7 May 2008
Dwyka
Resources Limited (‘Dwyka’ or the ‘Company’)
Option
to acquire interest in Philippines
coal project
Dwyka is pleased to announce that it has entered into
an option giving it the ability to acquire an interest in the Daguma and Bonanza
coal deposits located on the Philippines island of Mindanao (collectively, the
“Project”).
Highlights:
·
From
historical drilling, Dwyka estimates an initial overall Project resource of in
excess of 200 million tonnes of medium calorific value coal, suitable for the
export and domestic power markets
·
Aggressive
drilling programme to be pursued with the aim of increasing the Project
resource significantly
·
Project is
ideally located close to the coast (approximately 45 kilometres away), making
it suitable to supply the export markets or in-country power stations
·
Options
allow Dwyka, subject to shareholder approval, to acquire an initial 30%
interest in the Project, with the possibility of increasing this interest to a
maximum of 100%
·
Option fees
payable by Dwyka only on exercise.
Dwyka has today signed an option agreement (“ACRL
Option Agreement”) which will enable it, subject to shareholder
approval, to acquire an initial 30% interest in the Project.
The Project is located to the south of the island of
Mindanao, The Republic of The Philippines and comprises 10 coal Blocks, each
having an area of approximately 10 square kilometres (giving a total Project
area of approximately 100 square kilometres). Two of the Blocks have been
the subject of significant historical drilling (32 holes) and other work,
including the completion of a scoping study. The scoping study and
various other evaluations of the two Blocks have estimated an in situ resource
in excess of 200 million (non-JORC compliant) tonnes of coal. Dwyka
considers that there is the potential to drill up a measured, defined resource
of at least 150 million tonnes of coal within 24 months with the intention of
bringing the Project into production. The remaining 8 Blocks are also
located within the same geological coal basin, termed the Cotabato Basin,
and have recently been proven to be coal bearing through a combination of
drilling, pitting and trenching. Dwyka considers these Blocks to be
highly prospective, with the potential to be of similar size or even exceeding
the two main Blocks. The Company is also planning to initiate an
extensive grid drilling programme on the remaining 8 Blocks, which will enable
resource estimation and classification to occur within the next 12 months.
Historical analysis of the coal present at the Project
suggests that it is of medium calorific value, approximately 5,300 Kcal/kg,
making it suitable for both the export market to India
and China
and for in-country power stations and industrial (cement) purposes. The Philippines has
ready demand for coal for power stations. Other coal miners in The
Philippines are already exporting similar calorific value coal to India, China
and Hong Kong.
Pursuant to the ACRL Option Agreement, the Company has an option
(“ACRL Option”) to acquire 100% of the issued shares in
Asian Coal Resources Limited (“ACRL”). In turn, ACRL
and its local partner, MANA Resources Development Corporation (“MRDC”),
collectively hold options (“Project Options”) which, if
exercised, would enable them to acquire an initial 30% interest in the Project,
with the possibility of increasing that to a maximum of 100%. In
addition, ACRL is currently a 40% shareholder in MRDC and has an option to
increase this to a 100% interest in MRDC. ACRL and MRDC are finalizing a
shareholders’ agreement between them to ensure that the two entities act
with a common purpose in relation to the Project.
The exercise of the ACRL Option (which would trigger the subsequent
exercise by ACRL and MRDC of the Project Options, enabling an initial 30%
interest in the Project to be acquired) is subject to the approval of Dwyka
shareholders in general meeting under the ASX Listing Rules. In this
regard, Dwyka will release a shareholder circular/notice of meeting in due
course which will convene that meeting and will provide shareholders with
detailed information about the proposed transaction and its effects.
It is anticipated that the Project costs through to January 2009,
including initial option exercise expenses as well as costs related to further
exploration and drilling, equipment purchases and staffing will be in the order
of GBP10m. Dwyka will be responsible for funding those costs and it is
proposed that this will occur primarily via a placement to institutional
shareholders. Further staged payments, the first of which would occur in
July 2009, would be payable should Dwyka elect to increase its Project interest
above 30%.
Should shareholders vote in favour of the transaction, Dwyka intends to
aggressively pursue development of the Project to bankable feasibility, with a
view to commencing production as soon as possible.
