Western updates Indonesia manganese projects
Tuesday, January 31 2012 - 09:09 AM WIB
Transaction with Borneo Brothers Limited
On 21 October 2011, Western Manganese Limited (?WMN?) announced that it had signed a Heads of Agreement (?HOA?) with Borneo Brothers Limited (?BBL?) to acquire an option to buy 51% of PT Genesis Berkat Utama, an Indonesian company holding a manganese production license (?Genesis Project?) in Toli-Toli, Central Sulawesi.
Through the HOA, WMN also acquired first right of refusal to BBL?s pipeline of manganese projects for the next two years. The six projects in the BBL pipeline at the time of signing the HOA are located in Nusa Tenggara Timor, Central Sulawesi and Halmahera, with total area of 9,233 ha.
BBL is a well-established and highly successful exploration company with a proven track record of success in Indonesian resource projects. BBL brings to WMN its highly experienced finance and due diligence team backed by a strong and well established network of Indonesian political, business and community alliances.
On 21 November 2011, WMN executed an Option Sale and Purchase Agreement and Investment Agreement with BBL which legally binds the transaction pursuant to the HOA.
The transaction with BBL is subject to shareholder approval. Details of the shareholder meeting will be announced shortly.
Exploration Update
During the quarter, WMN focused on its commitment of securing additional tenements of strategic importance for the purposes of expanding the land area held by the WMN/BBL alliance. In this regard, four additional tenements have been added to BBL?s manganese project pipeline (since the HOA announcement on 21 October 2011).
As a result of the four additional tenements, there are now ten tenements in the BBL manganese project pipeline in addition to the Genesis tenement. WMN?s technical team was split into two groups for the purposes of reviewing these ten tenements for possible acquisition. The teams are comprised of experienced geologists, mining engineers and metallurgists as well as local representatives from the community.
West Timor - BBL Manganese Project Pipeline
WMN?s field team continued surveying and mapping the numerous potential locations within West Timor currently held in the BBL manganese project pipeline.
Extensive artisanal mining is ongoing throughout the area and stockpiles are evident. Local artisanal miners have expressed interest in cooperating with WMN because BBL?s pipeline includes several tenements which have already been granted production licenses.
During the quarter, executives from WMN and BBL have been maintaining governmental relations and community development concurrently while the field teams have been deployed. WMN has been lobbying the local government leaders on plans for sustainable mining and production scenarios to insure the best results for company?s commercial interests as well as the local population?s wellbeing and livelihood.
Halmahera - BBL Manganese Project Pipeline
During the month of December, WMN sent an expedition team to Halmahera where one of the four new tenements within the BBL pipeline is located. The license covers an entire Island off of the coast of Ternate. The area has significant artisanal manganese mining going on throughout the tenement by local community. The area has deep-water access surrounding the whole island as well as existing logging roads throughout. Several samples were taken from the license and the company plans to further inspect this license in the upcoming quarter.
Genesis Project - WMN holds option to acquire 51%
The Company has commenced a community relations campaign in Toli-Toli, Sulawesi where the Genesis Project is located. Meetings have been held with local residents. Artisanal mining is ongoing throughout the area and stockpiles are being sampled. The local community is currently amenable to work together on the Genesis tenement as all environmental license requirements have been met and production license has been granted.
Board Reshuffle and enhancement of Management Team
During the quarter, WMN reshuffled its Board of Directors and added a highly experienced management, operation, technical and production team with proven experience and success in the natural resources sector in Indonesia.
As a result of the board reshuffle, Christopher J. Cower moved from Non-Executive Director to Executive Chairman of the Board while CoRn K. Locke resigned as Executive Chairman but remains an Executive Director.
To fill the vacant Non-Executive position, the Company appointed Paulus lrawan to the Board as Non-Executive Director. Irawan adds strength to the Board with his decades of experience in the Mining, Natural Resources, Maritime/Logistics and Banking Industries in Indonesia and Australia. He brings extensive resource sector experience and financial acumen to the Board of WMN.
Allen Lyons is no longer fulfilling the role of Technical Director but remains on the WMN Board as a Non-Executive Director.
WMN also enhanced its management team during the quarter with the hiring of a General Manager, Technical Manager and Senior Geologist. Bharata Herudhita was appointed as the new General Manager and Head of Operations/Production, Marsudi Wijaya was appointed as Technical Manager and Zulfa Sabily was appointed as Senior Geologist. (end of excerpt)