Message #44 From:
NewsBot Date: March 13, 2007 03:13:00 AM
WITM News Wits Basin Enters into a LOI to Acquire PRC Mining Property
MINNEAPOLIS--(BUSINESS WIRE)--Wits Basin Precious Minerals Inc. (OTCBB:WITM) is pleased to announce that it has entered into a letter of intent to purchase a 100% interest in “Maanshan Mining” (as described below) located in the People’s Republic of China (PRC). Maanshan Mining estimates its 2007 free cash flow will be in excess of US$15,000,000.
Wits Basin has obtained a financing commitment for up to US$20,000,000 to be used as a down payment on the purchase. The balance of the purchase price is to be paid for in equity securities upon completion of the merger with Easyknit Enterprises Holdings Limited (SEHK: 616). The final terms of the equity issuance will be based upon completed due diligence but is estimated to be less than five percent of the outstanding share balance of the merged companies. Consummation of the purchase will require shareholder approval and is subject to various other conditions, including completion of definitive documentation.
The timing for the submission to shareholders for a vote will occur after March 31, 2007 in order to allow completion of definitive merger documents with Easyknit as well as completion of required due diligence on the Maanshan Mining properties.
About Maanshan Mining
Maanshan Mining is comprised of two operating iron mines-the Xiao Nan Shan Iron Deposits (“Xiao Nan Shan”) and the Ma Tang Iron Deposits (“Ma Tang”), and a processing plant-the Nanjing Sudan Processing Plant. The principal business of Maanshan Mining is mining, the processing and selling of iron ore and concentrates.
Maanshan Mining estimates that the total iron ore available for extraction from the two mines is approximately 95 million tons, with Xiao Nan Shan at approximately 73 million tons and Ma Tang at approximately 22 million tons. Maanshan Mining believes that these extraction estimates are sufficient to allow for mining activities, under the proposed production targets, to continue for approximately 15 years.
The proximity of the two mines to its markets avails Maanshan’s customers to favorably low transportation costs, especially in comparison with those of imported iron ore.
Maanshan Mining completed a new production line in June 2006, which has increased overall production of iron ore concentrates by 150% to 250,000 tons from 100,000 tons per annum previously. Furthermore, Maanshan Mining plans to increase the production capacity of its mining operations and processing capability to produce 600,000 tons of iron ore concentrates in 2007 and 1,000,000 tons of iron concentrates in 2008. This proposed increased production scale could provide tremendous growth in Maanshan Mining’s financial position for 2007 and going forward.
Imports of iron ore by China in 2005 increased to 275 million tons, an increase of one-third as compared to 208 million tons imported in 2004. China continues to be the largest net importer of iron ore and it is expected that China’s demand for iron ore will only increase.
About Wits Basin Precious Minerals Inc.
We are a minerals exploration and development company holding interests in three exploration projects and currently do not claim to have any mineral reserves on any project. Our common stock trades on the Over-the-Counter Bulletin Board under the symbol “WITM.” To find out more about Wits Basin Precious Minerals Inc. (OTCBB:WITM) visit our website at www.witsbasin.com.
Forward-Looking Statements and Risk Factors
The statements included in this press release concerning predictions of economic performance and management’s plans and objectives constitute forward-looking statements made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. These risks and uncertainties include, among others, the Company’s ability to obtain or maintain regulatory approvals; the Company’s ability to obtain necessary financing; the Company’s ability to enter into and meet all the conditions to consummate the proposed merger agreement, and other risks and uncertainties described in the Company’s filings from time to time with the Securities and Exchange Commission. The Company disclaims any obligation to update its forward-looking statements.
In addition, the exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves in connection with any of our projects and any estimates relating to possible reserves are subject to significant risks. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, assuming recoverable, may differ from the reserves already discovered and recovered by others in the same region of the planned areas of exploration. Further, the cost of exploration and exploitation can be extensive and there is no assurance that we will have the resources necessary or the financing available to pursue projects we currently hold interests in or to acquire interests in other mineral exploration projects that may become available. The risks we face are numerous and detailed information regarding these risks may be found in filings made by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-KSB, quarterly reports on Form 10-QSB and reports on Form 8-K.
The proposed merger with Easyknit is subject to various contingencies, including negotiation and execution of definitive documentation, completion of due diligence, receipt of required regulatory approvals, and board and shareholder approvals by both parties.
