Anooraq Resources Corporation

Anooraq Resources Corporation

March 09, 2005 11:12 ET

Anooraq Resources Corporation: Preliminary Assessment Indicates Strong Returns for Development of Drenthe & Overysel North Platinum Group Metals Deposits




MARCH 9, 2005 - 11:12 ET

Anooraq Resources Corporation: Preliminary Assessment
Indicates Strong Returns for Development of Drenthe &
Overysel North Platinum Group Metals Deposits

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 9, 2005) - Anooraq
Resources Corporation (TSX VENTURE:ARQ)(AMEX:ANO) announces the results
of a preliminary economic assessment of the Drenthe and adjacent
Overysel North platinum group metals ("PGM") deposits. The Drenthe and
Overysel North deposits are being explored and developed under the
Boikgantsho Platinum Mine Joint Venture agreement ("Boikgantsho JV")
between Anooraq and Anglo American Platinum Corporation Limited ("Anglo
Platinum"). Anooraq is the operator of the joint venture. The
Boikgantsho JV property is located on the northern limb of the Bushveld
Complex, about 250 kilometres north of Johannesburg, South Africa.

The Preliminary Assessment is based on a conventional open pit mining
and milling operation with at 32 year mine life. Currencies used are US
dollars (US$) and South African Rand (ZAR), with a ZAR:US$ exchange
ratio of 7:1. At expected long term metal prices of US$650/oz for
platinum, US$250/oz for palladium, US$375/oz for gold, US$4.00/lb for
nickel and US$1.00/lb for copper used for the base case, the pre-tax and
pre-royalty economic model forecasts the net present value ("NPV") of
the project at a 5% discount rate of US$300.5 million and at 10%
discount is US$138.8 million with an internal rate of return ("IRR") of
25%. The estimated capital cost is US$152.8 million with a payback of 3
1/4 years.

At current metal prices of US$850/oz for Pt, US$180/oz for Pd, US$400/oz
for Au, US$6.60/lb for Ni and US$1.40 for Cu, and an exchange rate of
6:1, the economics for the project are even more robust. The NPV at a 5%
discount rate is US$576.7 million and at 10% discount is US$293.3
million with an IRR of 35%.

The Preliminary Assessment is based on indicated and inferred mineral
resources outlined to mid September 2004 in the Drenthe and Overysel
North deposits. Mineral resources for these deposits at a US$20 gross
metal value per tonne cut-off were announced in a news release on
November 22, 2004; however, the current study indicates favourable
financial results using a cut-off grade of approximately US$10.50 per
tonne. As the Preliminary Assessment is based, in part, on inferred
resources that are geologically speculative, there is no certainty that
the economic considerations or results will be realized.

The mine plan for the study encompasses operations in two main pit areas
on the Drenthe and Overysel North deposits. The northern pit area is
5,500 metres long and the smaller pit area is 2,000 metres long. The
maximum pit shell is 700 metres wide and 300 metres deep. Whittle 4D (an
open pit modelling software) was used to produce an economic pit shell
and outline total in-pit resources of 256 million tonnes grading 1.03
g/t 3PGM (0.43 g/t Pt, 0.52 g/t Pd, 0.08 g/t Au), 0.11% Ni and 0.07% Cu
at a US$10.50/tonne cut-off. This pit was then capped for a mine life of
32 years for the study, resulting in an in-pit resource of 160 million
tonnes grading 1.05 g/t 3PGM (0.44 g/t Pt, 0.53 g/t Pd, 0.08 g/t Au),
0.12% Ni and 0.08% Cu.

The mill feed rate for the Preliminary Assessment is 5 million tonnes
per year. The average head grade ranges from 1.1 to 1.4 g/t 3PGM in the
first five years of mining and 0.8 to 1.0 g/t in the last five years.
Metallurgical studies on core samples show good results for a
conventional mill circuit, comprising crushing, grinding and two-stage
flotation. From this work, the following head grade driven concentrator
recoveries were used in the study: platinum 75%, palladium 75%, gold
75%, copper 80% and nickel 75%.

