BSG Resources Limited: Statement Regarding Simandou Project, Guinea
LONDON, November 7, 2012 /PRNewswire/ --
BSGR to resist smear campaign to undermine position in Guinea
BSGR, the wholly-owned subsidiary of BSG, confirms it has received a letter from the Guinean Technical Committee for the Review of Mining Agreements and Titles ("the letter") regarding an investigation arising from allegations of fraud in obtaining mining rights currently held by its subsidiary VBG.
The allegations are baseless and merely constitute a crude smear campaign. The letter received by BSGR is the latest step of a scheme designed to enable the Government of Guinea to renege on its contractual obligations, intimidate an investor which has already poured significant sums into the country, prevent it from pursuing its activities and eventually redistribute its assets to a variety of interested third parties, that seem to have already been promised the assets. The previous attempts failed upon exposure in the international media.
BSGR has already, over 12 months ago, supplied the Government with all the relevant information that it requires. In February 2012, the Guinean Minister of Mines after having made similar allegations, subsequently recanted and wrote to BSGR to apologise.
BSGR contests the legitimacy of the whole process and will use all available means to protect the rights it legally acquired in Guinea. This committee's procedure blatantly breaches due process and every principle governing international investment by purporting, inter alia, to give to a mere administrative body the right to confiscate valuable mining rights.
Disturbingly the Government of Guinea has instructed the recipient not to disclose any details of or the existence of the letter, despite the media having advanced knowledge of it. This lack of transparency further undermines the legitimacy of the investigation.
The Simandou project is a world-class iron ore asset, discovered and developed by BSGR from exploration through to full mining licence through investing $160 million prior to establishing its joint venture with Vale S.A. ("VBG"), with significant further investment since. Full development will require up to $10 billion investment from the VBG joint venture.
Asher Avidan, President of BSGR Guinea, said:
"This is the fifth and most clumsy attempt by an already discredited Government in an ongoing campaign to illegally seize BSGR's assets. Over the past four years we have invested $160 million of our own money to assess and demonstrate the value of the project; our success in doing so has now attracted rival groups that wish to usurp us by whatever means they can.
"There is no substance to the committee's ridiculous allegations, as all parties are well aware. BSGR was awarded its Simandou blocks because of its track record of investment at Zogota, which was in stark contrast to the record of the previous licence holders - drilling just six holes on Blocks 1 and 2 in the preceding 10 years.
"Despite repeated investigations by various third parties, financed and backed by George Soros, desperate to uncover a just reason for revoking BSGR's licences, all such efforts have merely reconfirmed that there is no case to do so and that the licences were issued through due legal and transparent processes.
"BSGR will defend its reputation and its rights in Guinea through whatever legal means prove necessary and is confident that its case would be upheld by any court. Under no circumstances will BSGR give way to this intimidation.
"Meanwhile, Guinea continues to descend into chaos with the huge potential of its natural resources remaining undeveloped, with major mining companies leaving the country as a result."
Background
VBG's Base Convention for Zogota and Simandou Blocks 1 & 2 was approved, ratified and publicly welcomed by the Guinean authorities in 2010. The joint venture has since met all the terms and conditions of its Base Convention.
BSGR remains fully committed to its projects in Guinea where, along with its partner, it is planning to invest $10 billion to develop a world class project which will ultimately create a low cost, high quality iron ore producer of 50Mtpa, with potential to ramp up production to 75-90Mtpa, and create 5,000 permanent jobs and indirect employment for many more.
About BSGR
BSG is a privately owned holding company with interests across the globe in natural resources, real estate, capital markets and the diamond industry.
BSGR, BSG's natural resources company, is an international diversified mining company with operations in fourteen countries across metals and mining operations in Africa and Eastern Europe, including ferro-nickel, diamonds, copper, iron ore and gold. The group is also active in the production/exploration of oil and gas and engineering, and in power generation in Nigeria. BSGR has a fifteen year track record of providing risk capital for developing and executing mining operations in challenging environments. BSGR employs over eight thousand people and has created value and prosperity for its African stakeholders in South Africa, Zambia, Botswana, Tanzania, Nigeria, Sierra Leone, the Democratic Republic of the Congo, and Guinea.
In all of these countries BSGR has operated in a fully transparent manner, working hand in hand with host governments at both the national and local level. BSGR takes pride in its ability to forge strong relationships with local communities and stakeholders in areas benefiting from its operations.
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Ben Brewerton / Oliver Winters
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