8 Jul 2008 07:00
BERKELEY MINERAL RESOURCES PLC
ZAMBIAN MINING AND PROCESSING RIGHTS
Berkeley Mineral Resources Plc ("BMR" or the "Company"), is pleased to announce that it has entered into an agreement with Zincorous Investments Limited ("ZIL"), a company registered in Zambia, and Dorset Solutions Limited, a company registered in Switzerland, which grants to BMR the mining rights to process zinc and lead from certain tailings dumps at the Kabwe Mine in Zambia. Completion is conditional upon the Company being satisfied with a metallurgical review of the tailings dumps and is expected within a month.
Pursuant to the agreement, BMR has agreed to pay to ZIL £205,000 in cash over the next 10 months and issue 30 million new ordinary shares of nominal value 1 pence each of BMR, representing 11.7% of the enlarged issued capital to Zincorous in consideration for the grant of the mining rights.
The new ordinary shares will rank pari passu with the existing ordinary shares and application will be made on completion to the London Stock Exchange for these shares to be admitted to AIM. ZIL has undertaken not to dispose of any interest in the new ordinary shares for a period of six months from completion and not to dispose of any more than 50 per cent. of the new ordinary shares in the following six months.
The tailing dumps at Kabwe, which the Company estimates amount to 1.96 million tons of processable material, will be processed by BMR for zinc and lead. At current world prices for zinc and lead, the Directors believe the tailings can be processed profitably.
The Company's strategy for the recovery of the metal content of the dumps is as follows:
A comprehensive matrix survey of metal values will be conducted, following which the dumps will be mined.
The mined material will then be processed in a pre-concentration plant to increase the zinc and lead content.
The resulting product will then be sold to purchasers from the mine site. The Directors expect the selling prices to be based on LME concentrate prices.
The management and staff who have to date been working the tailings, comprising metallurgists, chemical engineers and mechanical engineers, will be available to work with BMR. These staff are acquainted with the mineral and metal content of the dumps and the appropriate extraction and recovery processes.
Background
The Kabwe mine is located next to Kabwe town, approximately 110 kms north of Lusaka, the capital of Zambia. The mine was discovered during 1902 and operated for 88 yrs from 1904 and produced about 1.8 million tonnes of Zinc, 0.8 million tonnes of Lead, and as by products, fused Vanadium Oxide (7,820 tonnes), Cadmium (235 tonnes) and Silver (79 tonnes). Plans are currently being prepared to reopen the mine later this year.
Recently the Kabwe deposits have attracted renewed interest due to rising resource prices, advances in ore processing technology, the economic potential not only for the Zinc and Lead mineralisation but also due to the presence of Gallium, Germanium, Indium and rare earths (Lanthanide, Scandium and Yttrium) as trace elements which could substantially enhance the value of the tailings.
8 July 2008
For further information please contact:
| Masoud Alikhani | 020 7408 1181 |
| Berkeley Mineral Resources Plc |
|
| Michael Padley | 020 7011 9411 |
| Lothbury Financial |
Berkeley Mineral Resources (BMR)