30 January 2006Manager of Company AnnouncementsAustralian Stock...

30 January 2006
Manager of Company Announcements
Australian Stock Exchange Limited
Level 6, 20 Bridge Street
SYDNEY NSW 2000
By E-Lodgement
Black Economic Empowerment for Ruighoek Chrome Project and Option to Acquire New Chrome Project
Chrome Corporation (“Chrome or CCI”) is pleased to announce that it has finalised negotiations and has reached agreement in principal with a prominent Black Economic Empowerment (BEE) Partner which will acquire a 26% equity interest in Batlhako Mining Ltd, the current CCI 100% subsidiary which owns the Ruighoek Chrome Mine. The Company expects that a Heads of Agreement leading to a more comprehensive agreement will be executed in the next few days at which time details of the BEE group will be announced.
Simultaneously with the BEE partnering agreement, Batlhako has also secured ₤750,000 (AUD$1.785m) in debt financing. The debt financing has the mechanism to convert to 5.5% of Batlhako’s equity ownership upon 50% or more of Batlhako being disposed of.
As a result of finalising the BEE partner and proceeding with the ₤750,000 facility, CCI can now:
a) Apply to convert the old order prospecting rights at Ruighoek to new order rights followed by application for a mining licence; and
b) Move to bring the project to production.
Chrome Corporation also wishes to announce that it has secured an exclusive three month option to acquire a 74% interest in the prospecting rights on three farms in the Eastern Bushveld (Waterkop 113 KT, Zwartkoppies 413 KS and Moeijelijk 412 KS), all located in the Limpopo Province of South Africa. The chromite mineralisation on these farms occurs in the same highly sought after LG6 seam that is present at the company’s Ruighoek Mine in the Western Bushveld. The vendor for these farms is a black empowered entity and is not related to the BEE for Ruighoek. The option is subject to a due diligence period by Chrome with a AUD$200,000 exclusivity fee payable (half up front, half upon the formal granting of the relevant prospecting licences). Chrome looks forward to progressing with its due diligence on the Chrome farms and believes that it is well placed to proceed with the acquisition once due diligence is completed.
As part of the above transactions, CCI will proceed with a placement of 71.6m shares at 1.2 cents per share with a free attaching September 2007 option exercisable at $0.05, to
Suite B, 150 Hay Street, Subiaco, Western Australia 6008
Phone: (618) 9388 8430 Facsimile: (618) 9388 8450
sophisticated investors to raise $860,000.
CCI Managing Director, Brian Thomas said “CCI is very pleased to have reached agreement with an excellent BEE partner who is committed, financially capable and possesses the intimate knowledge of the South African mining industry to assist with bringing the Ruighoek Chrome Project back into production. Further we are excited with the debt funding facility for Bathlako. The conversion mechanism recognises the value of the work carried out to date by the company at Ruighoek with an implied value of the project now in excess of AUD$50m”.
Yours faithfully
Brian Thomas
Managing Director
Chrome Corporation Ltd
For further information please contact
Tel : (08) 9388 8430
Fax : (08) 9388 8450
Web : www.chromecorp.com
E-mail : [email protected]
Suite B, 150 Hay Street, Subiaco, Western Australia 6008
Phone: (618) 9388 8430 Facsimile: (618) 9388 8450