Balloch Resources Ltd.
TSX VENTURE : BAH

September 21, 2005 12:27 ET

Balloch Resources Announces Progress at Kamoto

TORONTO, ONTARIO--(CCNMatthews - Sept. 21, 2005) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Further to its press release dated August 2, 2005, Balloch Resources Ltd. (TSX VENTURE:BAH) provided an update today with respect to its previously announced option to purchase 100% of Kinross Forrest Ltd. ("KFL"). KFL owns a 75% interest in the Kamoto joint venture (the "Kamoto JV"). La Generale des Carrieres et des Mines ("Gecamines"), the state owned and operated mining enterprise of the Democratic Republic of Congo (the "DRC") owns the remaining 25% interest in the Kamoto JV.

The Kamoto JV comprises a large tonnage world class low cost "brownfields" copper asset in the DRC. From 1969 to 1993, the assets which comprise the Kamoto JV produced significant amounts of both copper and cobalt with copper cash costs (net of cobalt by-product credits) in the lowest cost quartile of copper costs worldwide. The Kamoto JV is not currently in production.

The political situation in the DRC has improved significantly over the past few years. Political improvements include the withdrawal of foreign troops, constitutional changes and an appointed government that has acted to create a more stable environment for the support of economic and social reunification. Since 2001, the World Bank has approved a total of US$3.37 billion in loans and credits for the DRC.

Balloch management plans to take advantage of the improved political and business environment which has occurred in the DRC and hopes to utilize the extensive Kamoto JV infrastructure and resources and advance the Kamoto JV copper assets towards a production decision. Based on Gecamines data, the total resource estimate as of 1999 within the Kamoto JV property was 349 million tonnes grading 3.99% copper and 0.34% cobalt at the Kamoto JV. In 2003, Hatch, using historic resource estimates developed a 20-year mine plan that anticipated mining of 91.6 million tonnes grading 3.93% copper and 0.35% cobalt which would produce 150,000 tonnes of copper and 5,700 tonnes of cobalt per annum. This information, in Balloch's opinion, is relevant, reliable and the most recent available. However, Balloch advises that this information has not been verified in detail and there is no certainty that any economic resources will exist on the Kamoto JV property, and the historical resource estimates use resource categories that do not conform to current National Instrument 43-101 standards. Initial capital expenditures relating to mine development and rehabilitation of existing mine infrastructure were estimated in the 2003 study completed by Hatch at approximately US$91 million. Balloch anticipates that the scope of work could approximate US$125 million in today's costs. Management believes that there is significant potential at the Kamoto JV and a group of consulting firms including Hatch Group, McIntosh RSV LLC, and SRK Consulting have been retained to conduct a feasibility study which will provide for a National Instrument 43-101 compliant reserve and resource estimate, operating plan and updated capital and operating costs and mine plan.

The 2003 study completed by Hatch, concluded that steady state production of 150,000 tonnes copper and 5,700 tonnes cobalt should be achievable in 64 months. The study also concluded that less than 27% of the Gecamines historical resource estimates would be utilized in the 20 year mine plan.

The Company is currently in the process of completing a National Instrument 43-101 technical report in connection with a previously announced financing. The proceeds of the contemplated equity offering will be partly used to conduct a feasibility study to validate the potential of re-starting the operations as well as the development of new resource and reserve estimates.

Rick Dye, the Vice President, Technical Services of KFL and a qualified person under National Instrument 43-101, has reviewed and approved the contents of this press release.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Balloch Resources Ltd.
    Thomas Pladsen
    President and CEO
    (647) 287-3778