Timis scoops £80m

Frank Timis’s African Minerals has raised £80 million at £4 for its Tonkolili iron ore project in Sierra Leone.

The AIM-quoted company has secured the funding in an underwritten institutional placing, with the help of Canaccord Adams and Mirabaud Securities, to start infrastructure building at Tonkolili. African Minerals hopes to double a currently estimated resource of 5.1 billion tonnes there to 10 billion tonnes and to start production early next year.

The placing proceeds will go to build a 120 km haul road from the mine site at Tonkolili to the nearest railhead and to refurbish rail and port facilities. In addition, African Minerals has granted options to subscribe for £11.5 million-worth of shares at the placing price to China Railways Materials Commercial Corporation, with which the company already has a supply agreement.

Timis, the controversial former boss of Regal Petroleum and owner of 33.5 per cent of African Minerals, declares that the funding and off-take deals struck for Tonkolili’s output ‘place the company in a very strong position to realise iron ore production from Tonkolili during the first quarter of 2011’.

Floated at 75p three years ago, African Minerals’ shares, which dipped to 20p at one point, have recently been star performers, hitting a 440p high, and now trade at 399.75p, valuing the company at £854 million.