Wits Basin Precious Minerals and London Mining settle litigation

Wits Basin Precious Minerals Inc. (OTCBB: WITM) and London Mining Plc have reached a complete settlement of all litigation between them in the U.S. and U.K. courts. As a result, Wits Basin and London Mining have ended their joint venture by mutual agreement and both companies believe this is in the best interest for each. Pursuant to the terms of the settlement, London Mining has transferred its ownership (100 A Shares, which constituted a 50% equity interest in CGMR) and all future rights of any kind to China Global Mining Resources (BVI) Limited (CGMR), which owns the iron ore mine of Xiaonanshan Mining Co. Ltd and the processing plant of Nanjing Sudan Mining Co. Ltd.

Wits Basin retains 50.1 percent of the A Shares and the remaining 49.9 percent of A Shares have been used to fund the costs of litigation. The A Shares carry a preference with respect to return of capital, distributions, promissory notes, management fees and any receivables due to CGMR.

With the transfer of the A Shares, Wits Basin now holds a 75.1% direct ownership in CGMR. Distributions will now be split 50:50 between Wits Basin and the other A Shares holders, until priorities and promissory notes are paid off. Then, remaining distributions will be split 75:25.

All of Wits Basins’ resources are devoted to the re-opening of the Xiaonanshan mine, located in Anhui Provence. Based on estimates, the mine contains sufficient ore for more than 30 years of operation at the previous recovery rate. Current iron ore prices are now more than 50% higher [$140USD/t vs $87USD/t] than in 2010 when the mine last operated. Wits Basin has contracted with “The Anhui Zhonghai Mining and Trading Company” ( AZHM&T Company) for the purpose of re-opening and operating the mine. AZHM&T Company currently owns and operates two mines in the Anhui Provence, one of which is an iron ore mine. AZHM&T Company has agreed to provide the start up capital required for the re-opening of the mine.