Mining costs for the study are based on budget estimates provided by
South African mining contractors and processing costs are derived from
studies by Dowding Reynard & Associates, the Company's metallurgical
consultants in South Africa. Administrative and environmental costs are
based on estimates from contract submissions.

As operator, Anooraq is responsible for exploration and engineering
activities. This Preliminary Assessment has been conducted by in-house
and external independent qualified persons employed by Anooraq. Anglo
Platinum has not been involved in the preparation of the Preliminary
Assessment nor in the evaluation of the results thereof. The study uses
industry standard costs for all phases of the proposed development
including the smelting and refining, and makes assumptions about the
concentrate to be produced. Industry standard costs are also used in
estimates of the cost for socio-economic activities, i.e., community
involvement, relocation and other related issues, however, until there
are final agreements on these and related matters there is no assurance
that these costs will not change.

The key operating parameters and financial results from the study are
summarized in the following tables:

In-Pit Resources (constrained to 32-year pit)
Ore tonnes 160 million
Waste tonnes 274 million
Cut-off Grade GMV/t(i) Approx. 10.50
Strip Ratio Waste:ore 1.7:1
Milling rate t/yr 5 million
Average Grades (Life of Mine)
Pt g/t 0.44
Pd g/t 0.53
Au g/t 0.08
Ni kg/t 1.21
Cu kg/t 0.83
Metal Produced in Concentrate (Annually)
Pt oz 53,300
Pd oz 63,400
Au oz 9,900
Ni lbs 9,998,000
Cu lbs 7,250,000

(i) GMV/tonne is the sum of the grade multiplied by metal price,
using 75% recoveries for Pt, Pd, Au and Ni and 80% recovery for

Capital and Operating Costs

Capital Cost Summary
Mining Pre-production US$ 12.8 million
Plant and Infrastructure US$ 135.0 million
Socio-Economics US$ 5.0 million
Total US$ 152.8 million
Operating Cost Summary
Mining US$/t 3.84
Environmental/Reclamation US$/t 0.14
Processing US$/t 5.36
Administration US$/t 0.18
Total (milled) US$/t 9.52
Metal Prices
Platinum US$/oz 650
Palladium US$/oz 250
Gold US$/oz 375
Nickel US$/lb 4.00
Copper US$/lb 1.00
Foreign Exchange ZAR:US$ 7:1
Net Revenues US$/t milled 14.88
NPV(ii) - 5% discount US$ 300.5 million
NPV(ii) - 10% discount US$ 138.8 million
IRR(ii) 25%
Project payback 3 yr, 3 mo.
All-in cash costs per
Pt-eq oz in concentrate(iii) US$ 337
Net Cash flow - 32 years US$ 715.2 million

(ii) NPV and IRR are calculated on a pre-tax and royalty basis
(iii) Pt-equivalent ounces are calculated by converting all metal
values to a gross metal value, at the metal prices above, and
then dividing by the price of platinum.

The block model and mineral resource estimate that formed the basis for
the Preliminary Assessment was prepared by Geologix (Pty) Ltd., under
the direction of G.J. van der Heever, Pr.Sci.Nat., an independent
Qualified Person (QP) as defined under NI 43-101. The pit optimization
work and in-pit resource estimate was carried out by Thomas Tulp,
MAusIMM, of Hatch Australia, also an independent QP. A technical report
co-authored by in-house qualified person David Reeves, AusIMM, and
Messrs. Tulp and van der Heever will be filed on SEDAR.

Property Interests

The Drenthe and Overysel North deposits are being explored and developed
under the Boikgantsho Platinum Mine Joint Venture agreement ("JV")
between Anooraq and Anglo American Platinum Corporation Limited ("Anglo
Platinum"). Pursuant to the terms of the JV, Anooraq and Anglo Platinum
will form an initial 50/50 joint venture to explore Anooraq's Drenthe
and Witrivier farms and the northern portion of Anglo Platinum's
Overysel farm for a period of up to five years. During that period,
Anooraq will operate the exploration programs, and spend up to ZAR 12.35
million on behalf of the JV. Anooraq will then have the option to
proceed on a year-by-year basis and to take the project to a Bankable
Feasibility Study ("BFS").

