Proactiveinvestors Australia

Strong Track RecordGulf has an experienced technical and financial team to implement its growth strategy.  Individuals within the team have successfully funded and managed mining and/or exploration projects within Africa, Asia, South America and Australia. The team has expertise and experience in raising finance (debt, equity and private capital) from various capital markets around the world.

The team capabilities cover management matters as well as funding and technical issues (including mine and exploration geology, mining, processing, mineral marketing), mining investment analysis and legal and human resources matters.

Key members and individuals within the Gulf team have been involved in:

• Acquiring and managing the initial development of the Rincon Salar Lithium Project, Salta Province, Argentina. The lithium brine resource contains 1.4m tonne of Lithium.
• Managing the Moa Ferro Nickel Project/plant project in Cuba, with a BFS successfully completed in March 2004. This project had an execution cost of $450 million dollars
• Acquiring and managing the BFE, funding and initial development high grade underground Perkoa Zinc Project (JORC Ore Reserve of 6.3 million tonnes at a head grade of 14.5% Zinc) in Burkina Faso, West Africa.
• The cost effective and safe installation of the Block 4, Block Cave Project at Finsch Mine, on time, on budget and yielding a profit as planned for De Beers Consolidated mines. This includes the evaluation of various pre-feasibility, feasibility and execution of major underground projects. Site construction and installation of the major underground excavations and major infrastructure, all mining excavations, engineering and mining equipment selection and installation, personnel profile & team selection, recruitment, training & management.
• The acquisition and initial financing and scoping of Andean Resources Ltd Cerro Negro gold Project in Argentina.
• Acquiring and managing the development of Discovery Metals’ Boseto Copper Project in Botswana.
• Project management of an 8 month high-level due diligence study for the possible acquisition of base metal assets in Kazakhstan (Central Asia) valued at ±US$ 3 billion.
• The safe productive and cost effective management of four underground mines (mechanised board and pillar mining) and an open cast mine, including all technical services for Aquarius Platinum and contract management of the mining and mining related contractors.  
• Successful tender, procurement, installation and management of new earthmoving and mining fleets to move 30 Million Mt p.a. for Letlhakane Mine Expansion.

The team has also managed strategic relationships with BHP Billiton in Africa (with JV’s in Zambia), Anglo American’s Base Metals team in Johannesburg (with an exclusive data access arrangement for Burkina Faso) and Falconbridge (now Xstrata plc) in Botswana.

East African Vermiculite ProjectThe Namekara mining operation is situated in Eastern Uganda near the towns of Mbale and Tororo, close to the Kenyan border. The project can be accessed by road from Kampala via sealed highway (190km) or by flying to Kisumu in Kenya and driving across the border into Uganda (Figure 1).
The signing of a Sale and Purchase Agreement for the acquisition of the Namekara mining operation in Eastern Uganda is a significant achievement for Gulf as it secures an operation with the capability of producing a near term cashflow.

Next StepsGulf intends to inject up to USD$500,000 working capital into the operation over the next 12 months to bring the operation to a sustained production rate of 8,000 tonnes per annum of vermiculite product.

The company plans to expand the operation to achieve between 20,000 and 25,000 tonnes per annum of vermiculite product by 2012. The existing mine/pit is effectively a free digging operation. The vermiculite is easily dug using standard mechanical excavating equipment. It is potentially a low cost, very long life operation. 

Whilst the specific terms of the agreement are confidential, the cash consideration component of USD$1,000,000 can be paid on a deferred basis until 31 March 2012. The Sale and Purchase Agreement is subject to conditions usual to a transaction of this nature, including regulatory approvals. The purchase includes all tenements, both exploration and mining, processing plant and power generator, mine office and all associated infrastructure and equipment.

Gulf will receive assistance from Rio Tinto during handover, initial months of operation and in securing off-take agreements. 

Vermiculite MineralisationThe Namekara mineralisation was first documented in the 1950s, but it wasn’t until 2002 that initial test production commenced with a small scale operation that produced 16,000 tonnes of ore between 2002 and 2006. Under Rio Tinto’s stewardship, a substantial amount of work was completed including drilling over 64 holes for resource definition, pit optimisation and design, plant redesign, transport and infrastructure studies and market research.

The Namekara vermiculite deposit extends from near surface to a depth of 45 to 55m covering an area of 1 x 5km of which only a small portion has been exploited.

Vermiculite from Namekara has few impurities, excellent qualities and is widely known to the world vermiculite market.

The global vermiculite market is estimated by the United States Geological Survey (USGS) to be 800,000 tonnes, with production from Southern Africa accounting for approximately 39% of this amount.

The Namekara operation is capable of producing export quality vermiculite products with substantial profit margins due to the low cost nature of the operation, and excellent existing infrastructure.  Acquisition of the Namekara project from Rio Tinto fits with Gulf’s strategy to seek, acquire, develop and manage cash positive mining operations.

