African Minerals Limited
("African Minerals", “AML” or "the Company")
Agreement with Cape Lambert Resources Limited regarding the Marampa/Pepel Infrastructure
African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore interests in Sierra Leone, West Africa, is pleased to announce that it has entered into a binding Term Sheet with Cape Lambert Resources Limited (ASX:CFE) (“Cape Lambert”) in respect of the development of the Marampa rail and Pepel Port infrastructure (the “Marampa/Pepel Infrastructure Project”) that will service CFE’s planned iron ore mine at Marampa (the “Transaction”). The Term Sheet is consistent with the terms under which the AML disposed of its interest in Marampa Iron Ore Limited to CFE, as previously announced on 25 November 2009 and 25 January 2010.
Key Points:
· CFE will fund 33% of the construction costs of the Marampa/Pepel Infrastructure Project in return for a 33% interest in the Marampa/Pepel infrastructure.
· AML will provide CFE with infrastructure capacity (excluding rolling stock) for 2 mtpa production from Marampa, through Pepel Port, on commercial terms to be agreed between the parties.
· CFE’s contribution to the construction costs of the Marampa/Pepel Infrastructure will be fixed at US$45M; 10% discount to apply if CFE pre-pays these costs.
· Once the Tagrin Port and Tonkolili-Tagrin rail infrastructure for the Tonkolili iron ore mine is operational, CFE will have an option to match any third party’s offer, if received, to purchase the balance of the Marampa/Pepel Infrastructure, on arm’s length terms to be agreed between AML and CFE.
· Transaction is subject to completion of formal legal documentation, obtaining necessary regulatory consent and consent of the Government of Sierra Leone.
· The Government of Sierra Leone’s reserved rights to infrastructure remain unaffected by the Transaction.
Commenting on the Transaction, Frank Timis, Executive Chairman of African Minerals said:
“We welcome the participation of Cape Lambert. Their US$45M investment in refurbishing the Pepel to Marampa railway and Pepel Port provides funding for a small but important part of the overall infrastructure. It also allows the Company to focus its financial and technical resources on delivering the major project to develop the Tonkolili iron ore mine and the Tagrin infrastructure through to production. The transaction demonstrates that third parties are able to access the infrastructure, in accordance with the Company’s 99 year lease agreement with the Government of Sierra Leone.”
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