GVM Gvm Metals

RNS Number:0065C
GVM Metals Ltd
26 April 2006


26 April 2006


                 GVM Acquires Coal Deposit in Limpopo Province


GVM Metals Limited (ticker: "GVM"), the South African mineral processing and
coal mining company, today announces that negotiations have now been completed
to acquire a substantial open cut coal deposit in the Limpopo province of South
Africa.


The consideration for the acquisition of a 74% interest in the permits will be
satisfied by the issue of 20,812,500 GVM Metals Ltd shares. Subsequent to the
issue of these shares, the total number of shares on issue in GVM will be
52,123,387.  The acquisition is subject to a number of conditions including the
consent of the Minister of Mines to the transfer and Shareholder approval.


The Prospecting Right acquired consists of the adjacent farms Semple, Over
Vlatke, Bergen Op Zoom, and Voorspoed and cover an area of 8,662 Ha. The
northern boundaries of the farms are formed by the Limpopo River and are 50 Kms
east of Messina.


The existence of coal on the farms has been known since the turn of the
twentieth century, although no real exploration occurred in the region until
Southern Sphere Mining and Development ( a division of Utah Mining ) undertook a
detailed exploration program in the late 1970's and early 1980's. The project
was taken to a relatively high level of confidence with the drilling of cored
and percussion boreholes with geophysical wireline logging, surface magnetic and
gravity surveys and the mining of a bulk sample "shaft". Unfortunately in the
intervening years much of the original bore hole data has been lost. It is
believed that if all this data was available, the current resource would be much
closer to being classified as measured. The project lost favour with the
dis-investment of Utah Mining from South Africa and the sale of Southern Sphere
assets in the middle 1980's, and low coal prices.


A Competent Persons Report has been prepared and is based largely on the
Feasibility Study on Overlakte completed in 1983 by Southern Sphere. It has
defined an inferred resource of 352 million tonnes with a life of mine strip
ratio of less than 5:1 (5BCM waste to 1 tonne of coal). It should be noted that
the coal seams extend into the adjoining farms and it is believed that the
resource will be substantially increased in time.


Detailed analysis of 50 boreholes and a 1535 tonne bulk sample suggest a soft
coking product quality product with a yield of 23%, a calorific value of 30MJ/
kg, ash of 12%, fixed carbon of 51-52%, total sulphur of 1.01-1.04 % and a free
swelling index of 3.0-7.0. The washing would also produce a middlings (
"steaming") product with a calorific value of 23MJ/kg and Sulphur of 1%.


The project lies some 40/50 kms north of Rio Tinto's billion plus tonne Chapudi
Coal Project. Rio have announced that they are in discussions with Eskom the
South African power parastatal to supply coal to a new Limpopo located power
station . The ability to sell the middlings/steaming coal to a proximate power
station will substantially improve the economics of the project. The project is
some 40 kms west of the main Zimbabwe to South Africa railway line which
connects to Richards Bay and the Mozambique port of Maputo.


Simon Farrell, Managing Director of GVM Metals said:


"This is a very exciting development for GVM. Domestic demand for both coking
and steaming coal has increased considerably and the export markets for coking
coal remains strong. The Limpopo area is seen by many as the new coal province
of South Africa and we intend to become a major part of that development. Work
is progressing on our Holfontein coal project at Witbank and negotiations
continue on expanding both our Limpopo and Witbank interests. The next stage of
work at Limpopo is to conduct a drilling programme to further validate the
original Utah Mining studies and to bring the current resources into the
measured category."



                             http://www.gvm.com.au/


GVM Metals Limited                   Simon Farrell

                                     T: + 61 8 9322 6776

Beaumont Cornish Limited,            Roland Cornish

Nominated Adviser                    T: +44 (0) 207 628 3396

Conduit PR                           Leesa Peters / Abigail Singleton

                                     T: +44(0) 20 7429 6600/ 6606

                                     M: 0781 215 9885 / 07739 461 061

                                     Emails: leesa@conduitpr.com /
                                     abigail@conduitpr.com


NOTES TO EDITORS:

GVM Metals Limited is registered in Australia (ACN 008 905 388) and has been
listed on the Australian Stock Exchange  ("ASX") since 1980, with the ticker
"GVM". Copies of the Company's Annual Report can be found on the Company's
website  : 

www.gvm.com.au

SOUTH AFRICA:

South Africa is the Company's principal area of expansion for mining and
minerals processing assets as illustrated by  the recent acquisitions of NiMag
and the JV of the Holfontein project. Traditionally, South Africa has been a
major  producer and exporter of coal. The vast bulk of this coal has been
sourced from the Witbank coalfields which are now in  their mature phase. Recent
developments in the demand for coal have concentrated expansion efforts towards
the  relatively underdeveloped northern coalfields, an area of great interest to
GVM. Domestic demand for coking coal is  also growing rapidly as a result of
expanding steel production in the face of contracting local supply

NIMAG :

GVM has a 74% interest in NiMag which produces a range of metal alloys and
fibres. The alloys are principally used in  improving the technical
characteristics of cast iron and also in exotic metals used in the aeronautical
industry. The Company can increase this  interest to 100%

HOLFONTEIN :

As a result of increasing power demands in Southern Africa and the switch in
South Africa from being a coking coal  exporter to importer, it was felt by the
Company that it should examine local opportunities. In April 2005 GVM acquired 
a 49% interest in a small coal mining project called 'Holfontein'. The
Holfontein Coal project is a mineable coal  deposit consisting of two mineable
coal seams, the No 5 seam, which is a coking coal, and the No 4 Seam, which is a
low-grade steam coal. The recent scoping study confirms the value of the
Holfontein property.

FUTURE EXPANSION AND ACQUISITIONS:

The Directors intend to grow the Company both organically and by acquisition
especially in the coal mining sector.  Largely through Chairman Richard
Linnell's connections, several substantial coal properties have been identified
and  negotiations have commenced regarding GVM's participation. Richard Linnell,
BSc. Hons (London), Chairman, is a  geologist with over thirty years of
experience. His early experience includes involvement in the establishment of
the Delta Manganese Project (now Manganese Metal  Company) and the Murray &
Roberts Industrial Corporation. He was also marketing manager for the Stainless
Steel  division of Middelburg Steel & Alloys and general manager of the
Manganese Division of Samancor, a joint venture  between Billiton Plc and the
Anglo American Corporation. Richard was accountable for all of Billiton's
exploration and  development activities in Africa and was an originator of the
Bakubung Initiative, a forum designed to revive the South  African mining
industry which in turn led to the establishment of the New African Mining Fund.





                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
ACQKQLBLQZBEBBE

Gvm Metals (LSE:GVM)
Historical Stock Chart
From Jun 2024 to Jul 2024

Gvm Metals (LSE:GVM)
Historical Stock Chart
From Jul 2023 to Jul 2024