The Mission Group Regulatory News (TMG)

13 Dec 2006 14:30

Thistle Mining Inc.13 December 2006 THISTLE MINING INC. Thistle announces conclusion of a black economic empowerment transaction inrespect of President Steyn and provides an updated forecast on production atPresident Steyn for 2006 and progress on the sale of Philippine Gold Ltd. Toronto, December 13, 2006. Transaction with Iningi Thistle Mining Inc. ("Thistle" or the "Company") (AIM:TMG) is pleased toannounce that Mindserv Limited, a wholly owned South African subsidiary of theCompany that owns President Steyn Gold Mines (Free State) (Pty) Ltd ("PSGM"),has concluded a shareholders agreement with Iningi Investments 167 (Pty) Ltd ("Iningi") (to be renamed Lefa La Gauta Pty Ltd) a broad-based black economicempowerment ("BEE") consortium pursuant to which Iningi will acquire an initial15% equity stake in PSGM. The transaction is subject to a number of normalsuspensive conditions and is expected to close early in 2007. Although thetransaction is not expected to have a material impact on the financial conditionof the Company it is a necessary step for PSGM to qualify for the grant of neworder mining rights in South Africa and as such, its strategic significance iscritical. PSGM will also be able to benefit from the significant miningcredentials and skills that members of the consortium possess. Iningi and PSGM will each appoint three representatives to a Conversion andTransformation Committee that will be mandated to steer the process to convertold order mining rights to new order mining rights. Security of tenure inrespect of active mining operations is protected for a period not exceeding fiveyears from May 1, 2004, during which period the holder of the old order miningright must apply for conversion to a new form of mining right, failing which theold order mining right ceases to exist. In order to be able to convert to neworder mining rights, the holder must submit a prescribed social and labour planand undertake to "give effect to" the BEE and socio-economic objectives of TheMineral and Petroleum Resources Development Act, 2002 of South Africa. Iningi was established as an independent, fully-owned BEE consortium ofindividuals, companies, and trusts with the aim of positioning itself within theminerals industry through investments and carefully picked strategic alliancesfor the benefit of all its stakeholders. The shareholders of the consortium areLefa La Gauta (Pty) Ltd (to be renamed Lefa La Lefatshe) (as to 60%); JuliMvulaInvestments (Pty) Ltd (as to 14%); Plumbago (Pty) Ltd (as to 5%); DisabilityEmpowerment Concerns Trust (as to 5%); Management and Professionals Trust (as to13%); and MJG Mzondeki (as to 3%). The Honorable Monontsi Joseph George Mzondekiis a Member of Parliament of the Republic of South Africa, serving in the LaborCommittee as well as the Public Service & Administration Committee for the lastseven years and is resident in the city of Welkom in close proximity to PSGM'soperations. The shareholders of Iningi possess extensive experience of the SouthAfrican mining industry. At a function to celebrate the agreement, Dennis Mashile a representative of thecontrolling shareholder released the following statement: "Lefa La Gauta is excited to be part of the revitalization of mining in thisonce prolific gold province of South Africa. We are grateful that Thistle haschosen us as partners for the initial purchasing of a 15% holding in PresidentSteyn Gold Mining Company, indicating their faith in what we will contribute tothis venture. Though we recognize the maturity and the late-stage nature of the producingasset, we are greatly encouraged by the potential that lies in the untappedresources contained within the Eldorado Formation, the Golden Triangle Area andother well-preserved reef occurrences such as the B Reef to the north of thelease area. We commit ourselves to working closely with Mindserv as the majority shareholderand PSGM management in ensuring the full and optimal utilization of the asset.In so doing, we will ensure that all the relevant stakeholders will be part ofthe journey that we are embarking on." Forecast at PSGM The Company wishes to announce a downgrade to the forecast gold production atPSGM for 2006 from the previous forecast made in early November from 147,800 ozto 143,000 oz. This adjustment follows hoisting related problems at No 2 shaftand a compressor motor failure at No. 3 shaft. The problems at No 2 shaft relateto movement in the shaft and shaft sub incline arising from the commencement oflimited mining of the No 2 shaft pillar. This movement was predicted and isbeing monitored. The rate of mining of the No. 2 shaft pillar will however berestricted until the shaft