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From: Nigel
ArtDate: 20th November 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.94.128
Date: 01/12/06
Time: 19:08
20th November 2006
Caledon Resources: Proposed Acquisition of the Cook Mine, Minyango Deposit and MTP
News Item - Conduit PR
PROPOSED ACQUISITION OF THE COOK MINE, THE MINYANGO DEPOSIT AND MTP PLACING OF 331,192,500 ORDINARY SHARES AT 8P PER SHARE AND APPLICATION FOR ADMISSION, SHARE CONSOLIDATION AND REDUCTION OF CAPITAL
The Directors of Caledon Resources plc ("Caledon" or the “Company”) (AIM:CDN), the London-based exploration and mining company, are pleased to provide more details of the Company’s proposed transition from the business of gold exploration to coal production with the expected resulting near-term positive cash flow. Shareholders are also informed that an admission document (the “Admission Document”) has been published today, together with a notice convening an extraordinary general meeting of the Company. A copy of this Admission Document is available from the Company’s web-site, www.caledonresources.com and is expected to be posted to shareholders later today.
Summary
Caledon to transition from explorer to producer, supported by a robust operating asset base and strong management team with experienced coal executives and operators
Cook Mine independent competent person report (“CPR”) results indicate strong expected life of mine economics: Pre-tax Net Present Value of $US 256 million using a 10 per cent. discount rate, internal rate of return of 583 per cent., cash flows of $US 30 to 67 million, 10 year coking/thermal coal reserve, 20 years of coal resources
Minyango coal deposit (the “Minyango Deposit”) independent study results: estimated 205 million tonnes of in situ coal mineralisation in a brown-field area, potential to delineate a variety of export quality coal products, close proximity to existing and extensive Cook Mine infrastructure The acquisition of the two coking coal projects marks an important milestone for Caledon and its shareholders, in its transition from pure exploration to resource production and near term cash flow.
At the Cook Mine, production is expected to begin in early 2007 and is forecast to grow over a period of three years to 1.8 million tonnes per annum
At the Minyango Deposit, the Company’s goal is to advance the project through to reserve delineation, feasibility and development. In-fill and step-out drilling has commenced at Minyango, with drill results expected to follow over the next few months.
Commenting today George Salamis, Chief Executive Officer of Caledon, said, “These acquisitions will provide shareholders with two substantial and important building blocks that, in the case of the Cook acquisition, should generate near-term positive cash flow from coal production, and, in the case of the Minyango Deposit, allows for the potential development of mid-term mining operations with the possibility of adding significant additional coal production”.
Mr Salamis added, “With the recent completion of a 10 year operating mine plan for the Cook Mine and a resource/reserve delineation plan for Minyango, Caledon has positioned itself to become an important coal producer over the long-term. We possess a very coal-experienced management team, driving Caledon’s goal to achieve mid-tier coal producer status”. For more information - Caledon Resources plc
George Salamis gsalamis@caledonresources.com Investor Relations
Donal Douglas ddouglas@caledonresources.com +44 (0) 20 7318 5780 Facsimile +44 (0) 20 7318 5781
Canaccord Adams Limited (NOMAD & Broker) Robin Birchall / Andrew Chubb +44 (0) 20 7050 6500
Conduit PR Leesa Peters/Jos Simson leesa@conduitpr.com / jos@conduitpr.com +44 (0) 20 7429 6666
Leesa Peters Conduit PR Dir Tel: ++ 44 (0) 20 7429 6600 Mob: ++ 44 (0) 781 215 9885 Fax: + 44 (0) 20 7429 6699 www.conduitpr.com
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