PTMN Petmin

RNS Number:4841B
Petmin Limited
03 August 2007

3rd August 2007



                                 PETMIN LIMITED

                    ("Petmin", "the company" or "the group")



            NEW ORDER MINING RIGHT BOOSTS PRODUCTION AT SOMKHELE AND
                        FURTHER CAUTIONARY ANNOUNCEMENT



Multi-commodity mining company Petmin Limited (JSE: PET; AIM: PTMN) announced
today that the recent granting of a new order mining right over Area 1 at its
new Somkhele anthracite mine near Richards Bay in South Africa's Kwa-Zulu Natal
province allows for:


  * a substantial increase in production;
  * an acceleration in the production build-up;
  * confirmation of combined reserves and resources of 75 million t;
  * an update in the life of mine from 11 to 15 years; and
  * According to Snowdens, a 310% increase in the mine's estimated value



Somkhele came into production earlier this year. The plant, which has a nominal
throughput capacity of 120 000 t a month, is now fully operational. The mine's
first export cargo of 32 000 t of product was dispatched through Richards Bay
Dry Bulk Terminal in June.



Production, from the mine's Area 2, was originally targeted at 500 000 ROM t in
2007/2008. Now, capital expenditure of R28 million is planned to bring Area 1
into production, boosting the 2007/2008 production target by 67% to 835 000 ROM
t - approximately what was expected to be achieved only in 2008/2009. Production
in 2008/2009 is now expected to be 970 000 ROM t, increasing to 1 600 000 t in
2010/2011 and reaching a maximum of 1 900 000 t from 2011 onwards.



Snowden Mining Industry Consultants (Pty) Limited has confirmed, according to
the SAMREC Code, total combined reserves and resources of 75 million t (25.475
million t of mineable in-situ reserves and 51.196 million t of resources) and
has updated Somkhele's LOM from 11 to 15 years.



The new order mining right over Area 1 augments existing rights over Areas 2 and
3. Mining rights - over Areas 1, 2 and 3 - cover 1 400 ha and prospecting rights
- over Areas 4 and 5 - cover a further 23 027 ha. The LOM increase excludes the
prospects for Areas 4 and 5. Further capital expenditure is planned in 2008 and
2009 to finalise an exploration programme for Areas 4 and 5, which may yield a
new mine of similar proportions to Areas 1 and 2.



Based on Snowdens assessment, the estimated value of the Somkhele project has
increased from R358 million to R1.470 billion at a 15% discount rate, which is a
310% increase in value.


NPV comparison


     Discount rate               CPR valuation              Updated valuation
                                    (ZAR m) *                 (ZAR m)**


         10%                         453                     2 000
         12%                         397                     1 780
        15% ***                      358                     1 470


* CPR valuation as at November 2006 as published in the AIM admission document.

** Updated valuation dated 25 July 2007

***Snowden believes that including the revised valuation depends on the
company's interpretation of market dynamics and proposed that cash flow be
discounted at 15% to take into account this risk.



Petmin COO Bradley Doig says there has been significant demand for the Somkhele
product range since the start of production, with negotiations under way with a
number of customers for medium- to long-term offtake agreements.



"The production of high quality anthracite at Somkhele will assist Petmin both
in consolidating its existing position in the anthracite market and in targeting
niche South African metallurgical markets."



The Petmin Group has secured a five-year agreement to export a minimum of 150
000 t to March 2008 and thereafter a minimum of 300 000 t via a specialised
facility at the Richards Bay Dry Bulk terminal.



Turnaround at Springlake



Meanwhile, Petmin has successfully implemented a turnaround strategy at its
Springlake operation near Dundee in Kwa-Zulu Natal, and earmarked further
capital of R14 million in 2007/8 to secure the sustainability of the turnaround.



New order mining rights granted over the adjacent Besterdale area are adding
approximately 500 000 t to Springlake's ROM opencast operation. In line with its
strategy to enhance earnings, Springlake has signed a 'take or pay' offtake
agreement for 350 000 t of its duff material until March 2009.



Springlake management has been bolstered with the appointment of Hardus
Combrinck as Mine Manager and Ngwedi Mabilo as Engineering Manager. Combrinck
has 26 years' experience in the gold, platinum and coal sectors and Mabilo 13
years' experience in the coal sector.



Further Cautionary Announcement


Further to the cautionary announcement dated 26 July shareholders are advised
that negotiations are still in progress which, if successfully concluded may
have a material effect on the price of Petmin's securities.

Accordingly, shareholders are advised to continue exercising caution when
dealing in the company's securities until a full announcement is made.



Enquiries:

Petmin                                    Numis Securities Limited +44 207 260 1000
Jan Du Preez (CEO)     +27 825 571 979    John Harrison
Bradley Doig (COO)     +27 824 597 818    Nick Stamp
www.petmin.co.za
Parkgreen Communications
Justine Howarth        +44 207 851 7480







                      This information is provided by RNS
            The company news service from the London Stock Exchange
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