APP.L Regulatory News (APP)

6 Feb 2006 07:01

African Platinum Plc06 February 2006 African Platinum plc Ticker : APP Index : AIM Sector : Exploration FEASIBILITY STUDY ON LEEUWKOP SHOWS ACCELERATED DEVELOPMENT AND EXCELLENTRETURNS London, 6 February 2006 - London-listed platinum exploration and developmentcompany African Platinum (Afplats) today announced the results of thefeasibility study on its Leeuwkop project on the Western Limb of South Africa'sBushveld Complex. Key features of the study are: * An increase in mineral reserves from 5.3 million ounces to 6.9 million ounces, which includes both proven and probable reserves. Leeuwkop's Phase One development has a 25-year life-of-mine based on these reserves. * An accelerated development schedule which foresees the start of mining in Month 21 and full production in Month 51 against the previous plan of mining in Month 34 and full production in Month 68. * Very robust project returns of 21% using a long term basket price of US$729/ oz (R5,100/oz) and 29% at the average fourth quarter 2005 basket price of US$932/oz (R6,016/oz). * Operating costs (excluding royalties and capex) of R195 per tonne. * A total development capital estimated at R2.3 billion with peak funding of R1.9 billion. Afplats chief executive Roy Pitchford said today the feasibility study providedauthoritative confirmation that Leeuwkop was one of the most attractivedevelopment opportunities on the entire Bushveld Complex, the world's mainplatinum region. "The excellence of the project is illustrated by the fact that at a range ofprices and exchange rates, the project produces double digit returns. Many ofthe other platinum projects currently being proposed can only achievebreak-even," he said. Pitchford noted that the current project area covered only about a third of theLeeuwkop property, which itself represents about half of Afplats's contiguousholdings in the Bushveld Complex. These include the Imbasa and Inkosi projectareas, where Afplats is currently drilling with the aim of proving up aninferred resource by the second quarter of 2006. These areas are along-strikefrom Leeuwkop and thus offer additional resources at equivalent depths to thoseof the Leeuwkop development. "We're also working on the New Order Mining Right for Leeuwkop, the attainmentof which will mark a further significant advance in our drive to build Afplatsinto a premier platinum company on the solid base of our world-class assets," hesaid. As part of its conversion into a bankable feasibility study, the feasibilitystudy is currently with SRK Consulting for a third-party due diligence and acompetent person's report. Rand Merchant Bank has already been appointed toadvise Afplats on the structuring and funding of the project. Pitchford said that dependent on the successful issuing of the Mining Right,Afplats anticipates raising funds in the 2nd half of this year. During thistime, critical design work would be completed to allow the immediatecommencement of the shaft sink once the funds were in place. The project economics are summarised below: Discount Rates 15% 10% 5% IRR US$m (R6/$) (12) 73 245 14% US$m (R7/$) 67 179 400 21% US$m (R8/$) 124 257 514 27% AFRICAN PLATINUM PLC ENQUIRIES:Chief Executive - Roy Pitchford+27 (0)82 419 2581 or +44 (0)77 9390 9985 Investor & Media Relations - Kathy du Plessis+27 (0)11 728 4701, +27 (0)83 266 5847 (Mobile) or info@afplats.com Website: www.afplats.com DISCLAIMER: Investing in all equities, including natural resources-relatedequities, carries risks which should be taken into consideration when making aninvestment. This announcement contains forward-looking statements regardingAfrican Platinum plc, including the development of its mining developmentprojects. Actual results relating to any and all of these subjects may differmaterially from those presented. This information is provided by RNS The company news service from the London Stock Exchange