Once the BFS has been completed, the parties, by agreement, may proceed
to exploitation subject to relevant regulatory requirements. If both
partners decide to proceed, then a joint management committee will be
established to oversee development and operations. At commencement of
exploitation, the Joint Venture interest allotted to each of Anooraq and
Anglo Platinum will be determined in proportion to the relative value of
the metals contained in each contributed property as reflected in the
BFS. However, at that time each party has the option to "top up" to
bring their interest to 50%. At this early stage, there has been no
assessment of the relative value of the metals in the ground contributed
by each of the parties.

Current Programs

The Boikgantsho JV project is located in a region of sparse water
resources but the Department of Water Affairs has already engaged a long
term plan to provide additional water supply. One part of the scheme is
due to come online in 2006, and the second in 2010. Planning to access
these resources will part of the pre-feasibility studies.

In the mining scenario used for the Preliminary Assessment, the open
pits were designed with pit walls at a nominal 42 degrees in the near
surface oxide and weathered zones, and 52-60 degree walls in the more
competent sulphide zones. Under the model used, all of the in-pit
material was mined but only the fresh sulphide (unweathered) material
was processed. Testing is underway on core samples to determine
metallurgical characteristics of the weathered material so that it can
be integrated into the mine processing plan.

There is also additional upside potential for the project. There is
excellent potential for milling and mining optimization using higher
throughputs, which would further enhance the project economics. The
mineral resource is open to the north, and down dip with potential for
additional resources to be outlined. Current metallurgical testwork
suggests that the recoveries used in this study may be conservative and
could increase. Other improvements, such as acid leaching of oxide
mineralization within the deposit to enhance recovery of base metals,
optimizing cut-off grades to produce a higher grade mill feed, and
geotechnical studies aimed at supporting steeper pit wall angles during
mining are being assessed in pre-feasibility programs that are currently
underway. Completion of the Pre-feasibility Study is expected in the
third quarter of 2005.

Also as part of pre-feasibility studies, the geological models and
mineral resource estimates are currently being updated with information
from drilling to December 2004. A 24,000-metre multi-rig drilling
program was initiated in January 2005, focusing on the Drenthe deposit.
Drilling is planned to proceed at 50-metre intervals along 50-metre
spaced lines in order to define measured mineral resources within the
deposit, and advance the project toward a feasibility study.

Information on Anooraq

Anooraq is actively engaged in the advancement of major platinum group
metals projects in the Bushveld Complex, the world's premier PGM
environment. In addition to attractive mineral holdings on the Northern
and Western Limbs of the Bushveld, the Company holds a 50% interest in
the advanced stage Ga-Phasha PGM project on the Eastern Limb. Anooraq is
a Black Economic Empowerment ("BEE") company that is also listed on
North American stock exchanges. This combination of significant PGM
assets, status as a BEE and direct access to financing opportunities on
North American and European markets, positions Anooraq to become a
leading PGM company.

For further details on Anooraq and its properties in South Africa, visit
the Company's website at or contact Investor
Services at (604) 684-6365 or in North America 1-800-667-2114 or view
Anooraq's Canadian public filings at or US public filings


Ronald W. Thiessen, President and CEO

Cautionary and Forward Looking Statement Information

All information contained in this press release relating to the contents
of the Preliminary Assessment, including but not limited to statements
of the project's potential and information under the headings
"Production Parameters," "Capital Costs, Sustaining Capital Costs, and
Operating Costs," "Production Summary," and "Financial Analyses," are
"forward looking statements" within the definition of the United States
Private Securities Litigation Reform Act of 1995. The Preliminary
Assessment was prepared to broadly quantify the project's capital and
operating cost parameters and to provide guidance on the type and scale
of future project engineering and development work that will be needed
to ultimately define the project's likelihood of feasibility and optimal
production rate. It was not prepared to be used as a valuation of the
project nor should it be considered to be a pre-feasibility study. The
capital and operating cost estimates which were used have been developed
only to an approximate order of magnitude based on generally understood
capital cost to production level relationships and they are not based on
any systematic engineering studies, so the ultimate costs may vary
widely from the amounts set out in the Preliminary Assessment. This
could materially and adversely impact the projected economics of the
project. As is normal at this stage of a project, data is incomplete and
estimates were developed based solely on the expertise of the
individuals involved as well as the assessments of other persons who
were involved with previous operators of the project. At this level of
engineering, the criteria, methods and estimates are very preliminary
and result in a high level of subjective judgment being employed.

