25 May 2012

African Minerals in £191m funding

11/11/2010 Robert Tyerman

Frank Timis's African Minerals (AMI) has raised $307 million (£191.3 million) at 425p for its Tonkolili iron ore project in Sierra Leone.

The Guernsey-based AIM company has obtained the money through brokers Canaccord Genuity, Dundee Securities, GMP Securities and Mirabaud Securities and is also seeking to arrange a $500 million (£301 million) 'high yield loan facility' for a total funding package of around $800 million (£500 million).

The aim of the funding is to take Tonkolili into production in the fourth quarter of next year and AMI says it hopes to achieve a 'Phase 1' production rate of up to 12 million tonnes of iron ore a year by the end of 2012. The company signed a binding memorandum of understanding in July with Chinese steelmaker Shandong Iron & Steel about helping to finance Tonkolili's development and declares it is 'committed to finalising strategic partner' talks with Shandong over funding Phase 11, to lift production by a further 25 million tonnes a year.

Floated at 75p in 2007 and highlighted by Growth Company Investor in February at 399p, AMI's tightly-held shares now change hands at 425p, valuing the company at £1.1 billion. They should retain support while iron ore remains in vogue and Sierra Leone stays stable.

Tags: AIM, Commodities, Emerging markets, Fundraisings

Sector: Mining

Companies: African Minerals

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