Sable Mining Africa Regulatory News (SBLM)

Sable Mining Africa Ltd/ Index: AIM / Epic: SBLM / Sector: Natural Resources

4 October 2010

Sable Mining Africa Limited ('Sable Mining' or 'the Company')

Acquires Interest in Gulukwane Iron Ore Project

Sable Mining, the AIM listed resource company, is pleased to announce that its wholly owned subsidiary, African Iron Ore Investment Limited ('AIOL'), has entered into heads of agreement to acquire 61% of each of two companies which together hold the Prospecting Rights for the Gulukwane iron ore project ('Gulukwane'), which comprises approximately 25,000 hectares in the highly prospective Thabazimbi area in the Limpopo Province of South Africa. 

Gulukwane is situated 15km north of the town of Thabazimbi, home to the large Thabazimbi Iron Ore Mine owned by Kumba Iron Ore Ltd. It is underlain by the Penge Formation, and dips at approximately 24 degrees towards the east, away from the Makopa Dome which lies to the north-west. The initial target zone within the area covered by the Prospecting Rights is immediately north and adjacent to the area held by Aquila Resources Ltd ('Aquila'), and the Board believes that the mineralised zone being targeted by Aquila extends through the centre of the Gulukwane project area.

Haematite ore is the main target and occurs as large, tabular, stratabound bodies within the basal and lower part of the Penge Iron Formation. The deposits generally occur as stratabound bodies of variable size and typically contain 15% to 35% Fe, although parts of this formation were partially transformed to deposits containing more than 60% Fe. 

The heads of agreement are conditional, inter alia, upon AIOL completing to its satisfaction legal and financial due diligence on the companies owning Gulukwane and upon it being confirmed that substantial iron ore resources exist at Gulukwane. An exploration plan has been implemented starting with a ground magnetic and gravity survey. Once all the magnetic interpretations are complete AIOL intends to implement a ten hole drilling programme, to determine whether it wishes to proceed with the acquisition.

A further announcement will be made in due course when the definitive sale and purchase agreements and shareholder agreements are completed.

Sable Mining CEO Andrew Groves said, "We believe that Gulukwane has the potential to become a high quality iron ore asset. We have gained a significant land position in a highly prospective area and will look to capitalise on this by immediately initiating a development plan to fully quantify the resource potential. The locale of Thabazimbi not only has the correct geological address but also has established infrastructure and a mining history which are all positives with regards to resource development initiatives. We are actively looking to expand our project base and Gulukwane fits our investment criteria and is a further step in our ambitions to becoming a preferential resource supplier to the steel industry."

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