infrastructure has been upgraded and stabilized.Production from the high grade shaft pillar is planned to increase in the latterhalf of 2007. Commensurate with the reduction in forecast production, cash and total costs for2006 are now forecast to be approximately $552 and $593 per ounce. Cash cost perounce sold is not a recognized measure under Canadian GAAP. Sale of Philippine Gold Ltd ("PGO") Discussions with a potential buyer of PGO are in an advanced stage. There canhowever be no assurance that these discussions will result in a transaction. Thedesire is that the transaction will be accretive to both parties in that it willunlock synergies resulting in a potential uplift in shareholder value.Announcements on this matter will be made in due course as consideredappropriate. ________________________________________________________________________________________________ This news release contains forward-looking statements with the meaning ofapplicable securities laws including amongst others, statements made or impliedunder the headings "Transaction with Iningi","Forecast at PSGM" and "Sale ofPhilippine Gold Ltd" above relating to the Company's objectives, strategies toachieve these objectives, future cash flow and financing requirements, andsimilar statements concerning anticipated future events, results, circumstances,performance or expectations that are not historical facts. Such forward-lookingstatements reflect the Company's current beliefs and are based on informationcurrently available to management. These statements are not guarantees offuture performance and are based on the Company's estimates and assumptions thatare subject to risk and uncertainties inherent in the business of the Companyincluding those discussed in the Company's materials filed with the Canadiansecurities regulatory authorities from time to time, which could cause theactual results and performance of the Company to differ materially from theforward-looking statements contained in this news release. Those risks anduncertainties include, among other things, risks related to: the mining industry(including operational risks in exploration development and production; delaysor changes in plans with respect to exploration or development projects orcapital expenditures; the uncertainties involved in the discovery anddelineation of mineral deposits, resources or reserves; the uncertainty ofmineral resource and mineral reserve estimates and the ability to economicallyexploit mineral resources and mineral reserves; the uncertainty of estimates andprojections in relation to production, costs and expenses; the uncertaintysurrounding the ability of the Company to obtain all permits, consents andauthorizations required for its operations and activities; competition for theacquisition, exploration and development of mineral interests; and health andsafety and environmental risks), the risk of gold and foreign exchange ratefluctuations; the ability of the Company to fund the capital and operatingexpenses necessary to achieve the business objectives of the Company; theuncertainty associated with commercial negotiations and negotiating with foreigngovernments; the risks associated with international business activities; thedependence on key personnel; the ability to access capital markets; theindebtedness of the Company; and labour relations matters. Material factors orassumptions that were applied in drawing a conclusion or making an estimate setout in the forward-looking statements include that the general economy remainsstable, the demand and price of gold continues to increase and the Rand remainsstrong against the US$. It is also assumed that there will be no majordisruptions in production including failure of infrastructure, seismic activity,underground fires and labour unrest. The Company cautions that this list offactors is not exhaustive. Although the forward-looking statements contained inthis news release are based upon what the Company believes are reasonableassumptions, there can be no assurance that actual results will be consistentwith these forward-looking statements. All forward-looking statements in thisnews release are qualified by these cautionary statements. These forward-lookingstatements are made as of the date hereof and the Company, except as required byapplicable law, assumes no obligation to update or revise them to reflect newinformation or the occurrence of future events or circumstances. For further information, contact: Andy Graetz, Chief Financial Officer + 27 82 929 5562 or email toagraetz@disselgroup.com Gerry Beaney of Grant Thornton Corporate Finance at +44 (0) 207 383 5100 This information is provided by RNS The company news service from the London Stock Exchange