Elgin Resources Inc.

Jonpol Explorations Ltd.

March 07, 2005 12:07 ET

Elgin Resources Inc. and Jonpol Explorations Ltd.: B.E.E. Consortium Led by Afriminerals Holdings to Acquire 26% Interest in Spitzkop Platinum Ltd.


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ELGIN RESOURCES INC.

TSX SYMBOL: ELR

AND JONPOL EXPLORATIONS LTD.

TSX SYMBOL: JON

MARCH 7, 2005 - 12:07 ET

Elgin Resources Inc. and Jonpol Explorations Ltd.:
B.E.E. Consortium Led by Afriminerals Holdings to
Acquire 26% Interest in Spitzkop Platinum Ltd.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 7, 2005) - Elgin
Resources Inc. (TSX:ELR) and Jonpol Explorations Ltd. (TSX:JON)

Mr. Ian Rozier, President of Elgin Resources Inc. ("Elgin") and Mr.
Gordon Keep, President of Jonpol Explorations Ltd. ("Jonpol") are
pleased to report that a Black Economic Empowerment ("B.E.E.")
Consortium led by Mr. Zwelakhe Sisulu of Afriminerals Holdings (Pty)
Ltd. ("Afriminerals") has entered into an agreement to acquire a 26%
shareholding in Spitzkop Platinum Ltd. ("Spitzplats"), the Company's
joint venture partner in South Africa. The B.E.E. consortium includes
companies and organizations representing Historically Disadvantaged
South Africans (HDSA's).

Under the terms of previously reported transactions the Company entered
into a 50:50 joint venture with Spitzplats whereby the Company will
finance further exploration and development of the Spitzkop Platinum
Group Metal ("PGM") Project through to Feasibility. In a related
transaction, Jonpol Exploration Ltd. ("Jonpol") entered into an
agreement to purchase a 74% interest in Spitzplats from the Spitzkop
Syndicate, and the Company and Jonpol have agreed to amalgamate (see
news release dated November 1, 2004).

The South African Minerals and Petroleum Resources Development Act 28 of
2002 became effective on May 1st, 2004. The Act requires the companies
holding existing old order mining rights apply for conversion to new
order mining rights within a period of five years. One of the most
significant prerequisites for this conversion is the participation by
HDSA's in the equity of the operating company. As part of the Act and
the Broad Based Socio-Economic Empowerment Charter, it is a requirement
that there be an equity participation by a B.E.E. Group in the South
African entity that owns the mineral rights of at least 15% within 5
years, and at least 26% within 10 years. Current South African Foreign
Policy exchange regulations do not permit the issue of shares in foreign
corporations such as Elgin to South African residents for long term
investment, hence the B.E.E. transaction must commence in South Africa.

As a result of the purchase of the 26% interest in Spitzplats by
Afriminerals, Spitzplats will have achieved full equity compliance
within the Charter. On completion of all the transactions involving the
Company, Jonpol and Spitzplats, the amalgamated company, Eastern
Platinum Ltd. ("Eastplats"), will have a 50:50 joint venture interest in
the project as well as a 74% interest in Spitzplats. This will result in
Eastplats having a direct and indirect interest in Spitzkop of 87%. The
full B.E.E. equity compliance of Spitzplats at this early stage of
corporate development places the Company in good standing going forward
with its plans to develop Spitzkop in a timely manner.

The Chairman of Afriminerals, the lead partner in the B.E.E. Consortium,
is Mr. Zwelakhe Sisulu, a South African national educated in Swaziland
and Soweto, and later at the INSEAD Institute in Paris and as a Nieman
Fellow at Harvard University. Mr. Sisulu commenced his career as a
journalist in South Africa in the 1970s. A notable political
correspondent, his writings and political activities led him to be
placed under house arrest during the apartheid era, later returning to
work as the editor of the New Nation Newspaper. In 1994 he joined South
African Broadcasting Corporation as CEO. Mr. Sisulu's current business
interests include mining and energy, media, telecommunications and
manufacturing. He is currently Chairman of Savannah Resources (Pty)
Ltd., Dirleton Minerals & Energy (Pty) Ltd., and Executive Chairman of
Afrimineral Holdings (Pty) Ltd. and Universal Media (Pty) Ltd. As
Chairman of Savannah Resources (Pty) Ltd., Mr. Sisulu was the lead
partner in the Savannah Consortium that recently completed the
acquisition of a 29.5% interest in Aquarius Platinum (South Africa)
involving an equity contribution of approximately US$132 million. Mr.
Sisulu was recently appointed to the Board of Directors of Aquarius
Platinum Limited, an extremely successful South African PGM producer.

The B.E.E. consortium led by Mr. Sisulu also includes the Dithamaga
Trust which represents the interests of the local community in the
Steelport area of Mpumalanga Province where the Spitzkop PGM project is
located. The Company's B.E.E. partners have the requisite corporate
skills, political and industry relationships and local knowledge
necessary to develop a successful company in the South African PGM
sector. Spitzplats is now in a position to actively seek further growth
opportunities in the PGM sector that will benefit all parties involved
in the joint venture.

"We are extremely encouraged by the participation of Zwelakhe Sisulu
leading the B.E.E. consortium on Spitzkop. As a newly empowered company,
Spitzplats is an excellent example to the international investment
community of how a successful B.E.E./Foreign partnership can be created
in South Africa," commented Ian Rozier, President and CEO of Elgin.
"Elgin looks forward to working with Afriminerals and the Dithamaga
Trust on the rapid development of the high grade Spitzkop PGM project."

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Vanguard Shareholder Solutions Inc.
    (604) 608-0824 or Toll Free: 1-866-801-0779
    or
    Harbour Financial Inc.
    Brian Barbour
    (403) 813-5832
    or
    Harbour Financial Inc.
    Tom Hart
    (403) 701-4278
    or
    Elgin Resources Inc.
    Mr. Ian Rozier, M.Sc., P. Eng.
    President
    (604) 685-6851
    (604) 685-6493 (FAX)
    www.elginresources.com
    or
    Jonpol Explorations Ltd.
    Mr. Gordon Keep
    President
    (604) 609-6110
    (604) 609-6145 (FAX)