Farm-in agreement



 

JUBILEE PLATINUM EXECUTES HEADS OF AGREEMENT WITH INDIAN PACIFIC RESOURCES FOR IT TO FARM-IN TO AN IRON ORE OPPORTUNITY IN THE AMBODILAFA TENEMENT AREA IN MADAGASCAR

09 July 2012

 

Jubilee Platinum, the AIM listed and JSE quoted mine-to-metal specialist, is pleased to announce that it has executed a Heads of Agreement (“HoA”) with unlisted Indian Pacific Resources Limited (“IPR”) for it to farm-in up to a 90% interest in all commodities (“Commodities”) other than platinum group metals, metals traded on the London Metals Exchange and chrome (“PGEs and Metals”) in Jubilee’s Ambodilafa tenement area (“Ambodilafa Project”), Madagascar.

 

Highlights

  • Jubilee acquires participation rights in a potentially large non-core iron ore opportunity in the Jubilee Platinum owned Ambodilafa Project with minimum initial funding from Jubilee.
  • IPR to farm-in in stages up to a 90% interest in the Commodities on funding exploration.
  • IPR’s prime iron ore target identified in Samelahy area of the Ambodilafa Project is a 6km long high intensity aeromagnetic anomaly, identified in a previous airborne geophysics survey by Jubilee over the Ambodilafa Project targeting PGE-Ni-Cu prospects.
  • Ambodilafa is located only 45km from the ocean and 80km south west of Tratramarina, which is a potential logistic benefit for iron ore shipping. 

This Agreement is subject to underlying agreements and to the extent necessary to the approval of regulatory authorities.

 Ambodilafa is located on the east coast of Madagascar only 45km from the coastal town of Nosy Varika and 80km to the southwest of IPR’s key project, Tratramarina. The Samelahy prospect, a green field exploration area lies generally outside the Company’s PGE-Ni-Cu project target area.

Colin Bird, Chairman commented: “We are pleased to have entered into this agreement and to participate in this new exploration opportunity fully funded by IPR. This is in line with our stated ongoing review of strategic options for continued exploration in the country. “

 

Heads of Agreement Key Terms

Under the terms of the HoA, IPR can earn up to a 90% interest in Commodities in the Ambodilafa tenement area, excluding PGEs and Metals, through spending directly on exploration. 

The key terms of the HoA are:

Stage

Expenditure Programme (US$)

Timetable

IPR Interest Earned in Commodities

IPR Cumulative Interest Earned   in  Commodities

Stage 1

1,000,000

18 months

51%

51%

Stage 2

1,000,000

12 months

30%

81%

Stage 3

1,000,000

12 months

9%

90%

Jubilee has the opportunity at the end of each stage to retain its residual equity interest in the project through contributing to future exploration. If the Company elects not to contribute at the end of Stage 3, then IPR has the right to acquire the residual 10% interest for either US$1,500,000 in cash or convert it to a 1.5% net sales revenue royalty.

In the event that IPR’s exploration at Ambodilafa discovers a new PGEs and Metals deposit, Jubilee would have the right to farm-in to the PGEs and Metals, as if IPR was the owner for the same farm-in terms and conditions.  However, Jubilee will continue to have rights over any discovery of PGEs and Metals made by IPR.

IPR and Jubilee intend to use best endeavours to complete a formal farm-in agreement before 31st July, 2012.

 

The Ambodilafa Project

The Ambodilafa Project is made up of three granted research permits, PRs 6595, 13011 and 21910, which cover an area of approximately 48km2 . The project is located around 45km west of the coastal town of Nosy Varika on the central east coast of Madagascar and approximately 80km south west of IPR’s high priority Tratramarina Project.  IPR’s key target at Ambodilafa is the Samelahy prospect, which lies within the northern portion of the tenement area.

The Samelahy prospect was identified by IPR from a regional aeromagnetic survey, which revealed Tratramarina anomaly outside of the Ambodilafa area. It is a more intense aeromagnetic feature, which extends over a north south strike length of approximately 6km.  Jubilee’s 100m heliborne magnetic and radiometric geophysical survey over the area, conducted in June 2008, further enhanced detail over the anomaly.

Geological mapping over the southern portion of Samelahy, carried out by Jubilee in 2010 during its PGE exploration programme, identified outcropping banded iron formation.

 The Samelahy Prospect has the potential to host a significant magnetite-rich iron ore deposit.

Following completion of formal farm-in agreement, IPR’s immediate programme at Ambodilafa will be to conduct geological mapping and rock chip sampling over the Samelahy prospect. The airborne geophysical data will also be processed and interpreted in more detail to help identify suitable sites for an initial drilling programme.

Andrew Sarosi, Director of Jubilee, holds a B.Sc. Metallurgy and M.Sc. Engineering, University of Witwatersrand, is a member of The Institute of Materials, Minerals and Mining and is ‘qualified person’ as defined under the AIM Rules for Companies and a competent person under the reporting standards. He has approved the release of this announcement.

 

For further information, please contact:

Jubilee Platinum plc                          

Colin Bird/Leon Coetzer/Andrew Sarosi         

Tel +44 (0) 20 7584 2155 / Tel +27 (0) 11 465 1913/+44 (0) 1752 221937

 

finnCap Ltd

Matthew Robinson/Rose Herbert – corporate finance

Joanna Weaving – corporate broking

Tel +44 (0) 20 7600 1658

 

Shore Capital Stockbrokers Limited (Joint Broker)

Jerry Keen/ Edward Mansfield

Tel: +44 (0) 20 7 408 4090

 

Sasfin Capital

Leonard Eiser /Sharon Owens

Bishopsgate Communications 

Nick Rome/ Anna Michniewicz/ Ivana Petkova                               

Tel: +44 (0) 20 7562 3350