PERTH, Australia, July 31, 2013 /CNW/ - Elemental Minerals Ltd. (ASX, TSX: ELM) ("Elemental" or "the Company") is pleased to provide the following quarterly update for activities
at its Sintoukola Potash Project located in the Republic of Congo ("RoC").
Dingyi Group Investment Limited ("Dingyi") to make an all cash off-market takeover offer for 100% of the fully
paid ordinary shares of Elemental at A$0.66 per share.
Dingyi to subscribe for A$5 million of Elemental shares and provide
Elemental with additional financing of up to A$15 million through a
secured convertible loan facility (subject to shareholder approval).
Receipt of a large database of historic mining and exploration data for
Land rezoning and compensation process underway
Continued modularisation studies with AMEC in preparation of the start
of the Bankable Feasibility Study
Completed brine dispersion modeling which confirmed the feasibility of
the proposed solution from an environmental impact perspective
A 12-month metocean survey was completed
A geotechnical report on the process plant foundation design was
completed by AMEC.
Post-quarter Operational Activities:
Continued land rezoning and compensation process
Engagement with regulators in support of the Congolese Environmental and
Social Impact Assessment (ESIA)
Preparation of submission of the International Environmental and Social
Impact Assessment (ESIA)
On 1 July 2013, Elemental announced that it had executed a bid
implementation agreement with Dingyi ("Bid Implementation Agreement") under which Dingyi will make an off-market takeover offer for 100% of
the fully paid ordinary shares of Elemental ("Dingyi Offer").
The Dingyi Offer price is A$0.66 per Elemental share, valuing Elemental
at approximately A$190 million and represents a 126% premium to the
volume weighted average price per Elemental share over the 20 trading
days prior to the announcement in relation to the Dingyi Offer made on
12 April 2013.
A majority of Elemental directors have recommended that shareholders
accept the Dingyi Offer unless a superior proposal emerges or the
Dingyi shareholder approval condition has not been satisfied by the
The Dingyi Offer is subject to a number of conditions (including Dingyi
acquiring at least 50.1% of Elemental's shares and Dingyi shareholder
approval requiring certain confirmations from the Hong Kong Stock
Exchange ("SEHK")) but importantly is not conditional upon finance, or Chinese
regulatory or Foreign Investment Review Board approvals.
The independent expert engaged by Elemental, BDO Corporate Finance ("Independent Expert"), has confirmed that in its view the Dingyi Offer is fair and
reasonable to Elemental shareholders in the absence of a superior
Further details of the Dingyi Offer and the Bid Implementation Agreement
are outlined in Elemental's announcement on 1 July 2013. Further
information supporting the Independent Expert's conclusions are set out
in the Independent Expert's Report also released by Elemental on 1 July
Interim Funding from Dingyi
In connection with the announcement of the Dingyi Offer, Elemental
announced on 1 July 2013 that Dingyi had agreed to subscribe for A$5
million of Elemental shares at an issue price of A$0.3407 per share ("Subscription Shares") and also provide Elemental with additional financing of up to A$15
million through a secured convertible loan facility to provide working
capital during the bid period (the "Convertible Note Facility").
The issue of the Subscription Shares is subject to the satisfaction of
certain conditions including shareholder approval under the ASX Listing
Rules. On 10 July 2013, Elemental released and despatched to
shareholders notice of an Extraordinary General Meeting of shareholders
to be held on 14 August 2013 to seek (amongst other things) shareholder
approval to issue the Subscription Shares.
Drawdown under the Convertible Note Facility is also subject to a number
of conditions, including Elemental shareholder approval as well as
agreeing final security documentation and a budget for use of funds
advanced. The Board will convene a shareholders meeting at a later date
to approve the Convertible Note Facility if it is considered likely to
need to draw on the facility.
Further details of the interim funding provided by Dingyi in connection
with the Dingyi Offer is outlined in Elemental's announcement on 1 July
2013 and Elemental's Notice of General Meeting and Explanatory
Statement announced on 10 July 2013.
Geology and Mineral Resources
Elemental has secured a large historic database detailing exploration
and mining activities in RoC by Potasse d'Alsace from the 1960's to the
late 1980's. Elemental now has significant volume of data for historic
boreholes within the Sintoukola Permit including additional data at
Kola and at the Dougou Prospect. The dataset also includes a further
310 line kilometres of 2D seismic data from both oil and potash
exploration in the late 1980's over Kola and Dougou (Figure 1)
This data will assist with target generation and future exploration
across the Sintoukola licence including resource delineation on and
around the Kola deposit.
Bankable Feasibility Study (BFS)
A 12-month metocean survey was completed during this quarter. The data
will define meteorological and oceanographic conditions to be used in
the brine discharge modeling and design of the marine facilities and
will be included in the ESIA submission.
A plant modularisation study is currently being conducted by AMEC and is
expected to be completed in July 2013. The purpose of this study is to
investigate opportunities to apply a modularised construction strategy
on the process plant to optimize the construction schedule.
A geotechnical foundation report was finalized by AMEC for the process
plant buildings. The report identified a number of foundation design
options based on the results of the geotechnical campaign completed at
the end of 2012. These alternatives will be economically evaluated
early in the BFS to make a final recommendation for the detailed
A final phase of brine dispersion modeling using a three-dimensional
time-varying hydrodynamic model and realistic time-varying ambient
metocean scenarios was completed. The results, which improve on the
accuracy of the two-dimensional modeling conducted during the PFS,
highlighted the need for additional on-shore dilution of the brine as
well as an increase in the discharge pipe length. The modeling results
confirmed that, given these proposed changes to the outfall design, the
required volumes of brine will be discharged within the agreed design
Investigations are ongoing to optimise the gas off-take location to
reduce initial capital requirements associated with the gas pipeline.
