Eastern Platinum Limited
TSX : ELR
AIM : ELR

Eastern Platinum Limited

August 22, 2006 09:00 ET

Eastplats Acquires 49% Interest in Afriminerals

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 22, 2006) -

NOT FOR DISSEMINATION IN THE USA

Mr. Ian Rozier, President of Eastern Platinum Limited (the "Company") (TSX:ELR)(AIM:ELR), is pleased to report that through a series of transactions, the Company has acquired a 49% interest in South African, Black Economic Empowerment ("BEE") company, Afriminerals (Pty) Ltd.

Afriminerals has a 26% shareholding in Spitzkop Platinum (Pty) Ltd. ("Spitzplats"), and is the Company's joint venture partner in South Africa on the Spitzkop Platinum project that is currently undergoing its final feasibility study. The balance of the shares in Afriminerals are owned by a consortium that includes companies and organizations representing Historically Disadvantaged South Africans ("HDSA's"). Under a series of agreements that comprise a Share Purchase Agreement, a Subscription Agreement, and a Shareholder Agreement the Company is acquiring a 49% shareholding in Afriminerals, and Afriminerals is to remain a qualified empowerment company, as defined under South Africa legislation, controlled by the HDSA's. Importantly, the BEE Consortium includes the Dithamaga Trust, which represents the interests of the local community in the Steelport area of Mpumalanga Province where the Spitzkop project is located.

The total consideration paid to acquire the 49% shareholding in Afriminerals is US$5,500,000 and 3,000,000 shares of the Company, with US$5,000,000 and the shares being paid to the Spitzkop consortium in order to retire the debt owed to them by Afriminerals for its 26% interest in Spitzplats. Upon completion of the transaction, Afriminerals will own its 26% shareholding in Spitzplats free and clear with no debts and/or obligations. As part of the overall transaction the Company has an obligation to either finance, or organize, project financing for Afriminerals for its share of capital costs for the development of the mine at Spitzkop, such financing will be repaid from the proceeds of initial production attributable to Afriminerals.

The South African Minerals and Petroleum Resources Development Act 28 of 2002 that became effective on May 1st, 2004 requires that companies holding existing old order mining rights apply for conversion to new order rights within a period of 5 years. Also, it is a requirement of the Act that there be equity participation by a B.E.E. controlled South African entity that owns the mineral rights of at least 15% by 2009 and 26% by 2014. Spitzplats has already been awarded new order rights for the Spitzkop project. Afriminerals owns a 26% interest in Spitzplats, and thus is already in full compliance with the final objectives of this section of the Act.

Afriminerals is controlled by a B.E.E. group led by Mr. Zwelakhe Sisulu. Mr. Sisulu's extensive business background and activities were documented in a Company News Release dated March 7th 2005. The Company's B.E.E. partners and controlling shareholders of Afriminerals have the requisite corporate skills, political and industry relationships, and local knowledge, necessary to develop a successful mining company in South Africa, and together with them, the Company is in a position to actively seek further growth opportunities in the PGM sector that will benefit all parties going forward.

"Afriminerals is delighted that the Dithamaga Trust, representing the local community is part of this transaction. The incorporation of the Dithamaga Trust is a very important part of the economic transformation of local interests in the minerals development arena in South Africa," said Mr. Zwelakhe Sisulu, Chairman of Afriminerals.

"We are very pleased to have put this transaction together with Afriminerals. As a fully empowered company, Spitzplats is an excellent example to the international investment community of how a successful B.E.E./Foreign partnership can be created and can work together in South Africa to build a successful mining company within the framework of the new Act," commented Ian Rozier, President of Eastern Platinum Limited.

Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties are detailed from time to time in the Corporation's filings with the appropriate securities regulatory authorities in Canada, which filings are available on SEDAR at www.sedar.com. This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in the United States.

Contact Information

  • Eastern Platinum Limited
    Mr. Ian Rozier, M.Sc., P. Eng.
    President
    (604) 685-6851
    (604) 685-6493 (FAX)
    www.eastplats.com