Speaking today in relation to the signing of the ACRL Option Agreement, Melissa Sturgess, Chief Executive Officer of the
Company said:
”We are very excited about the prospect of
acquiring an interest in a project with the potential for near-term production,
which is located in what we believe is the most significant recently discovered
coal province in the Philippines. The Project will complement
Dwyka’s existing assets and further our stated aim of diversifying into
key commodities with a view to generating maximum value for shareholders.
Given the strong global demand for coal and record prices experienced
recently, the timing of this acquisition is excellent. We look forward to
bringing the Project into production as quickly as possible to capitalise on
these factors”.
The technical exploration and mining information contained in the above
announcement has been reviewed and approved by Ed
Nealon, who has sufficient experience which is relevant to
the style of mineralisation and type of deposit under consideration and to the
activity which he is qualified as a Competent Person as defined in the 2004
Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves'. Mr Nealon is a Dwyka Resources Limited Director
and meets the criteria of a qualified person under the AIM Guidance Note for
Mining, Oil and Gas Companies. Mr Nealon is
a member of the Australasian Institute of Mining and Metallurgy.
Ed Nealon consents to the inclusion in this announcement of such information in
the form and context in which it appears.
For further information please contact:
Melissa Sturgess
Dwyka Resources Limited
(+44) 7825 555 1397 or melissa@dwyresources.com
In United
Kingdom
Richard Brown
Ambrian Partners Limited
(+44) (0)20 7634 4700
Press enquiries
Charlie Geller or Leesa Peters
Conduit PR
+44 (0)20 7429 6604/ +44 (0)79 7006
7320
Or visit: http://www.dwyresources.com
Notes to editors:
Dwyka is focusing on the diversified minerals sector in order to achieve
maximum value for shareholders during the ongoing resource boom.
In addition to the coal opportunity the subject of this announcement,
Dwyka’s focus is primarily on nickel and gold.
Nickel
To that end,
Dwyka has a major nickel
exploration project underway in Burundi,
as well as an exciting gold
exploration programme in Swaziland.
Dwyka acquired all of the shares in Danyland Limited (‘Danyland’),
the owner of the Muremera Nickel Project in Burundi,
Africa, in January 2007. The Muremera
project is located within one of the world’s principal nickel provinces,
only 2 kilometres from, almost adjacent to and in the same geological sequence
as, the giant Xstrata/Barrick Kabanga deposit in Tanzania.
The Kabanga deposit is thought to be the world’s largest
undeveloped nickel sulphide deposit and has similar geophysical anomalies to
those at Muremera. An exploration permit has been granted in relation to
Muremera and access for exploration activities is good. The
project’s prospectivity has led to a commitment from BHP Billiton to
spend at least US$5.2 million as part of sole funding arrangements to earn up
to a 50% interest in Danyland.
Gold
Pursuant to a Shareholders and Earn-in Agreement dated
16 July 2007, Dwyka has the right to earn up to a 90% interest in Swaziland
Gold (Pty) Ltd (‘SwaziGold’), which in turn owns the
Swazigold Project in Swaziland,
Africa. The project is a large (435
square kilometre) gold exploration play in the highly prospective Archaean
Barberton Greenstone Belt in Swaziland,
historically a producer of 11.5 million ounces of gold.
In the Barberton Greenstone Belt, extensive, shallow, historic workings,
plus a lack of modern exploration, have presented Dwyka with an ideal
opportunity. Previous owners drilled some 13,500 metres of the project
area, providing the Company with a drill database that includes numerous gold
intersections. These have allowed Dwyka to establish immediate targets
for both infill drilling and the development of extensions to established zones
of mineralization. In the current favourable resources climate, it is
believed that Dwyka’s gold exploration activities will accelerate.
Diamonds
Dwyka has a shareholding of 48.2% in KimCor Diamonds Plc, an AIM-listed
diamond explorer and producer with a portfolio of projects in Southern
Africa.
Kind regards
Tamara Bolik
Dwyka Resources
Limited
98 Colin Street
West Perth WA 6005
Phone: +618 9324
2955
Fax: +618 9324
2977
Email: tamara@dwyresources.com
Website: www.dwyresources.com
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