the partners will be reviewing the study further to assess pit optimization, Activox® plant design, PGM recovery processes and financial reviews. The expansion project would increase production significantly to about 16 500 tonnes per annum for an additional 16 years, extending the life of mine to 2023. Expansion capital expenditure is estimated at US$310 million (using exchange rates at the time the feasibility study was done).

Certain conditions remain to be fulfilled, including approval in terms of the South African Competitions Act and South African Exchange Control Regulations. These conditions are expected to be fulfilled within 120 days.

For more information please contact:

Pieter Rörich
Office: +27(11) 779 1300
or: 082 570 5064
Email: pieter.rorich@arm.co.za

Note to Editors:

African Rainbow Minerals is a South African-based diversified mining company with ferrous metals, nickel and platinum operations. The company also has an exploration portfolio in Zambia, the DRC and Namibia. ARM has a significant interest in gold, with a 16.2% shareholding in Harmony. ARM is listed on the JSE Securities Exchange, South Africa and the London Stock Exchange.

LionOre Mining is an international nickel and gold producer with a strong record of growth through an integrated program of acquisitions, exploration success, and operational efficiency. The company is listed on the Toronto (LIM), Australian (LIM) and London (LOR) Stock Exchanges. LionOre owns the Activox® process, a proprietary technology for processing metal concentrates and its operations are located in Botswana and Western Australia.

Activox® is a proprietary hydrometallurgical leaching technology that processes concentrates by ultrafine grinding followed by a low pressure, low temperature oxidative leach (1000 kPa, 110oc), to selectively dissolve the base metals from the sulfide concentrate. Nickel and copper are then separated, purified and recovered as metallic cathode via standard solvent extraction, electro-winning (SX-EW) technology. Cobalt is recovered as a carbonate by-product. LionOre has an 80% interest in Western Mineral Technology, the company that owns Activox®.

Additional information may be found at www.lionore.com and www.arm.co.za

Disclaimer:

Forward Looking Statements Certain statements in this presentation constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and Section 21E of the US Securities Exchange Act of 1934. Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward looking statements. Such risks, uncertainties and other important factors include among others: economic, business and political conditions in South Africa; decreases in the market price of commodities; hazards associated with underground and surface mining; labor disruptions; changes in government regulations, particularly environmental regulations; changes in exchange rates; currency devaluations; inflation and other macro-economic factors; and the impact of the AIDS crisis in South Africa. These forward looking statements speak only as of the date of publication of these pages. The company undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events.

Investor Relations

Jongisa Magagula
Executive Director: Investor Relations and New Business Development

Telephone: +27 (0) 11 779 1300
E-mail: jongisa.magagula@arm.co.za



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