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PET - Petmin Limited - Commercially significant maiden resource statement for Petmin`s iron sands to pig iron project in Canada Petmin Limited (Incorporated in the Republic of South Africa) (Registration number 1972/001062/06) "Committed to growth, dedicated to value" JSE code: PET AIM code: PTMN ISIN: ZAE000076014 ("Petmin" or "the Group") Commercially significant maiden resource statement for Petmin`s iron sands to pig iron project in Canada Petmin has issued a maiden resource statement for its jointly controlled North Atlantic Iron Corporation (NAIC) iron sands to pig iron project in Canada`s Labrador province, indicating as follows: - 25 30 years life of mine for Phase 1 production of 500,000 tonnes of pig iron per year - Inferred resource of 594 million tonnes of iron sands at 9.35 weight percent (wt %) heavy minerals of which 38.02% is Fe2O3 equivalent - Resource statement based on just 3% of NAIC`s 450km2 claim - Petmin has decided to accelerate investment in NAIC based on the project`s technical and economic viability, with indicated cost projections at the bottom of the cash cost curve Petmin has an earn-in option to acquire 40% of NAIC for a total consideration of US$25 million, plus a further option to acquire an additional 9.9%. Petmin`s investment to date is US$3.5 million for its current stake of 10.17% in NAIC. NAIC has a 450km2 claim in Labrador with an extensive iron sands resource close to clean cheap power and an existing port. Petmin and its partners in NAIC, Grand River Ironsands Incorporated, propose to develop an iron sands to pig iron operation for export to the US and other markets. Petmin will accelerate its investment in NAIC based on the project`s technical and economic viability. NAIC has drilled 4,500 metres and analysed more than 1,400 samples. Exploration to date and the maiden resource statement are based on just 3% of the claim, which has been drilled to a depth of 15 metres. Aeromagnetic and Lidar surveys show potential for the resource to be extended at least to 45 metres. The resource statement is based on the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) reporting guidelines (Canada`s equivalent of SAMREC/JORC). The inferred resource is 594 million tonnes of sand at 9.35 wt % heavy minerals of which 38.02% is Fe2O3 equivalent (at a cut off grade of 5% heavy minerals). It indicates a life of mine between 25 and 30 years for Phase 1 production of 500 000 tonnes of pig iron per year at the bottom of the cash curve. "We now have verifiable evidence of a very substantial resource and our exploration of a small part of it demonstrates the potential for NAIC to become a major low cost producer of pig iron," said Bradley Doig, Petmin director of business development. "The NAIC iron sands claim is logistically unchallenged, with access to abundant cheap clean hydro electric power and an existing port just seven days from US markets." Petmin and its partners have produced a concentrate of between 55% and 60% iron from which pig iron has been produced using two different technologies on a batch scale. During the next six months NAIC will carry out a continuous demonstration scale smelt test and complete an updated National Instrument (NI) 43 101 compliant statement. Exploration/drilling plans for the next six months include step out drilling as well as larger diameter drilling on the current resource to a depth of 45 meters. This deeper drilling has the potential to triple the size of the resource on the 3% of the claim currently explored. Cash costs for Phase 1 are estimated at around US$210 per tonne with an all in cost (including interest, depreciation and amortisation) of approximately US$260 per tonne. Average pricing over the last 12 months has been >US$500/t free on board (FOB) Ponta da Madeira - Brazil. At these levels, based on current capital expenditure and operational expenditure estimates, Phase 1 of the NAIC project has a net present value of over US$450 million. Tenova has been appointed and is busy with a conceptual design of the furnace. An engineering company will be contracted to carry out a similar process on the concentration plant. Pig Iron - the commodity Pig Iron is used as a feedstock into the steel making process. Most pig iron produced in the world is used in integrated steel mills with merchant pig iron (pig iron traded on world markets) making up about 70 to 80 million metric tons of the approximate 1.1 billion tonnes produced globally. Most exported pig iron is produced in Brazil which would be a direct competitor to NAIC due to its proximity to the US market. In December 2011 it was estimated that the median cost of production of the Brazilian pig iron producers was around US$475 per tonne delivered FOB to New Orleans (Stemcor). World Steel Dynamics estimates the world pig iron production requirements to increase to approximately 1.7 billion tonnes in 2025 from 1.1 billion tonnes in 2011. Qualified person The resource estimate was undertaken for Petmin by SRK Consulting Engineers and Scientists`(SRK) Mark Wanless, a geologist with more than 15 years experience in southern Africa and internationally. His expertise is in due diligence studies and mineral resource estimation in a range of commodities including old, PGEs, base metals, iron and manganese, and mineral sands. Mark is a Partner and Principal Geologist with SRK, and is registered as a Professional Natural Scientist with the South African Council for Natural Scientific Professionals. He is an associate member of the South African Institute for Mining and Metallurgy. Mark is a Qualified Person under the definitions of NI43 101. The resource estimate was also signed off by Don Hains, an independent Qualified Person in terms of NI43 101. Don Hainshas also reviewed and verified the technical information contained in this release. Don is an independent Professional Geologist who specializes in feasibility and mineral economics studies related to industrial minerals and resource development. Enquiries: Petmin Bradley Doig (Director of business development) +27 11 706 1644 Media Jonathon Rees +27 76 185 1827 Sponsor and Corporate Adviser (JSE) River Group Andrew Lianos +27 834 408 365 Nominated Adviser and Broker (AIM) Macquarie Capital (Europe) Limited Steve Baldwin +44 20 3037 2362 Nicholas Harland +44 20 3037 2369 Date: 12/03/2012 08:37:36 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`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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