Wits Basin Announces Settlement Agreement with London Mining Plc and
Receives Controlling Interest in China Iron Ore Mine
MINNEAPOLIS -- February 11, 2013
Wits Basin Precious Minerals Inc. (OTCBB: WITM) and London Mining Plc have
reached a complete settlement of all litigation between them in the U.S. and
U.K. courts. As a result, Wits Basin and London Mining have ended their joint
venture by mutual agreement and both companies believe this is in the best
interest for each. Pursuant to the terms of the settlement, London Mining has
transferred its ownership (100 A Shares, which constituted a 50% equity
interest in CGMR) and all future rights of any kind to China Global Mining
Resources (BVI) Limited (CGMR), which owns the iron ore mine of Xiaonanshan
Mining Co. Ltd and the processing plant of Nanjing Sudan Mining Co. Ltd.
Wits Basin retains 50.1 percent of the A Shares and the remaining 49.9 percent
of A Shares have been used to fund the costs of litigation. The A Shares carry
a preference with respect to return of capital, distributions, promissory
notes, management fees and any receivables due to CGMR.
With the transfer of the A Shares, Wits Basin now holds a 75.1% direct
ownership in CGMR. Distributions will now be split 50:50 between Wits Basin
and the other A Shares holders, until priorities and promissory notes are paid
off. Then, remaining distributions will be split 75:25.
All of Wits Basins’ resources are devoted to the re-opening of the Xiaonanshan
mine, located in Anhui Provence. Based on estimates, the mine contains
sufficient ore for more than 30 years of operation at the previous recovery
rate. Current iron ore prices are now more than 50% higher [$140USD/t vs
$87USD/t] than in 2010 when the mine last operated. Wits Basin has contracted
with “The Anhui Zhonghai Mining and Trading Company” ( AZHM&T Company) for the
purpose of re-opening and operating the mine. AZHM&T Company currently owns
and operates two mines in the Anhui Provence, one of which is an iron ore
mine. AZHM&T Company has agreed to provide the start up capital required for
the re-opening of the mine.
Wits Basin plans to release a detailed Q&A website soon, in which all
shareholders will be able to submit questions by writing to:
Wits Basin will release press upon the activation of this website feature and
it will include FAQs related to the Company. Wits Basin will publish scheduled
updates to this section of the site.
About Wits Basin Precious Minerals Inc.: Wits Basin is a minerals exploration
and development stage company that owns a 75% equity interest in China Global
Mining Resources (BVI) Limited, which owns an iron ore mine and processing
plant in China.. Our common stock trades on the Over-the-Counter Bulletin
Board under the symbol "WITM." To find out more about Wits Basin Precious
Minerals Inc. (OTCBB:WITM) visit our website at www.witsbasin.com.
Forward-Looking Statements and Risk Factors: Certain statements included in
this press release may constitute forward-looking statements that involve
risks and uncertainties that could cause actual results to differ materially.
Such statements are valid only as of today, and we disclaim any obligation to
update this information. These statements are subject to known and unknown
risks and uncertainties that may cause actual future experience and results to
differ materially from the statements made. These statements are based on our
current beliefs and expectations as to such future outcomes. These risks and
uncertainties relate to the Company and its subsidiaries, and include, among
others, the ability to obtain or maintain regulatory approvals; the ability to
obtain necessary financing; and other risks and uncertainties described in the
Company's filings from time to time with the Securities and Exchange
Commission. The Company disclaims any obligation to update its forward-looking
In addition, 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 in
connection with any of our projects and any estimates relating to possible
reserves are subject to significant risks. 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, assuming recoverable, may
differ from the reserves already discovered and recovered by others in the
same region of the planned areas of exploration. Further, the cost of
exploration and exploitation can be extensive and there is no assurance that
we will have the resources necessary or the financing available to pursue
projects we currently hold interests in or to acquire interests in other
mineral exploration projects that may become available. The risks we face are
numerous and detailed information regarding these risks may be found in
filings made by us with the Securities and Exchange Commission, including our
most recent annual report.
Wits Basin Precious Minerals Inc.
Al McLellan, 646-937-8790
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