A land commission was established in cooperation with the Ministry of
Land Affaires. This commission facilitated the successful survey of the
land corridor required by the project by the cadastral office of the
Republic of Congo. A DUP (Dècret d'Utilité Publique) was gazetted on
21st February 2013 for phase 1 (process plant, employee facilities,
residue storage facility, mine site, and transport corridor). The plot
enquiry process to determine compensation values was completed by the
commission and Elemental is currently awaiting the results thereof.
The review of the national ESIA by the Congolese Authorities was
completed and all comments incorporated. Elemental is currently in the
process of resubmitting the final version for approval.
About Elemental Minerals
Elemental Minerals Limited (ASX/TSX: ELM) is an advanced mineral
exploration and development company that aims to grow shareholder value
through its 93%-owned Sintoukola Potash Project. The Sintoukola project
has the potential to be among the world's lowest-cost potash producers
and its strategic location near the coast of central Africa offers a
transport cost advantage to key Brazilian and Asian fertilizer markets.
For more information, visit www.elementalminerals.com
Mineral Resource Summary - Kola Deposit of Sintoukola Project1
The Sintoukola Project's Kola deposit contains 1.32 billion tonnes
Measured and Indicated mineral resources with an average grade of
15.65% K2O (24.78% KCl), and Inferred Mineral Resources of 948 Mt grading 16.20%
K2O (25.64% KCl), at a 10.0% K2O cut-off grade.
Within the Mineral Resources, the sylvinite portion contains 573Mt with
an average grade of 20.92% K2O (33.13% KCl) within the Measured and Indicated category and 475Mt of
Inferred Mineral Resources grading 20.39% K2O (32.27% KCl).
Four main potash mineralised seams are present within the Kola deposit
and are identified in stratigraphic and chronological order as:
Hangingwall Seam (HWS), Upper Seam (US), Lower Seam (LS), and the
Footwall Seam (FWS). The depth to the top of the Upper Seam is within
250 to 320 metres from surface.
Exploration at Kola has focused on the Upper Seam and Lower Seams which
contain the bulk of the Mineral Resources defined to date. The
Hangingwall Seam was discovered in September 2012 and contributes 47Mt
at an average grade of 34.75% K2O (55.01% KCl) to the Inferred Mineral Resources, and the Footwall Seam
225Mt grading 17.63% K2O (27.92% KCl) also in the Inferred category.
The Mineral Resources are reported in accordance with the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves 2004 Edition (The JORC Code), which is consistent with
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition
Standards 2005 and hence complies with NI 43-101.
Competent Person / Qualified Person Statement:
Information in this report that relates to Exploration Results or
Mineral Resources is based on information compiled by Dr. Simon
Dorling, Mr. Jeff Elliott and Dr. Andrew Scogings of CSA Global Pty
Ltd, the Company's geological consultants. Dr. Dorling, Mr. Elliott and
Dr. Scogings are members of the Australian Institute of Geoscientists
(MAIG) and have sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity they are undertaking to qualify as a Competent Person as
defined in the 2004 Edition of the "Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves" (the JORC
Code). Dr. Dorling, Mr. Elliott and Dr. Scogings are also Qualified
Persons for the purposes of Canadian National Instrument 43-101 and
they consent to the inclusion in this report of the information, in the
form and context in which it appears. Mr. Elliott and Dr. Dorling have
verified the exploration data disclosed in this news release.
Further information with respect to Elemental's Sintoukola Project is
contained in a technical report entitled ''NI 43-101 Technical Report,
Sintoukola Potash Project, Republic of Congo'' prepared for the Company
by SRK Consulting (U.S.), Inc., CSA Global Pty Ltd., EGIS International
and AMEC Americas, dated September 17, 2012 with an effective date of
September 17, 2012 (the "Technical Report"). The Technical Report can
be accessed on the Company's profile on SEDAR.
This report contains statements that are "forward-looking". Generally,
the words "expect," "potential", "intend," "estimate," "will" and
similar expressions identify forward-looking statements. By their very
nature, forward-looking statements are subject to known and unknown
risks and uncertainties that may cause our actual results, performance
or achievements, to differ materially from those expressed or implied
in any of our forward-looking statements, which are not guarantees of
future performance. Statements in this news release regarding the
Company's business or proposed business, which are not historical
facts, are "forward looking" statements that involve risks and
uncertainties, such as resource estimates and statements that describe
the Company's future plans, objectives or goals, including words to the
effect that the Company or management expects a stated condition or
result to occur. Since forward-looking statements address future events
and conditions, by their very nature, they involve inherent risks and
uncertainties. Actual results in each case could differ materially from
those currently anticipated in such statements.
Investors are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made.
1 For a full description of the resource refer to the NI 43-101 Technical
Report, 17 September 2012 available on SEDAR, www.sedar.com
Image with caption: "Figure 1. Map showing Kola and Dougou and all boreholes and seismic data. The lines marked in blue are part of the recently acquired historic dataset. The historic boreholes are marked in red. (CNW Group/Elemental Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20130731_C2732_PHOTO_EN_29423.jpg
SOURCE: Elemental Minerals Limited
For further information:
Chief Executive Officer
Tel: +27 (0) 76 238 4461
Investor Relations Manager
Tel: +27 (0) 83 604 0820
Johannesburg Office: +27 11 469 9140