Wits Basin Signs Letter of Intent to Acquire Minerals Exploration Company Located in South America
MINNEAPOLIS--(BUSINESS WIRE)--Dec. 23, 2003--Wits Basin Precious Minerals Inc., (WITM - news) is pleased to announce that we have entered into a letter of intent to acquire all of the outstanding shares of capital stock of Brazmin Ltda., ("Brazmin") a limited liability company located in Rio de Janeiro, Brazil, subject to the completion of a due diligence review. In exchange for 100% of the outstanding capital stock of Brazmin, we will pay US$50,000 in cash; issue 700,000 shares of its common stock; issue a 5-year warrant to purchase 150,000 shares of its common stock, at the greater of market price or $1.50 per share at the time of closing; reimbursement of out-of-pocket expenses incurred by the seller; and consummation of 2 consulting agreements with the officers of the seller on terms yet to be finalized.
Brazmin's current property portfolio consists of 2 assets, which are promising precious minerals projects in Brazil, having been assembled through very specific selection criteria. Since its incorporation in April 2001, Brazmin has analysed over 150 gold projects in Brazil, of which, only a fraction have been targeted for acquisition and thereby achieving success with the majority of its targeted projects. Mr. Luis Azevedo, a principal of Brazmin, is well respected in the mining industry of Brazil and will continue to evaluate other high-quality projects in the region. The current portfolio has been vetted by a team of highly regarded independent technical consultants to Brazmin.
Brazil
Rio Maria Property - Para, Brazil
-- Located in the highly prospective Carajas district of Brazil, this 27,431 ha (approximately 67,900 acres) property was acquired from Canyon Resources in 2001 after they spent US$2.0 million defining gold targets prior to withdrawing from Brazil after the Bre-X Minerals Ltd. gold scandal.
-- The property has easy access, being approximately 20 km from the town of Rio Maria, which is connected by paved highway to the state capital of Belem. The geology of the Rio Maria Property is dominated by the highly prospective Andorinhas Greenstone Belt.
-- An estimated 15 tonnes (500,000 ounces) of gold have been produced by information miners (garimpeiros) from alluvial and bedrock gold deposits within and adjacent to the Rio Maria property.
-- Exploration work of the prior operators was focused for gold with no assays carried out for base metals. This work identified several high quality potential targets for gold, which requires additional exploration.
-- While there is potential for gold related to shear zones cutting greenstone rocks, the property has significant appeal due to its potential for large copper - gold mineralized systems similar to those found elsewhere in the Carajas district.
Campo Grande, Brazil
-- Campo Grande is an early stage exploration project formerly owned by Barrick and Western Mining Corporation. The previous owners spent a total of US$100,000 on the property. Brazmin has very recently successfully claimed 75% of the land title directly and the remaining 25% though an option with a group of Brazilian geologist having title. According to Brazmin's consultants, Campo Grande may be substantial and should be relatively easy to test for ore-grade mineralization and would provide a project with good upside potential.
Other Projects
-- Three other Brazilian exploration projects are being evaluated at this time, and should they possess the required technical integrity, Brazmin should be in a position to acquire them as well.
Update to our FSC Project in South Africa
The current range-finding drilling program on the FSC joint venture Project in South Africa is progressing and we have been advised by the operator, AfriOre Limited, that the drill hole is at 725 meters. The target depth of this hole is estimated to be 2000 meters and is the first of an initial three drill-hole program.
The initial program is anticipated to include some 6,200 meters of drilling and is aimed at establishing the presence of stratigraphic units related to Witwatersrand gold deposits, in the depth range of 1,200 to 1,500 meters. Previous drilling and geophysical mapping indicate that Witwatersrand rocks may be preserved under Mesozoic cover rocks in the project area.
About Wits Basin Precious Minerals Inc.
Wits Basin (WITM - news) is actively participating in a joint venture for the exploration of gold in the Republic of South Africa whereby it has the right to earn a 35% equity interest in the FSC project by advancing US$2.1 million (US$1.8 million has already been advanced) and has the right to earn an additional 15% by advancing an additional US$1.4 million. Wits Basin is headquartered in Minneapolis, MN with offices in Toronto, ON.
Forward-Looking Statements
Except for historical information contained herein, this news release also includes forward-looking statements. All statements regarding potential mineralization and reserves, exploration results and future objectives of ours, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. We are under no obligation to, and expressly disclaim any such obligation to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.
Risk Factors
The exploration for and development of mineral deposits involves significant financial risks, which even experience and knowledge may not eliminate, regardless of the amount of careful evaluation applied to a process. While the discovery of a mineral deposit may result in substantial rewards, few properties are ultimately developed into producing mines. Moreover, we cannot make any estimates regarding probable reserves and mineral resources in connection with any of our projects. Therefore, no assurance can be given that any size of reserves or grades of reserves will be realized. If a discovery is made, the mineral deposit discovered, and if recoverable, may differ from the reserves and mineral resources already discovered and recovered by others in the same region of the planned areas of exploration. The risks are numerous, therefore, detailed information may be found in filings by us with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and reports on Form 8-K.
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