PAMLICO AGREES TO ACQUIRE RUSSIAN ABRASIVE MINERALS COMPANY
PAMLICO RESOURCES LTD.
Suite 406 - 535 Howe Street
Vancouver, British Columbia
V6C 2Z4
Telephone: (604) 688-9517
Fax: (604) 688-9726
E-mail: info@pamlicoresources.com
Web site: www.pamlicoresources.com
May 20, 1998 Trading Symbol: PGP
PAMLICO AGREES TO ACQUIRE RUSSIAN ABRASIVE MINERALS COMPANY
Pamlico Resources Ltd. announced today that subject to regulatory approval, it has entered into an agreement to acquire Abrasiv Ltd., a Russian company specializing in the processing and sale of abrasive materials and holder of a licence to exploit coastal and marine placer garnets in the White Sea region of Russia, including a 700 kilometre stretch of coastline in Pamlico's Belozerskaya licence area.
Garnet sands are important for sandblasting, hydraulic treatment and
cutting of various materials as well as in the electronics industry and are in high demand throughout the world. World garnet market demand, which now stands at 200,000 tonnes, is growing at an annual rate of about 7% and by the year 2006 is estimated to reach roughly 350,000 tonnes annually, at a market price ranging from US$150 to $230 per tonne
Significant seismic work has been completed by Abrasiv and nine targets for development have been identified with estimated reserves of 580,000 tonnes. These areas are being further evaluated and sampled.
The exploitation target currently under evaluation is within the licence of North Mining and has previously been reported on by the Company. A one-tonne sample from the site was sent to Lakefield Research where seven micro-diamonds were found among the garnets. These included garnets of B9 and B10 type. As a result, processing by Abrasiv has been extended from garnets and titanium to include alluvial diamonds.
Abrasiv has entered into a cost-sharing and processing contract with a
local sand and gravel company, for the mining and separation of garnets and titanium. Following separation, the sand and gravel will belong to the joint venture parties. The joint venture partner can process two million tonnes per year and has all the necessary processing equipment including drills, trucks, bulldozers and loaders.
With the acquisition of Abrasiv Ltd., Pamlico expects to produce its first alluvial diamonds this fiscal year with the objective of funding future operations from self-generated cash flow.
The acquisition agreement provides that Pamlico will issue treasury shares to the current shareholders of Abrasiv. Pamlico will issue 250,000 common shares on closing of the transaction and additional common shares over the next five years on an earn-out basis.
The company is continuing to look for and evaluate strategic acquisitions to further its goal of financial self-sufficiency for production within 24 months.
Pamlico Resources Ltd. is a Vancouver-based mineral exploration and
development company.
PAMLICO RESOURCES LTD.
"Pellegrino Capone"
Pellegrino Capone
Secretary and Director
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
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