Platimun Diversified Mining Inc. announces Acquisition
Cayman Islands -- (MARKET WIRE) -- October 23, 2006 --
23 October 2006
Platinum Diversified Mining, Inc
('Platinum' or 'the Company')
Proposed Acquisition of Nord Resources Corporation
Notice of Extraordinary General Meeting
Platinum, a Special Purpose Acquisition Corporation ("SPAC") formed to make
investments in the mining industry and listed on AIM in March 2006, today
announces the proposed acquisition of Nord Resources Corporation ("Nord"), a
company whose principal asset is Johnson Camp, an historic oxide copper mining
operation located in Arizona. Nord's shares have traded on the Pink Sheets LLC
since 31 May 2001 (NRDS.PK). Under US law this acquisition is by way of a
merger.
Acquisition Details
- Platinum announces today that it has conditionally agreed to acquire
Nord through a wholly-owned subsidiary of Platinum
- Nord is a Delaware corporation which owns Johnson Camp, an open pit
oxide copper mine near Tucson, Arizona, USA
- Johnson Camp has estimated proven and probable mining reserves of 35.1
million tons of ore at a grade of 0.393% total copper (TCu) when optimized
at a copper price of $0.90 per pound
- First production under Platinum management is targeted for early 2007
for annual copper production of approximately 25 million pounds at an
estimated cash operating cost of US$0.60 per pound of copper produced
- Existing proven and probable reserves are projected to support a 10-year
mine life for copper production of approximately 225 million pounds of
copper cathode
- Total geologic resources calculated at US$0.90 per pound of copper are
approximately 136 million tons at a grade of 0.37% TCu indicating contained
resources approximating one billion pounds of contained copper
- Platinum's management believe that significant amounts of the resource
can be converted to mineable reserves when a new computer model is
constructed and optimized at current copper price levels
- In addition, Platinum's management believe there exists significant
potential for additional discoveries in the form of extensions and step outs
from recognized resources
- Considering the potential for conversion of resources to reserves alone,
and not including any new discoveries, Platinum's management believes there
are good possibilities for both increasing annual throughput as well as
extending the mine life
- Nord also holds options on three exploration-stage properties elsewhere
in the greater Arizona-New Mexico porphyry copper province. One of these,
Coyote Springs at Safford, Arizona, is adjacent to and on the same geologic
trend as Phelps Dodge's Dos Pobres project, a large copper mine currently
being developed.
Acquisition Financing
- At listing the Company raised approximately US$77.9 million, net of fees
and expenses, to fund acquisitions and costs
- The cost of the acquisition will be US$60 million, subject to certain
net asset adjustments, which will be used to acquire 100% of Nord shares and
to repay Nord's corporate debt and certain of Nord's costs of the
transaction, up to a total of $1.085 million, to be satisfied from the
Company's existing cash resources
- The capital cost to reopen the mine and install facilities to improve
copper recovery and resume mining at Johnson Camp is estimated at US$21
million
- Platinum plans to acquire Nord with existing funds and has offer letters
for bank financing sufficient to fund the startup capital and working
capital required to bring Johnson Camp to full production.
Shareholder Approval
- The Acquisition constitutes a reverse takeover pursuant to the AIM Rules
and is therefore subject to Shareholder approval which will be sought at the
EGM. The Company will today publish an admission document containing further
details of the Acquisition and giving notice of the EGM to be held on 27
November 2006. The Acquisition is also subject to Nord Shareholder approval
- A conditional application will be made to the London Stock Exchange for
admission to trading on AIM of the Shares and Warrants
- Admission is conditional, inter alia, on the passing of Resolution at
the EGM approving the Merger Agreement and the approval of Merger Agreement
and the Acquisition by the shareholders of Nord at an extraordinary meeting
of the shareholders of Nord.
Mark Nordlicht, Executive Chairman of Platinum Diversified Mining, Inc.,
commented:
"The Board and management of Platinum strongly believe that the Nord acquisition
represents an outstanding opportunity for the Company's shareholders. The Nord
assets, particularly the Johnson Camp, are the ideal base from which to grow
Platinum into a significant, international mining company.
"Our intention is to build the resource at Johnson Camp through an intensive
exploration program at the property as well as a focused effort at assembling
the known data onto computer-aided modeling software. We expect this work will
result in a substantial increase in resources at the property.
"The Nord acquisition demonstrates our belief that high quality mineral assets
with short lead times to production are still available, despite the prevailing
high commodity prices."
FOR FURTHER INFORMATION, PLEASE CONTACT:
Platinum Diversified Mining KBC Peel Hunt Limited Pelham Public Relations
Tel. +1 520 360 7996 Tel. +44 (0)20 7418 8900 Tel. +44 (0)20 7743 6670
Archie Berens
Bobby Cooper Matt Goode Alisdair Haythornthwaite
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