African Minerals Limited
("African Minerals" or "the Company")
African Minerals receives £167.8m from CRM to develop Tonkolili Iron Ore project
African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore and base metal interests in Sierra Leone, West Africa, is pleased to announce that the proposed investment by China Railway Materials Commercial Corporation (“CRM”) in African Minerals announced by the Company on 1 April 2010 has received approval of regulatory authorities of the government of the Peoples Republic of China and has now been completed.
CRM has invested £167,897,370 in African Minerals in return for 33,579,474 new common shares of $0.01 each in the Company (the “New Common Shares”) at £5.00 a share, a significant premium to the share price both at the current time and when the investment agreement was executed.
Application has been made for the New Common Shares to be admitted to trading and these will rank pari passu with the Company’s existing common shares. Admission of the New Common Shares to AIM is expected on 18 June 2010. Upon admission of the New Common Shares to trading, which represent 12.5% of the Company’s enlarged issued share capital, there will be a total of 268,685,793 common shares in issue.
Further to the Company’s announcement on 1 April 2010, CRM has the right to appoint one non-executive director to the board of AML and to retain this position unless CRM's shareholding in AML falls below 5%. Details of this appointment will be announced in due course.
Frank Timis, Executive Chairman of African Minerals, commented:
“We are very pleased to welcome CRM as a shareholder in African Minerals and we look forward to welcoming them to the Board of the Company. CRM’s involvement in the Company is a significant vote of confidence in the Tonkolili Iron Ore project and reinforces our relationship with China.
The investment by CRM strengthens our ability to accelerate the development programme at Tonkolili as we look to start Phase I hematite production in 2011 of 8 Mtpa. The equity raising, along with the guaranteed Off-take Agreement for a further 10 Mtpa of magnetite at benchmark prices, for a minimum of 20 years, secures the Company’s route to a commercial market in the Chinese steel industry. I have full confidence that the strong and experienced management team led by Alan Watling, our CEO, will advance the project through to our first phase of development and onto full production.”