MINNEAPOLIS--(BUSINESS WIRE)--Wits Basin Precious Minerals Inc. (OTCBB: WITM) (the “Company”) is pleased to announce that it has signed definitive documents to purchase an option to acquire a 51% interest in the Taizhou Gold Mine. Additionally, a Heads of Agreement has been executed to purchase an 80.1% interest in the Xing Wang Nickel Mine. A commitment of US$25,000,000 of financing has been secured from China Gold, LLC of Kansas City in order to proceed with the following:
To acquire the 51% interest in the Taizhou Gold Mine in Xian, currently generating a positive cash flow
To acquire the 80.1% interest in Xing Wang Nickel Mine with more than 400,000 tonnes of nickel
To permit and develop the Ma’anshan Mine and Loawan Hubei Deposit
Merger related costs for pending Easyknit merger
About the Taizhou Gold Mine
The Company has purchased the right to acquire a 51% interest in the Taizhou Gold Mine which is currently in production and cash flow positive. Full engineering reports and audited financial statements have been provided by the seller. The Company intends to release detailed information in the near future regarding this project and the various parties involved.
About the Xing Wang Nickel Mine, Production Facility, and Refinery
The Company has recently signed a Heads of Agreement to acquire the Xing Wang Nickel Mine, Production Facility, and Refinery, which is currently in production. The mine is reported to contain in excess of 400,000 tonnes of nickel based on estimates by the China Geological Survey. The seller estimates that annual cash flows will exceed US$100,000,000 commencing in 2009 based on certain assumptions relative to market conditions and production matters. Full engineering reports and audited financial statements have been provided by the seller. The Company will prepare a comprehensive report on all the materials it has reviewed and release this report in the near future.
About the Ma’anshan Iron Ore Mine and Loawan Hubei Iron Ore Deposit
The Company’s proposal to acquire these properties was previously disclosed in press releases dated March 27, 2007 and March 13, 2007. The Company intends to use a portion of its financing commitment to permit and develop these two properties.
About Easyknit Merger
The Company has entered into an agreement extending the heads of agreement to June 7, 2007 to implement the merger with Easyknit Enterprises Holdings Ltd. This agreement allows the parties to complete due diligence and finalize the merger documentation.
Wits Basin’s CEO Stephen King stated, “We have executed documents relating to four potentially valuable properties in the PRC in the last few weeks in the form of either an option to buy or as a heads of agreement. We have also arranged a financing commitment of up to US$25,000,000 for these properties.
“Gold, nickel and iron ore are all very strong commodities and are in tremendous demand in China. This has been an extraordinarily-focused effort and continues to be a top priority to build value for the Company and our shareholders. We believe these efforts to acquire assets that are in production as well as those that have strong exploration and developmental potential are essential in building a sustainable business model.
“The extension agreement signed today relating to the merger is one whereby both parties will continue to work with various third parties to provide the reports necessary for regulatory purposes. Collectively, we have engaged a total of seven law firms in four nations as well as six valuation firms for these properties to complete the definitive documents. The requirements of the regulatory authorities and the rules of certified appraisers and accountants together with various legal requirements make an extension necessary for the completion of the reports in support of the merger in order for approval by the Hong Kong Stock Exchange. Both parties are using their best efforts to finalize definitive documentation as soon as possible but have allowed up to June 7, 2007 to complete the documentation.”
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, including the completion of the described financing which is subject to due diligence and completion of final documentation; the Company’s ability to enter into and meet all the conditions to consummate the proposed merger agreement; the Company’s ability to complete the described acquisitions which are subject to execution of final documentation, completion of due diligence and receipt of necessary financing; 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.
