GVM Gvm Metals

RNS Number:8674H
GVM Metals Ltd
21 August 2006

21 August 2006



                                 GVM METALS LTD

             ACQUISITION OF FURTHER COAL INTERESTS IN SOUTH AFRICA

                               BOARD APPOINTMENTS



GVM Metals Ltd ("GVM" or "Company"), the South African mineral processing and
coal mining company, is pleased to announce the following events in relation to
its Holfontein and Limpopo coal projects.



GVM has executed binding Heads of Agreement with Motjoli Resources Pty Ltd ("
Motjoli") to acquire Motjoli's 51% interest in the Holfontein coal project, its
50% interest in the Baobab Coal Joint Venture ("Baobab J.V.") and its 100%
interest in three granted prospecting rights adjacent to those held by the
Baobab J.V. The Baobab J.V holds sixteen granted prospecting rights and the
total area of the nineteen licences covers some 31,700 hectares.  The Baobab
J.V.s' coal properties are located some 40km south of GVM's existing 74% held
properties on the Limpopo River.



The consideration payable for the Holfontein and Baobab J.V. interests is
34,863,226 ordinary shares plus a further 3,417,964 ordinary shares on the grant
of export allocation at the Richards Bay Coal Terminal for a minimum of 100,000
metric tonnes (mt) of coal per annum to GVM. Richards Bay is the major port for
the exportation of coal in South Africa.



The consideration for the three Limpopo prospecting licenses owned wholly by
Motjoli is GBP0.01 per defined "economic" tonne of coal established during the
Soutpansberg/Baobab exploration program which should be concluded before the end
of 2007.



Board appointments

The Managing Director of Motjoli, Mr Nchaka Moloi is to join the Board of GVM as
a non-executive Director. Mr Moloi is a geologist and a former Deputy Director
General of the Department of Minerals and Energy. He is currently Chairman of
Alexkor and a Director of the Minerals Development Board and the National
Employment Fund.



Nonqubela Mazwai, an executive director of Motjoli is to join GVM as an
executive director responsible for the group's coal interests.  Ms Mazwai is an
independent consultant and has worked with the Minister of Minerals and Energy
and the Richards Bay Coal Terminal.



The transactions and board appointments are subject to Ministerial consent to
the transfers, South African Reserve Bank and other necessary regulactory
approvals, successful listing of GVM on the Johannesburg Stock Exchange (JSE),
which the Company is in the process of making, and GVM shareholder approval. The
directors anticipate that these conditions will be concluded by the end of
October 2006.



Coal Interests Acquired



Motjoli is GVM's joint venture partner in the Holfontein coal project which is
located in the Witbank coalfield some 100kms east of Johannesburg.  The project
contains an indicated resource of 56 million tones and a Competent Persons
Report on the project is available on the Company's website, www.gvm.com.au. A
scoping study has been completed on the project based on production of 400,000
mtpa of soft/semi-soft coking coal and 500,000 mtpa of thermal coal.  This study
is also available on the Company's website.



An infill drill program has just commenced on the Holfontein property.  The
results of this program will form the basis of the Bankable Feasability Study ("
BFS").  The BFS is expected to be completed by the end of 2007.  Discussions
have already commenced with Eskom, the parastatal power generation authority,
regarding sale of the projects thermal coal.  Based on these discussions, GVM
believes it will be in a good position to sell all the thermal coal it can
produce at Holfontein.  Strong domestic and export demand suggests a ready
market for the metallurgical coal.



Motjoli's 50% interest in the Baobab J.V. with Baobab Mining and Exploration ("
BME"), a wholly owned subsidiary of Petmin Ltd, consists of granted prospecting
rights over sixteen farms in the Soutpansberg / Mopane coal fields located
within the Limpopo Province in the north of South Africa.  These farms
intermingle with or adjoin farms held by Rio Tinto as part of their Chapudi
Project.  The total area of these farms is in excess of 23,000 Hectares,
bringing GVM's total interests in the Limpopo coalfields to approximately 32,000
Hectares.



The Soutpansberg Mopane Coalfield was extensively prospected by Iscor / Kumba
and others up until the early 1990's.  Based on open file reports available at
the South African Council for Geoscience, the Company is confident that with
further exploration resources on the farm will be greater than the 350 million
inferred tonne resource at Limpopo stated in the Competent Persons Report, also
on the Company's website.



On Cavan, one of the farms acquired, coal seams are reported at averaging 22
metres. At Voorburg, there is a reported non JORC / SAMREC compliant resource of
nearly 400 million tonnes. The coal in the region is stated as having a sulphur
content of between 0.96% and 1.2% and the ash content as between 10% and 12%.



Simon Farrell, Managing Director or GVM said: "This is the most important step
we have made so far in becoming a significant coal producer in South Africa.  We
look forward to making further announcements regarding the development of the
projects in the near future."



Contacts:

Simon Farrell - GVM Metals Ltd
+ 61 417 985 383

Olly Cairns - Corporate Synergy Plc
+44 (0) 20 7448 4400

Leesa Peters / Abby Singleton - Conduit PR
+44 (0) 20 7429 6600 /6606






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