PTMN Petmin

TIDMPTMN

RNS Number : 1194K

Petmin Limited

16 August 2012

PETMIN LIMITED

Incorporated in the Republic of South Africa

Registration Number 1972/001062/06

Share Code JSE: PET & ISIN: ZAE000076014

Share Code AIM: PTMN

("Petmin" or "the Company")

Petmin increases investment to 22.5% in North Atlantic Iron Corporation (NAIC)

Petmin is pleased to announce that it has increased its stake in the North Atlantic Iron Corporation (NAIC) from 17% to 22.5% based on the project's technical and economic viability.

Petmin has joint management control of NAIC, which is developing an iron sands to pig iron project in Canada's Labrador province. Petmin has an earn-in option to acquire up to 40% of NAIC for a total of US$25 million, plus a further option to acquire an additional 9.9% at a market-related price.

At 30 June 2012, Petmin's investment was US$6.5 million for 17% of NAIC. Petmin has recently invested a further US$4.5 million for an additional 5.5%, taking its holding in NAIC to 22.5%.

The increased investment follows a March 2012 maiden resource statement which indicated that NAIC's iron sands resource provides an abundant low-cost feedstock for production of a concentrate which can be converted into high-purity pig iron.

The resource statement, based on just 3% of the NAIC claim, indicates a 20 to 25 year life of mine for Phase 1 production of 500,000 tonnes of pig iron annually.

An updated resources statement is expected to be issued during Q4 2012 followed by a NI43-101 compliant statement in Q1 2013.

NAIC has support from the Canadian government and the Atlantic Canada Opportunities Agency (ACAO) has invested $500,000 in the project to partly finance the concentrator pilot plant through a repayable loan from ACOA's Business Development Program.

The NAIC claim has been explored to a depth of 15 metres. Aeromagnetic and Lidar surveys, and deeper drilling subsequent to the maiden resource statement, indicate potential for the NAIC iron sands resource to be extended to well below this level. A pilot mineral processing plant has been commissioned alongside the NAIC resource in Goose Bay, Labrador, and the first concentrate is expected to be produced during August 2012.

NAIC has appointed consultants TWP Holdings (Pty) Limited (TWP) to undertake the Preliminary Economic Assessment (PEA) which will be followed by a Pre-Feasibility Study. It is estimated that the PEA will be completed by Q1 2013.

Tenova Core (Tenova) has been appointed to undertake the engineering design for the pig iron processing plant and will oversee metallurgical test work and a smelt test using the concentrate produced by the pilot plant. It is estimated the smelt test will be completed during Q1 2013.

NAIC has also appointed engineering consultants HATCH to undertake a peer review of both TWP and Tenova for the purposes of the NI 43-101 statement and PEA sign-off.

"Geological and metallurgical results to date give Petmin good reason to be optimistic about its investment in NAIC," said Petmin director of business development, Bradley Doig.

"We are confident NAIC will soon have independent verification that the project will deliver a quality concentrate which becomes a low-cost feedstock for high-purity pig iron."

"The project's proximity to major steel markets, and access to labour and essential infrastructure such as power and a deep water port mean we expect NAIC production to be in the lowest quartile of the cost curve," Bradley Doig said.

Pig Iron - the commodity

Pig Iron is used as a feedstock in the steel making process. Most world production of pig iron is used in integrated steel mills with merchant pig iron (pig iron traded on world markets) making up about 70 to 80 million metric tons of the approximate 1.1 billion tonnes produced globally.

Significant merchant pig iron producers are located in Brazil, Russia and Ukraine. Brazilian producers are expected to be the most direct competitors to NAIC due to their proximity to the US market.

In December 2011 it was estimated that the median cost of production of the Brazilian pig iron producers was around US$460 per tonne delivered free on board to New Orleans (Stemcor - Dec 2011).

World Steel Dynamics estimates the world pig iron production requirements to increase to approximately 1.7 billion tonnes in 2025 from 1.1 billion tonnes in 2011.

Enquiries:

Petmin

Bradley Doig (Director of business development)

+27 11 706 1644

Media

Jonathon Rees

Jonathon@proofcommunication.com

+27 76 185 1827

Sponsor and Corporate Advisor (JSE)

River Group

Andrew Lianos

+27 83 440 8365

Nominated Adviser and Broker (AIM)

Macquarie Capital (Europe) Limited

Steve Baldwin, Nicholas Harland

+44 20 3037 2362

Johannesburg

16 August 2012

This information is provided by RNS

The company news service from the London Stock Exchange

END

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