Uganda – Minerals Sector Offers Significant Growth Opportunities
Country OverviewUganda is an independent republic with a democratic government. This landlocked country ranges in latitude from approximately over 4º N in the extreme northeast corner of the country to 1º S on the Rwanda border, and in longitude from 29º 30’ W near Lake Edward on the border with the Democratic Republic of Congo to about 35º W on the border with Kenya (Figure 2-1).

Approximately thirty-four percent of Uganda’s 236 040 km² surface area is covered by wetlands, comprising a dense network of rivers, lakes and swamps. Lake Victoria forms the southern boundary with Tanzania and is the second largest fresh water lake in the world (Figure 2-1).

Uganda achieved independence in 1962 and has a population of over 30 million people (estimate June 2007). English is the national language but Swahili is widely spoken.

The mean high temperature in Uganda is 25-30 °C and the mean low approximately 15 °C. The wet seasons are March to May and October to November and dry seasons are December to February and June to August. Rainfall ranges between 500 mm to 2 500 mm and the relative humidity ranges between 70% and 100%. The cycle of rainfall allows two planting and harvesting seasons a year in most parts of the country, without the use of irrigation. Agriculture is the most important sector of the economy employing over 80% of the work force and coffee accounts for the bulk of export revenues.

The road infrastructure comprises 70 746 km of road of which approximately 23% is paved. The rail network consists of 1 244 km of narrow gauge track. There are 31 airstrips, 3 of which have paved runways, Gulu, Soroti and Entebbe, which is the only international airport. There are 3 ports with terminals on Lake Victoria, namely: Entebbe, Jinja and Port Bell.

Mining RegulationsAll minerals in Uganda are owned by the Government, which gives rights to individuals and companies to explore develop and exploit mineral resources under the Mining Act (1964).  Despite the Government’s policy of creating an independent, integrated and self-sustaining economy, the mineral sector was accorded low priority ranking in the National Development Plans. Although Government stated that the sector was to be one of the priorities for funding from the 2000 to 2001 Financial Year, the current level of funding does not show this.
Through the new policy, introduced in 2004, the Government intends to maximise the economic benefits of mineral exploitation, and promote private sector participation by putting in place an internationally competitive legal and fiscal regime for the sector.

The exploration and exploitation of minerals can only be carried out by granting of one of the following licences:

Prospecting Licence (PL). A Prospecting Licence is a prerequisite for any mineral exploration activities and can be granted to any individual or agent of a company. The licence is granted by the Commissioner, Department of Geological Survey and Mines on the payment of a prescribed fee. The licence is valid for a period of one year and can be area specific or mineral specific.

Exclusive Prospecting Licence (EPL). An EPL can be issued with the authority of a PL, whereby an area can be pegged up to a maximum area of 20.48 km². The Minister may also grant a Special Exclusive Prospecting Licence (SEPL) for a minimum area of 76.8 km². Both the EPL/SEPL can be area or mineral specific and is valid for one year and is renewable upon application and subject to a performance review.

Mining License. A developer may peg an area and apply for a mining license either as a Location or Mining Lease. A Location Lease is generally issued for small scale operators and is limited to a maximum area of 16 hectares and is valid for one year (subject to renewal). A Mining Lease is granted for areas not exceeding 256 hectares and is valid for a period of up to 21 years (renewable, depending on program).

Mineral Dealers Licence. This licence is granted by the Commissioner and is valid until the 31 December of the year of issue. It allows one to purchase, process and trade is specific mineral/s. A permit is required to utilise any natural water resources for mining purposes. With the exception of gold, a royalty shall be paid for all minerals extracted. However, the Mining Act is undergoing revision, with some of the major proposals including increasing the duration of licenses, size of exploration areas and lower royalty rates.

Scott Reid B.Sc. (Syd), Grad. Dip. Sci. (Geophys), MAIG, FFin, MAICD
Executive Chairman - Gulf Resources Ltd

Philip Treisman B.A., LL.B. (Wits)
Deputy Chairman - Gulf Resources Ltd

Wayne John Kernaghan B.Bus, ACA, FAICD, ACIS
Finance Director & Company Secretary

Mr Greg Duncan. B.SC MAusIMM
Non Executive Director (Technical)

Andrew Johnstone, B.Sc (Hon), MAIG, F Fin
Chief Operating Officer, Gulf Resources Ltd

Vic Fitzmaurice
Pr ENG, B.Sc (Min Eng), GDE (Min Econ), AMM (Assoc.), SAIMM (Fellow), Cert Dir (IOD)
Head of Gulf Projects and Project Director - Mining

Fharhaad Ali Moosa, B.Sc (Mech Eng), MBA, Pr ENG, GCC
Head of CTL Projects and Project Director

Derek Anderson B.Sc, MGSSA
Senior Consulting Geologist

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