Wits Basin Executes $45 Million Letter of Intent with London Mining
Friday, August 22nd 2008
Wits Basin Precious Minerals Inc. announced that London Mining Plc, a leading international mining and development company for the steel industry, has agreed in principle, subject to due diligence and finalization of definitive documentation, to become a 50/50 joint venture partner for the Company’s iron ore project located near Maanshan, Anhui Province in the People’s Republic of China.
Under the terms of the agreement, London Mining would provide US$45,000,000 in exchange for a 50 per cent equity interest in the project. London Mining would have appropriate board representation as well as customary and expected ownership rights in the joint venture. Following completion of acceptable due diligence the parties believe they can close the transaction within six weeks.
“We are thrilled to be able to finance this revenue-producing and cash flow-positive project with London Mining,” commented Wits Basin CEO Stephen D. King. “London Mining has focus on and expertise in the iron ore industry and we are excited to be uniquely positioned in acquiring this proven China-based iron ore business. Based on current iron ore spot pricing and the drill-indicated resources, we believe this project will be cash-flow positive in excess of US$30 million in the first twelve months of operation.”
Burnham Securities Inc. and Broadband Capital of New York City are acting as the investment advisors for Wits Basin for this transaction.
London Mining Plc is incorporated and registered in the United Kingdom and is developing mines to supply the global steel industry. London Mining has iron ore and coal mining development projects located in Saudi Arabia, Greenland, South Africa, Sierra Leone, and Mexico. It has total iron ore resources of 1.3 billion tonnes containing an estimated 459 metric tonnes of iron. In 2007, London Mining raised over US$185 million to advance iron ore production from its projects. Just recently, London Mining sold its Brazilian operation to Arcelor Mittal for US$810 million and announced a return to shareholders of US$427 million with the balance of funds received allocated to existing and new projects.
London Mining is listed on the Oslo Axess, a marketplace regulated by the Oslo Stock Exchange. The company trades under the Reuters symbol LOND.OL and Bloomberg symbol LOND:NO. For more information about the company and its operations, please visit their website at www.londonmining.co.uk.
Wits Basin Precious Minerals Inc.: Wits Basin is a minerals exploration and development company holding interests in three exploration projects and currently does not claim to have any mineral reserves on any project. Its common stock trades on the Over-the-Counter Bulletin Board under the symbol “WITM.” Website: www.witsbasin.com.