G4G Resources Enters Iron Catalyst Market By Acquiring 51 percent Interest in Magnetite Holdings (Pty) Ltd
Released on: August 28, 2008, 8:16 am
Press Release Author: G4G Resources Ltd.
Industry: Energy
Press Release Summary: G4G Resources Enters Iron Catalyst Market
Press Release Body: Vancouver, B.C., August 25, 2008 -- G4G Resources Ltd (TSX-V: GXG) ("G4G") and Magnetite Holdings SA (Pty) Ltd ("Magnetite Holdings") today announced that they have entered into an agreement which will allow G4G to acquire a 51% interest in Magnetite Holdings. Magnetite Holdings is a South African-based company with iron ore assets in Namibia.
Initial work has been completed by Magnetite Holdings to produce a chemical grade iron catalyst for sale to coal, gas and biomass converters which currently use the Fischer Tropsch (FT) process to produce ultra-clean diesel and gasoline. The most notable users of this particular iron catalyst are Sasol Ltd. of South Africa and other alternative fuel producers using the FT process.
"Chemical catalysts that break fossil fuels into their molecular parts result in higher rates of production efficiency and more environmentally friendly fuels is a multi billion dollar business," said Basil Botha, President & CEO of G4G Resources Ltd. "Although catalysts have always been essential in the chemical industry, advances in catalyst technology have the potential to revolutionize the fossil fuels market. Governments who chose to adapt to these new technologies will have more control over their own political and economic destinies," Botha continued.
Catalysts in combination with the Fischer Tropsch process have the potential to: . Allow remote regions of the world to become less dependent on foreign oil by producing liquid and gas fuels from coal. . Allow economical production from stranded gas fields, which accounts for a large proportion of the world's known gas reserves. . Free countries with large coal resources, like China and the US, from dependence on foreign oil. . Reduce emissions of pollutants like nitrogen oxides, sulphur dioxide and other particulate matter. . Promote waste recycling through conversion of plastic, rubber, municipal waste and waste oil to clean fuels.
Magnetite Holdings has an 80% equity holding in Namibian Magnetite (Pty) Ltd. In consideration for a US$20,000 cash payment, Magnetite Holdings will grant G4G an exclusivity period of sixty days, in which G4G may conduct due diligence on the iron ore assets.
Following a positive outcome from the due diligence evaluation, G4G can exercise its option to spend US$480,000 over a 12-month period to expand the current resource and obtain NI 43-101 status of the assets.
Following completion of the option to expand the current resource and the completion of a bankable feasibility study, G4G will acquire a 51% interest in Magnetite Holdings. Upon exercising this option, Magnetite Holdings will be entitled to put its shares into G4G in consideration for a gross royalty of 2% of revenue or a payment by G4G to Magnetite Holdings of US$2,000,000 that shall be satisfied, at the sole option of G4G, through a cash payment of issuance of the common shares of G4G with a value of US$2,000,000 calculated using the (5) five day weighted average closing price of the common shares of G4G for the (5) days prior to the date of issuance. The final agreement with Magnetite Holdings is subject to regulatory approval.
"This acquisition fits well with the G4G model to acquire iron ore assets in countries where there is good infrastructure. It will also give us the potential to expand the current resource with the potential to use the FinesmeltTM iron ore reduction process to produce hot briquetted iron and pig iron for sale to the South African steel industry. Our immediate intention is to drill the current historical resource to the NI 43-101 compliant resource category. This will immediately be followed by a bankable feasibility study," stated Basil Botha.
Under the terms of the agreement between G4G and Magnetite Holdings, each party will have the right to appoint two Directors to the Board of Namibian Magnetite. Following exercising of the second option, G4G will have the right to appoint one further Director as the Chairman of the Board of Directors.
The iron ore property is well located 40 kilometres south of Namibia's capital city of Windhoek. The ore body is of sedimentary origin and is mainly silicates, magnetite and specularite iron. The deposit is accessible by road and water, and power is readily available. The potential for an open-pit operation exists, and operations can be conducted year round. The potential also exits to add further mineral claims to the current land position.
History of the Fischer Tropsch Process
The Fischer Tropsch technology ("FT") was originally discovered in the 1920s by German scientists and by 1938 Germany was running nine industrial plants which produced fuel from coal. In the 1950s, the South African Coal Oil and Gas Corporation (SASOL) commissioned an FT plant based on coal in Sasolburg, South Africa. Research on FT has continued ever since at SASOL. Due to the oil crisis of the mid 1970s, SASOL constructed two much larger coal-based FT plants which came on-line in 1980 and 1982 respectively. These two plants produce approximately 160,000 bbl/day of fuel which supplies 28% of South Africa's fuel requirements. Further commercial ventures, which have used natural gas as a feedstock include Shell's plant in Malaysia and PetroSA's plant in South Africa. In the last few years the interest for FT has grown significantly due to the increase in the demand for energy. Recent commercial ventures include the development of Gas-To-Liquids ("GTL") plant, Oryx GTL, in a joint venture of SASOL with Qatar Petroleum at Ras Laffan in Qatar.
About G4G Resources Ltd
G4G Resources is a Canadian-based mineral exploration and development company focused on iron ore and iron production projects. On March 31, 2008, the Company announced the signing of an agreement with TCL Sweden Ltd., a wholly owned subsidiary of Teck Cominco Limited, for G4G to option eight mineral properties in the Norrbotten iron ore mining district of Sweden. On July 7, 2008, the Company announced a joint venture with Iron Mineral Beneficiation Services (Pty) Ltd (IMBS) to establish joint ventures to utilize FinesmeltTM technology, a process which converts iron ore fines into high quality iron units. On July 14, 2008, the company announced the formation of a strategic partnership with Crusader do Brasil Mineracao Ltda., a wholly owned subsidiary of Crusader Holdings NL, under which the companies will work together to acquire iron ore fines in Brazil as feedstock for the production of saleable iron units. A further area of focus is the alternative fuels arena utilizing the Fischer Tropsch (FT) process to convert gas, coal and biomass to liquid fuels. On August 13, 2008 G4G signed a memorandum of understanding with the University of Witwatersrand, Johannesburg, South Africa ("Wits") to work towards setting up a joint venture company which will commercialize the syngas to liquids production process that has been developed by the Centre of Materials and Process Synthesis (COMPS) situated at The University of Witwatersrand. The agreement is for the exclusive world wide rights to the FT technology developed by COMPS. Additionally, G4G is evaluating a number of other strategic growth opportunities to create and enhance shareholder value.
Forward-Looking Statement
This document may contain or refer to forward-looking information based on current expectations, including, but not limited to timing of mineral resource estimates, future exploration or project development programs and the impact on the Company of these events. Forward-looking information is subject to significant risks and uncertainties, as actual results may differ materially from forecasted results. Forward-looking information is provided as of the date hereof and we assume no responsibility to update or revise them to reflect new events or circumstances. For a detailed list of risks and uncertainties, as it relates to G4G Resources Ltd., please refer to the Company's 2007 Annual Report filed with SEDAR on April 23, 2008.
For more information contact:
Basil Botha, President and CEO G4G Resources Ltd Tel: 604-602-9868 Email: ir@g4gresources.com
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