15 Jun 2012 07:00
BERKELEY MINERAL RESOURCES PLC
("BMR" or "THE COMPANY")
Memorandum of Understanding signed with leading Chinese metal processing group
Berkeley Mineral Resources, the AIM-listed metals processing company, announces the signing of a Memorandum of Understanding ("MoU") with Yunnan Xiangyun Feilong Nonferrous Metal Company ("Feilong").
Feilong is a significant refiner of zinc, lead and associated metals in the Peoples Republic of China. The MoU is for a period of six months during which exclusivity is reciprocally granted to BMR and Feilong. The MoU is intended to prepare for a Joint Venture ("JV") agreement to be concluded within that timeframe to commercially exploit the mineral resources at the Kabwe mine, Zambia owned by BMR.
Feilong, founded in 1995 with its principal refineries and smelting furnaces located at Xiangyun in Yunnan Province, is an established corporation and group of companies employing over 7,000 staff with an extensive infrastructure of technological, financial, marketing, mining and managerial skills. Feilong specialises in the processing of low grade and complex zinc and lead material to produce zinc, lead, cadmium, indium and other nonferrous metals to world class standards. It has also developed effective environmentally beneficial waste control techniques.
Feilong holds numerous international patents relevant to its operations and in addition to processing Chinese material, currently imports zinc and lead resources from other countries including Turkey, Iran, Australia and Guatemala.
Feilong wants to secure additional resources of zinc and lead for the processing and production of zinc and lead products. Under the MoU, BMR will provide Feilong with representative samples of material from the Kabwe lead and zinc dumps for mineralogy and metallurgy analysis in China. Feilong will also send a technical team to visit Kabwe.
The MoU sets out the intention, in principle to enter into a JV. This envisages that Feilong could make a major contribution to the development of appropriate mineralogical and metallurgical technology to exploit the zinc and lead resources at Kabwe. In addition to researching and providing appropriate processing technologies, Feilong may design, manufacture, install and commission the beneficiation plants at Kabwe. It will also facilitate the training of supervisory and plant personnel in Zambia to ensure final metal production meets defined quantities and quality. Feilong and BMR would seek to agree a long-term product off-take agreement the terms of which are yet to be agreed.
At Kabwe, The Mineral Corporation estimates that BMR owns tailings stockpiles containing 6.4 million dry tons at 5.48% Pb and 5.50% Zn content. This tonnage includes approximately 3.2Mt of JORC compliant Measured Mineral Resources for the leachplant and washplant tailings (8.44% Pb and 5.08% Zn content). It also owns underground ore bodies containing an estimated 51 million tons at a combined grade of 4.01%. The estimates for the waste material (excluding the leachplant and washplant materials) and the ore bodies do not conform to a recognised standard such as JORC and as such cannot be relied upon for economic assessment purposes.
Masoud Alikhani, BMR Chairman, commented "The Mineral Corporation has estimated that our Kabwe stockpiles alone total over 700,000 tonnes of contained zinc and lead metal. We are delighted that a world-leading company like Feilong is planning to join us in exploiting this significant resource for our mutual benefit".
Daniel Lee, Feilong's authorised representative in Europe, stated "We welcome the opportunity BMR have presented to us to apply our technologies to the important resources it has secured in Zambia. Supply shortfalls for zinc and lead are looming until the end of the decade especially in Asian markets and we look forward to working with BMR to increase supplies over the years ahead."
15th June 2012
This release has been reviewed by Dennis Human, B.Sc. (Hons), Bus. Admin (Hons), GSSA, Consulting Geologist to the Company, who is a Qualified Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies.
For further information please contact:
Berkeley Mineral Resources Plc
Masoud Alikhani, Chairman
020 7408 1181
Seymour Pierce
Stewart Dickson / Jonathan Wright (Corporate Finance)
Jeremy Stephenson / Richard Redmayne (Corporate Broking)
020 7107 8000
Lothbury Financial Services
Michael Padley /Gary Middleton
020 7868 2010