The past several weeks have been a highly productive and eventful time for our Company, culminating in the announcement on September 19, 2006 that Simba Mines, Inc. had entered into a definitive agreement to exchange its mining interest in Cachoeiras de Binga (CDB), a copper prospect located in Angola and its interests in two other exploration areas that it holds in Angola, for 5,193,375 shares in Australian Forest Industries, Inc. (AUFI) (which will change its name to Zebra Copper, Inc.), a public company trading on the Over the Counter Bulletin Board under the symbol (AUFI). A copy of the AUFI Press Release relating to this transaction is attached.
In addition to this Simba share/asset exchange transaction, it was announced in the AUFI Press Release that AUFI will also be issuing 4,806,625 shares to acquire Rockbury Properties Limited, which holds an additional interest in the CDB property (bringing AUFI ownership in this project to a net 80%) and an additional interest in each of the two Angolan copper exploration areas (bringing AUFI's ownership in these areas to a net 70%) from Bongani International Group Limited (BIG), a privately held company associated with the majority shareholders of Bongani Investment Holdings Limited (BIH), which is a large South African-headquartered contracting and engineering firm with operations in Angola and wide ranging capabilities in Africa. Additional information is available on the Bongani Group at www.bonganisa.co.za
We confidently believe that this arrangement will benefit your Company by materially increasing Simba's overall value and accelerating its growth strategy. We have therefore taken this opportunity to further explain and more clearly define what we consider to be the benefits of these transactions to our shareholders in this Stockholder Update Report.
As we have reported in past releases, prior to this transaction, Simba owned a 40% interest in CDB and a 35% interest in each of the two Angolan exploration areas. These projects have been held through Simba's wholly owned subsidiary company, Simbajamba Mines Limited. The result of these transactions with Australian Forest Industries, Inc. is to give Simba Mines' shareholders a major stake in the consolidated ownership of CDB in a single public entity trading on a recognized exchange, and to position this copper metal asset for large scale production as quickly and efficiently as possible. In addition, these transactions between these three groups bring about additional synergies, from which Simba Mines' shareholders benefit, as follows:
-- The Bongani Group's extensive expertise, experience and relationships within the African mining industry will help to streamline the permitting, registration and complex logistics of putting the CDB mining property into full scale production.
-- Australian Forest Industries/Zebra Copper's fully reporting 12g status and OTCBB exchange listing will aid the transition to a more recognized listing on the London-based AIM stock exchange, as well as provide the financial transparency needed to attract a comprehensive following within the broker, dealer and financial communities, as well as secure more efficient financing to bring the operation to full bankable status.
In addition to the transactions described in this update, AUFI has announced that it will be divesting itself of its current forestry business and, as noted above, plans to adopt the new name of Zebra Copper, Inc. to better describe its new core business.
Outlook Going Forward
As soon as the AUFI/Simba/Bongani agreements are fully executed and the private placement financing is completed, a major work programme is planned to commence on the site as part of a bankable feasibility study to convert the measured resource to a proven reserve status, so that plant construction can commence as soon as practicable.
The fact that CDB is on the coast, with close proximity to water, power, a deep water port and a nearby town, suggests that operating costs for mining this project should be favourable. Based on our current schedule, it is contemplated that the CDB property will be brought to into production by 2009.
We believe that the culmination of these recent events represents an attractive opportunity for Simba going forward and will serve as the catalyst for a new and highly successful chapter in the Company's growth strategy.
We are committed to making Simba a successful, sustainable and growing Company and will continue to keep you up to date on our progress as we work to increase shareholder value.
Yours sincerely,
Mark Smyth CEO Simba Mines, Inc.
Forward-Looking Statements
CVI Price at posting:
1.6¢ Sentiment: None Disclosure: Held
