Orogen Gold Regulatory News (ORE)

30 Jan 2006 07:01

Aricom PLC30 January 2006 Aricom announces proposed acquisition of 49% interest in Bolshoi Sejm ilmenite and magnetite deposit in Russia's Far East 30 January 2006 Aricom PLC (the "Company" or "Aricom"), the AIM traded mining company, todayannounces the proposed acquisition of a 49% interest in the Bolshoi Sejmilmenite and magnetite deposit ("Bolshoi Sejm"). * Situated 40kms from the site of Aricom's planned beneficiation plant at Olekma, the Bolshoi Sejm deposit represents a significant and natural extension to Aricom's developing operations at Kuranakh.* The deposit is estimated to contain resources of 58 million tonnes of TiO2 and 125 million tonnes of general iron content at P1 or higher, according to independent estimates by Dalgeologiya, the Russian state geological institute.* The addition of the TiO2 resource at Bolshoi Sejm represents an almost six-fold increase on that already identified at Kuranakh, estimated at 12 million tonnes at P2 or higher. Aricom has entered into non-binding Heads of Agreement in relation to a 49%interest in a holding company which is intended to own Ural Mining, the Russiancompany that owns the licence to develop the Bolshoi Sejm deposit. Timia TradingLtd., a company related to an investment group, will own the remaining 51% inthe holding company. Implementation of these arrangements is dependent on theentry into definitive documentation. It is agreed in the non-binding Heads ofAgreement that Aricom will appoint the General Director of Ural Mining. The consideration, together with Aricom's costs relating to the acquisition ofthe 49% interest in Bolshoi Sejm, amounts to US$3.8m. Funding for this proposedacquisition is being provided by PetroPavlovsk (Cyprus) Ltd., a company in whichMr. Peter Hambro and Dr. Pavel Maslovsky and their associates have an interest.Mr. Hambro and Dr. Maslovsky are Joint Deputy Chairmen of Aricom. Aricom is currently developing the Kuranakh ilmenite and iron ore mine in theAmur Region of Russia's Far East and recently announced the proposed acquisitionof an option to purchase a 50% interest in the Kimkanskoye and Sutarskoye ironore deposits in the adjacent region, Evrejskaya Avtonomnaya Oblast. The Companyis discussing funding with banks and potential equity providers for thecompletion of the development at Kuranakh, and the appraisal of the Bolshoi Sejmand Kimkanskoye and Sutarskoye deposits. Further information on Bolshoi Sejm is set out below. Sir Malcolm Field, Chairman of Aricom commented: "Alongside our recently announced proposed option to acquire a 50% interest inthe Kimkanskoye and Sutarskoye iron ore deposits in the Evreyskaya AvtonomnayaOblast, this transaction is part of a planned strengthening and extension ofAricom's interests in the Far East of Russia. The addition of Bolshoi Sejm will significantly boost Aricom's ilmenite and ironore resource base. As with Kuranakh, the deposit has the advantage of beingclose to established transport infrastructure and we expect to deriveconsiderable benefit from its proximity to our developing operations atKuranakh. The development of these assets in a region so close to thehigh-growth Chinese markets should allow us to become an important supplier ofilmenite concentrate and iron ore to China and Asia." Enquiries: Aricom plc Millbrook PartnershipTom Swithenbank, Chief Executive Tim GreyTel: +44 (0) 20 7201 8939 Tel: +44 (0) 7796 072 298 Additional Information on Bolshoi Sejm The auction documentation issued by the Federal Agency on the Use of MineralWealth at the Ministry of Natural Resources of the Russian Federation providedthe following information: * The deposit is located 27kms from the nearest station on the Baikal Amur Magistral ("BAM") railway and 40kms from Olekma, where Aricom is building the beneficiation plant to serve the Kuranakh mine. * The licence is issued for exploration and extraction and covers an area of 26km2. The term of the licence is 25 years and may be extended for the term of exploitation, should this be longer. * Bolshoi Sejm was previously explored through surface trenching at 120 metre intervals and drilling to a depth of 400 metres on a 150 x 300 metre grid. The deposit is considered to be in group II of complexity according to the classification of the State Geological Committee on Reserves & Resources of the Russian Federation. It has been stated that the deposit is technically suitable for open pit mining to a depth of 600 metres. * The deposit is thought to be a continuous ore body forming a horseshoe at the surface, with an eastern bank and a western bank. * The eastern bank is a sharply dipping lenticular ore body. The average thickness of the body is 220 metres, narrowing in a northwestern direction from 300 to 150 metres. Trenching along the strike has determined the length of the ore body to be 1,000 metres, whilst geophysical data suggests a total length of 1,450 metres. Drilling to 467 metres showed practically no changes in the body's thickness. 67% of the eastern bank's ore volume is made up of disseminated ores with a TiO2 content of 5-8%. Massive ores and pockets of disseminated ores with TiO2 content in excess of 8% represent 21% of the eastern bank's volume. The remaining ores are of low TiO2 content (