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TRANS HEX GROUP LIMITED - TRANS HEX AND MVELAPHANDA JOIN WITH ETRUSCAN DIAMONDS

Release Date: 12/05/2004 08:49
Code(s): TSX
Wrap Text

TRANS HEX GROUP LIMITED - TRANS HEX AND MVELAPHANDA JOIN WITH ETRUSCAN DIAMONDS TO EXPAND TIRISANO Trans Hex Group Limited (Incorporated in the Republic of South Africa) (Registration number: 1963/007579/06) JSE code: TSX ISIN: ZAE000018552 ("Trans Hex") JOINT RELEASE: TRANS HEX GROUP AND MVELAPHANDA RESOURCES TRANS HEX AND MVELAPHANDA JOIN WITH ETRUSCAN DIAMONDS TO EXPAND TIRISANO Mvelaphanda Exploration (Pty) Ltd ("Mvela Exploration") jointly owned by Trans Hex and Mvelaphanda Resources concluded an agreement with Etruscan Diamonds (Pty) Ltd ("Etruscan") to fund a capital expansion of the Tirisano Diamond Mine ("Tirisano") on the Nooitgedacht 131 IP property near Ventersdorp ("the mine and property") Mvela Exploration has until 31 July 2005 ("the option period") to earn a 50% interest in the mine and property by funding and carrying out an expansion of the current plant at Tirisano to achieve a design capacity of 300 metric tons per hour throughput. The estimated cost of the expansion to Mvela Exploration is approximately R41 million All production will be sold through Trans Hex"s existing tender system with a marketing fee payable to Trans Hex Mvela Exploration will fund Tirisano"s working capital requirements during the option period. Operating costs will be reimbursed from diamond sale revenue Upon successful completion of the earn-in Mvela Exploration and Etruscan will enter into a 50/50 joint venture arrangement in respect of the mine and property Mvela Exploration will act as operator of the joint venture Tirisano is expected to have a life of mine in excess of ten years THE DEVELOPMENT OF THE BLUE GUM DEPOSIT Mvela Exploration will focus on development of the Hartbeestlaagte 146 IP and Zwartrand 145 IP properties following successful completion of the expansion at Tirisano, beginning with the Blue Gum diamond deposit located about 3 kilometers south of Tirisano ("development of the Blue Gum deposit") During the option period Mvela Exploration will fund and carry out a bulk sampling programme and a feasibility study, including a valuation of the Hartbeestlaagte and Zwartrand properties Upon successful completion of the expansion at Tirisano, the bulk sampling programme and the feasibility study, Mvela Exploration will earn a 50% interest in Hartbeestlaagte and Zwartrand by making capital expenditures on the properties estimated at R190 million (based on available data at a grade of 2.8 carats per 100 cubic metres). Expenditures will include the construction of a plant on these properties with an anticipated design capacity of 600 metric tons Upon completion of the earn-in on the Hartbeestlaagte and Zwartrand properties, Mvela Exploration and Etruscan will enter into a 50/50 joint venture agreement Mvela Exploration will act as operator of the joint venture The agreement is subject to all required regulatory approvals MOGOPA COMMUNITY Mvela Exploration looks forward to working with the Mogopa community and using this opportunity to promote broad-based black economic empowerment in the region Altie Krige, Mvela Exploration director commented: "We believe this is an excellent opportunity to expand our resource and reserve base within our core competency in alluvial diamond mining. We are encouraged by initial estimates of reserves at Tirisano and resources at Blue Gum and look forward to accomplishing a successful earn-in at both these projects." Gerald McConnell, President and CEO of Etruscan commented: "This partnership represents an exciting strategic alliance for Etruscan Diamonds and will fast track the expansion of the Tirisano Diamond Mine and the development of the Blue Gum Diamond deposit." 12 May 2004 Enquiries: Mvela Exploration +27 21 937 2022 Altie Krige Etruscan +1 902 798 9701 Richard Gordon, Investor Relations College Hill +27 11 447 3030 Johannes van Niekerk +27 82 921 9110 Sam Denoon-Stevens +27 83 450 7654 Sponsor to Transhex RAND MERCHANT BANK (A division of FirstRand Bank Limited) CORPORATE FINANCE Sponsor to Mvelaphanda PricewaterhouseCoopers Corporate Finance (Pty) Limited Notes to editors Mvelaphanda Exploration Mvelaphanda Exploration (Pty) Limited was established in April 2001. The Company participates in diamond exploration activities and is able to provide the 50% BEE interest as required by government for exploration and greenfields work in South Africa. Mvelaphanda Resources Limited and Trans Hex Group Limited each own 50% of the company. Trans Hex acts as the joint venture operator. Trans Hex Trans Hex Group Limited is a world leader in the exploration, mining and marketing of high quality alluvial diamonds from both land and sea operations. Trans Hex operates mines alongside the mid and lower Orange Rivers and off the South African and Namibian coasts with annual production in excess of 200,000 carats making it the second largest diamond producer in South Africa. Trans Hex Group Limited is listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange. More extensive information on its operations can be found on its website at www.transhex.co.za. Mvelaphanda Resources Mvelaphanda Resources Limited, a JSE listed company, is a broadly based black empowerment company with significant holdings in South African precious metal, diamond and mineral assets through holdings in Trans Hex, Northam Platinum Limited and most recently Gold Fields Limited. The Gold Fields investment, for a 15% equity ownership in the world"s fourth largest gold producer, was concluded at a cost of R4.1 billion. More extensive information on Mvelaphanda Resources can be found on its website at www.mvelaphandaresources.co.za. Etruscan Etruscan Resources Inc. is a diversified Canadian junior mining company that is focused on the exploration and development of diamond properties in South Africa and gold properties in West Africa. The common shares of Etruscan are traded on the TSX under the symbol "EET". The common shares of Mountain Lake are traded on the TSX Venture Exchange under the symbol "MOA". More extensive information on Etruscan and Mountain Lake can be found on the respective websites at http://www.etruscan.com and http://www.mountain-lake.com. Date: 12/05/2004 08:49:22 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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