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PET - Petmin Limited - Petmin to invest in Red Crescent Resources and its

Release Date: 16/05/2011 08:05
Code(s): PET
Wrap Text

PET - Petmin Limited - Petmin to invest in Red Crescent Resources and its Sivas Copper Project in Turkey PETMIN LIMITED Incorporated in the Republic of South Africa Registration Number 1972/001062/06 Share Code JSE: PET & ISIN: ZAE000076014 Share Code AIM: PTMN ("Petmin" or "the Company") PETMIN TO INVEST IN RED CRESCENT RESOURCES AND ITS SIVAS COPPER PROJECT IN TURKEY Another step in Petmin`s growth path to increase its commodity and geographic footprint FOR IMMEDIATE RELEASE Johannesburg, South Africa. 16 May 2011: Petmin Limited (JSE:PET; AIM:PTMN) is pleased to announce that it has successfully entered into a transaction on 13 May 2011 with Red Crescent Resources Limited ("RCR"), a mineral exploration and development company focused on base metals development in Turkey and listed on the Toronto Stock Exchange, in Canada (TSX: RCB), to subscribe for shares in RCR and to subsequently invest directly in RCR`s Sivas Copper Project in central Turkey. The Sivas Copper Project will be explored and developed by RCR Quantum Mining A.S. ("RCR Quantum"), which is 75% owned by RCR`s Turkey-based subsidiary, Red Crescent Resources Holding A.S. ("RCRH") and 25% owned by Gensay (a Turkish-controlled entity). Petmin and RCRH will jointly be responsible for the management of the Sivas project. Ian Cockerill, Executive Chairman of Petmin, commented that, "The earn-in investment into the Sivas Copper Project represents an early-stage, low-risk and cost-effective entry into a potentially highly-prospective and scalable copper venture that meets our project investment criteria. It represents further progress on our stated intention of investing in a suite of commodities used specifically in the urbanisation and infrastructure development space, and in expanding our global footprint". "Our Business of Tomorrow growth strategy is to significantly increase the size of the company through organic and acquisitive growth, in order to deliver sustainable value to our stakeholders by focusing on a combination of cash-producing assets, near cash projects and targeted exploration programmes. The Sivas Copper Project has the potential to add significant value to our growing pipeline of projects." Petmin will invest CAD$4.64 million for a 10.1% stake in RCR, of which CAD$3 million will be invested directly into the Sivas Copper Project. Petmin will then invest up to a maximum of CAD$17 million in the project, in four conditional tranches over a period of 3.5 years, to earn up to a 37.5% interest in the Sivas Copper Project as outlined below: - Tranche 1 - CAD$1 million investment for 5% interest in the project once the project has delineated an Inferred Resource of copper of 20 million tons at >1% copper per ton; - Tranche 2 - CAD$3 million investment for an additional 10% interest (total direct interest: 15%) in the project, once the project has delineated an Inferred Resource of copper of not less than 30 million tons at > 1% copper per ton; - Tranche 3 - CAD$8 million for an further 16% interest (total direct interest: 31%) in the project, once the project has delineated an Inferred Resource of copper of 75 million tons at > 1% copper per ton, of which - 10% is designated as Measured Resource, 30% is designated as Indicated Resource and 60% is designated as Inferred Resource; - Tranch 4 - CAD$5 million investment for an additional 6.5% interest (total direct interest: 37.5%) in the project, once the project has delineated an Inferred Resource of copper of not less than 150 million tons at >1% copper per ton, of which - 20% is designated as Measured Resource, 40% as Indicated Resource and 40% as Inferred Resource, and has completed a pre-feasibility study ("PFS"). "Measured Resource", "Indicated Resource" and "Inferred Resource" referred to above, bear the same meanings ascribed to those terms in the definitions and guidelines of the Canadian Institute of Mining, Metallurgy and Petroleum reporting codes. Should the measurement criteria in Tranches 1 and 2 above be met, Petmin will be obliged to invest the CAD$1 million and CAD$3 million respectively. The investments in Tranches 3 and 4 are made at Petmin`s sole discretion. At each investing point, Petmin will have the option to cease investing should the drilling or feasibility results not meet its stipulated outcomes. Petmin intends to meet the initial consideration out of its existing cash resources. The Sivas Copper Project is located in the Sivas region of north east Central Turkey. It includes the rights to three contiguous and adjacent mining licenses covering an area of approximately 5,240 ha. Red Crescent has two other projects in the region, the Hakkari Zinc Project and the Tufanbeyli Zinc Project. RCR has an established track record in Turkey and has a competent management team. It is well entrenched with local partners in Turkey. "The Sivas Copper Project represents one of the most significant milestones to date," said Alan Clegg, Executive Chairman and CEO of RCR. "We expect to fast-track this strategic asset to make a development decision within three years. RCR is committed with Petmin to advancing this potentially world- class, well-defined mid-exploration phase copper project, up the value curve to production pending, among other things, completion of due diligence, positive exploration, and the completion of an Independent Bankable Feasibility Study ("BFS"). RCR now holds the full data and information set resultant from the period of activity under which Falconbridge Ltd/Noranda Inc. previously explored the Sivas copper project whose reports indicated the potential for grades and tons at least equal to or in excess of the targets outlined in the Petmin "Earn-In Criteria". Post the successful completion of the PFS, a Bankable Feasibility Study will be commissioned and financed pro-rata according to the parties` direct shareholding in the Sivas Copper Project at the time. The transaction is subject to fulfilment of all the normal statutory approvals, including those of the JSE, TSX and SARB. Petmin will continue to provide regular market updates on the progress made at this project as well as its iron ore and anthracite exploration projects and organic expansions in South Africa, Canada and Liberia. Enquiries: Jan du Preez, Petmin +27 11 706 1644 Charmane Russell + 27 11 880 3924 +27 82 372 5816 Disclaimer: This media release may contain certain forward-looking statements concerning Petmin`s operations, economic performance and financial condition, and plans and expectations. These statements, including without limitation, those concerning the market outlook for the company`s products, expectations of prices, production, the commencement and completion of certain exploration and production projects, may contain forward-looking views. Such views involve both known and unknown risks, assumptions, uncertainties and other important factors that could materially influence the actual performance of the company. No assurance can be given that these will prove to be correct and no representation or warranty express or implied is given as to the accuracy or completeness of such views or as to any of the other information in this media release. Petmin`s future results may differ materially from past or current results, and actual results may differ materially from those projected in the forward-looking statements. Petmin will not be responsible for any loss or damage howsoever arising of any nature, including consequential loss or damage suffered or incurred, directly or indirectly, pursuant to or as a result of the use of, or any reliance on, this media release or the information contained herein. Johannesburg 16 May 2011 Corporate Advisor and Sponsor River Group Enquiries: Petmin Jan du Preez +27 11 706 1644 Nominated Advisor (AIM) Numis Securities Limited John Harrison +44 207 260 1000 Sponsor and Corporate Advisor (JSE) River Group Andrew Lianos +27 834 408 365 Date: 16/05/2011 08:05:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). 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