WESTERN MORNING NEWS STATEMENT

A great deal of mine tunnelling and mineral exploration work is currently underway at South Crofty to prepare the mine for tin extraction.  Further preparation will include building the mineral processing plant and other infrastructure works.  Depending on many different factors, it is anticipated that production will commence during 2009 or early 2010.

We have always said that by managing the mine more efficiently and effectively, South Crofty could realise a profit even when tin prices were at the level they were when the mine closed.  The fact that they have risen significantly is an added bonus.

There is increasing demand for tin as a modern, environmentally friendly metal on the world markets.  It is used for electro-plating in a wide variety of everyday products, including electronic components, it is seen as an alternative to lead solders which were banned in Europe last year and as a pure metal it is used for tanks in pharmaceutical chemical solutions, in fuse wires and in ammunition.  As an organic compound it is used in fungicides, insecticides and wood, textile and paper preservers and as an alloy it is used in soft solder, pewter, bronze and phosphor bronze.

Once the Review of Mineral Planning Permissions (ROMPs) was approved by Cornwall County Council in September 2006, we were able to focus on the additional funding avenues necessary to bring the mine back into production.  The structure in this respect was achieved in 2007 when a new company, Western United Mines Limited (WUM), was formed.  About £10 million has so far been invested in South Crofty since Baseresult purchased it in 2001 and up to £50 million has been earmarked for the mine’s development over the next two years.

The creation of a trackless modern mining operation is at the heart of WUM’s plans for operating South Crofty efficiently.  Mineral targets identified in the mining records support our belief that the mine has a very long and profitable working life ahead of it.

When the mine resumes full production it will have a major impact.  We will be employing around 200 full-time mine personnel on a good wage and we will be pouring millions of pounds into the local economy.  We will also be buying equipment and obtaining services locally whenever possible. Since last autumn we have acquired mining equipment from a Camborne firm, Drillserve Ltd, at a cost of around £200,000 and we have placed orders worth over £500,000 with suppliers in the South West generally.

There are currently 43 people employed by WUM at South Crofty.