The following are the principal risk factors and uncertainties which, in
management's opinion, are likely to most directly affect the conclusions
of the Preliminary Assessment and the ultimate feasibility of the
project. The mineralized material at the project is currently classified
as indicated and inferred resources and it is not reserves. The
mineralized material in the Preliminary Assessment is based only on the
resource model developed by Geologix (Pty) Ltd. in November 2004. That
model includes only assay information from drilling up to the middle of
September 2004. Considerable additional work, including in-fill
drilling, additional process tests, and other engineering and geologic
work will be required to determine if the mineralized material is an
economically exploitable reserve. There can be no assurance that this
mineralized material can become a reserve or that the amount may be
converted to a reserve or the grade thereof. Final feasibility work has
not been done to confirm the pit design, mining methods, and processing
methods assumed in the Preliminary Assessment. Final feasibility could
determine that the assumed pit design, mining methods, and processing
methods are not correct. Construction and operation of the mine and
processing facilities depends on securing environmental and other
permits on a timely basis.
No permits have been applied for and there can be no assurance that
required permits can be secured or secured on a timely basis. Data is
incomplete and cost estimates have been developed in part based on the
expertise of the individuals participating in the preparation of the
Preliminary Assessment and on costs at projects believed to be
comparable, and not based on firm price quotes. Costs, including design,
procurement, construction, and on-going operating costs and metal
recoveries could be materially different from those contained in the
Preliminary Assessment. There can be no assurance that mining can be
conducted at the rates and grades assumed in the Preliminary Assessment.
The Preliminary Assessment assumes specified, long-term prices levels
for platinum, palladium, gold, copper and nickel. Prices for these
commodities are historically volatile, and Anooraq has no control of or
influence on those prices, all of which are determined in international
markets. There can be no assurance that the prices of these commodities
will continue at current levels or that they will not decline below the
prices assumed in the Preliminary Assessment. Prices for platinum,
palladium, gold, copper and nickel have been below the price ranges
assumed in Preliminary Assessment at times during the past ten years,
and for extended periods of time. The project will require major
financing, probably a combination of debt and equity financing. Interest
rates are at historically low levels. There can be no assurance that
debt and/or equity financing will be available on acceptable terms. A
significant increase in costs of capital could materially and adversely
affect the value and feasibility of constructing the project. Other
general risks include those ordinary to very large construction projects
including the general uncertainties inherent in engineering and
construction cost, the need to comply with generally increasing
environmental obligations, and accommodation of local and community

Caution About the Use of Indicated and Inferred Resources

This news release uses the terms 'indicated resources' and 'inferred
resources'. Anooraq advises investors that although these terms are
recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects), the
U.S. Securities and Exchange Commission does not recognize them.
Investors are cautioned not to assume that any part or all of the
mineral deposits in these categories will ever be converted into
reserves. In addition, 'inferred resources' have a great amount of
uncertainty as to their existence, and economic and legal feasibility.
It cannot be assumed that all or any part of an Inferred Mineral
Resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of Inferred Mineral Resources may not form the basis of
feasibility or pre-feasibility studies, or economic studies except for
Preliminary Assessment as defined under 43-101. Investors are cautioned
not to assume that part or all of an inferred resource exists, or is
economically or legally mineable.


Contact Information

    Anooraq Resources Corporation
    Investor Services
    (604) 684-6365 or in North America 1-800-667-2114
    (604) 684-8092 (FAX)
    Neither the TSX Venture Exchange nor any other regulatory authority
    accepts responsibility for the adequacy or accuracy of this release.