phoenix rising

Announcement thru AIMs today.
Tonnages are starting to look impressive & a local market for all they can produce is a huge +

GVM METALS LTD

ACQUISITION OF FURTHER COAL INTERESTS IN SOUTH AFRICA

BOARD APPOINTMENTS



GVM Metals Ltd (“GVM” or “Company”), the South African mineral processing and coal mining company, is pleased to announce the following events in relation to its Holfontein and Limpopo coal projects.



GVM has executed binding Heads of Agreement with Motjoli Resources Pty Ltd (“Motjoli”) to acquire Motjoli’s 51% interest in the Holfontein coal project, its 50% interest in the Baobab Coal Joint Venture (“Baobab J.V.”) and its 100% interest in three granted prospecting rights adjacent to those held by the Baobab J.V. The Baobab J.V holds sixteen granted prospecting rights and the total area of the nineteen licences covers some 31,700 hectares. The Baobab J.V.s’ coal properties are located some 40km south of GVM’s existing 74% held properties on the Limpopo River.



The consideration payable for the Holfontein and Baobab J.V. interests is 34,863,226 ordinary shares plus a further 3,417,964 ordinary shares on the grant of export allocation at the Richards Bay Coal Terminal for a minimum of 100,000 metric tonnes (mt) of coal per annum to GVM. Richards Bay is the major port for the exportation of coal in South Africa.



The consideration for the three Limpopo prospecting licenses owned wholly by Motjoli is GBP0.01 per defined “economic” tonne of coal established during the Soutpansberg/Baobab exploration program which should be concluded before the end of 2007.



Board appointments

The Managing Director of Motjoli, Mr Nchaka Moloi is to join the Board of GVM as a non-executive Director. Mr Moloi is a geologist and a former Deputy Director General of the Department of Minerals and Energy. He is currently Chairman of Alexkor and a Director of the Minerals Development Board and the National Employment Fund.



Nonqubela Mazwai, an executive director of Motjoli is to join GVM as an executive director responsible for the group’s coal interests. Ms Mazwai is an independent consultant and has worked with the Minister of Minerals and Energy and the Richards Bay Coal Terminal.



The transactions and board appointments are subject to Ministerial consent to the transfers, South African Reserve Bank and other necessary regulactory approvals, successful listing of GVM on the Johannesburg Stock Exchange (JSE), which the Company is in the process of making, and GVM shareholder approval. The directors anticipate that these conditions will be concluded by the end of October 2006.



Coal Interests Acquired



Motjoli is GVM’s joint venture partner in the Holfontein coal project which is located in the Witbank coalfield some 100kms east of Johannesburg. The project contains an indicated resource of 56 million tones and a Competent Persons Report on the project is available on the Company’s website, www.gvm.com.au. A scoping study has been completed on the project based on production of 400,000 mtpa of soft/semi-soft coking coal and 500,000 mtpa of thermal coal. This study is also available on the Company’s website.



An infill drill program has just commenced on the Holfontein property. The results of this program will form the basis of the Bankable Feasability Study (“BFS”). The BFS is expected to be completed by the end of 2007. Discussions have already commenced with Eskom, the parastatal power generation authority, regarding sale of the projects thermal coal. Based on these discussions, GVM believes it will be in a good position to sell all the thermal coal it can produce at Holfontein. Strong domestic and export demand suggests a ready market for the metallurgical coal.



Motjoli’s 50% interest in the Baobab J.V. with Baobab Mining and Exploration (“BME”), a wholly owned subsidiary of Petmin Ltd, consists of granted prospecting rights over sixteen farms in the Soutpansberg / Mopane coal fields located within the Limpopo Province in the north of South Africa. These farms intermingle with or adjoin farms held by Rio Tinto as part of their Chapudi Project. The total area of these farms is in excess of 23,000 Hectares, bringing GVM’s total interests in the Limpopo coalfields to approximately 32,000 Hectares.



The Soutpansberg Mopane Coalfield was extensively prospected by Iscor / Kumba and others up until the early 1990’s. Based on open file reports available at the South African Council for Geoscience, the Company is confident that with further exploration resources on the farm will be greater than the 350 million inferred tonne resource at Limpopo stated in the Competent Persons Report, also on the Company’s website.



On Cavan, one of the farms acquired, coal seams are reported at averaging 22 metres. At Voorburg, there is a reported non JORC / SAMREC compliant resource of nearly 400 million tonnes. The coal in the region is stated as having a sulphur content of between 0.96% and 1.2% and the ash content as between 10% and 12%.



Simon Farrell, Managing Director or GVM said: “This is the most important step we have made so far in becoming a significant coal producer in South Africa. We look forward to making further announcements regarding the development of the projects in the near future.”