China Railway Takes Stake In African Minerals

Funds Will Develop Sierra Leone Iron Ore Project

Guernsey-based exploration company, African Minerals Ltd., has signed an agreement with China Railway Materials Commercial Corp. to develop the Tonkolili iron-ore project in Sierra Leone.

Under the terms of the agreement China Railway will take a 12.5% stake in Africa Minerals in a share issued that will raise £167.8 million, according to a statement released by Africa Minerals on Thursday. The funds will enable Africa Minerals to begin the first phase of production at Tonkolili.

This is the latest in a series of Chinese overseas investments to attempt to become less dependent on the three largest iron ore producers, Rio Tinto, Vale and BHP Billiton.

African Minerals Announces Greater Iron Ore Reserves At Tonkolili

African Minerals has announced that the total JORC-compliant iron ore mineral resource at its Tonkolili project in Sierra Leone has grown to 10.5 billion tonnes. The company claims it is world's largest reported JORC compliant magnetite iron ore mineral resource. 9.7 billion tonnes of the JORC-compliant mineral resource has an average in-situ grade of 30.1% iron, with the remaining 0.8 billion tonnes grading 16.8% iron.

The company has also announced the placing of £80 million with institutional investors for the Phase 1 Hematite Development and Production Project.

Negotiations are ongoing with the China Railway Materials Commercial Corporation and African Minerals expects to execute definitive agreements with CRM in the next month for long term iron ore off-take, an investment by CRM and the procurement of equipment and services relating to the Project.

Production of Phase 1 Hematite iron ore is expected to commence in Q1 2011.

London Mining Granted Sierra Leone Mining Concession

AIM-listed London Mining has been granted parliamentary approval by Sierra Leone to extract iron ore from mine that closed 35 years ago and which is projected to earn the West African country $5 million dollars this year, Mines Minister Alpha Kanu said on Thursday.

Mr Kanu said " it is projected that by December 2010, the company will export up to 1.5 million tonnes of iron ore and will pay to the country some $5 million" (3.6 million euros). He said this would increase to $10 million by 2011 and to $20 million by 2013.

The British company will re-open the Marampa mine in northern Sierra Leone.

Graeme Hossie, CEO of London Mining plc, said, “Today’s announcement represents a major step forward for London Mining. The cross-party support we received for the incentives package is deeply encouraging for a continuing, long term relationship between London Mining and Sierra Leone. We now look forward to commencing development of the starter operation for the tailings as well as continuing our work on an expanded operation through development of the primary ore to reached a targeted 5-8Mtpa of production by the end of 2013. The Marampa mine exemplifies LM's strategy: using simple and deliverable logistics to reach the market, Marampa is being fast tracked into production to achieve near term cash flow and will then be expanded to significant scale. We are the first mining company in Sierra Leone to have its Mining Agreement approved by Cabinet and ratified by the Sierra Leone parliament under the new mining act and we will be implementing our construction and production plans immediately.”

Mr Kanu also said the government was working on similar agreements with international diamond mining companies in which one percent of turnover would go towards development and corporate social responsibility projects, including environmental protection.

He said that in total these agreements were expected to eventually amount to "a contribution to the national budget of some $300 million."

Sierra Leone is rich in diamonds, gold, bauxite and platinum but in 2009 the whole of the country’s mining industry contributed just $5.5 million to the country’s economy.

African Minerals Raises GBP80 Million For Sierra Leone Iron Ore Project

London-listed African Minerals has raised £80-million in a cash placing, which it will use to fund the construction of key infrastructure at its Tonkolili iron-ore project in Sierra Leone.

African Minerals said institutional investors would underwrite 20-million new shares at 400p a share and that China Railway Materials (CRM) would have an option to subscribe in cash for up to 2,88-million new shares, representing 14,4% of the placing.

Earlier this month, African Minerals signed a deal with CRM, whereby the Chinese company would buy a 12,5% stake in African Minerals for £152,6-million, providing the majority of funding required for the Tonkolili project.

Chairperson Frank Timis said the proceeds of the £80-million placing would allow African Minerals to expedite the construction of the critical infrastructure required for the first phase of the Tonkolili project.

It would start construction of a haul road to transport haematite iron-ore from the Tonkolili mine site to the rail head at Lunsar and would use part of the proceeds to pre-order major long-lead items for the refurbishment of Pepel port and the railway to Lunsar.

"This fund raising, together with the conditional CRM equity deal and two off-take agreements, places the company in a very strong position to realise iron ore production from Tonkolili during the first quarter of 2011," Timis added.

The placing is conditional upon the completion of a due diligence exercise by the underwriters, the entering into a formal underwriting agreement with the underwriters and such agreement becoming unconditional and the admission of the new shares to trading on AIM.

"We are pleased with the continued support that premier institutional investors in North America and the United Kingdom have given the company," Timis concluded.

Subsequent to the placing, but excluding the CRM option, the company will have 233, 639,654 common shares in issue.

Source: Mining Weekly

African Minerals Sells Stake To Chinese Firm

African Minerals, the Aim-listed exploration group, with prospective iron ore assets in West Africa, has sold a 12.5 per cent stake in the company to the Chinese state-owned China Railway Materials Commercial Corp (CRM), a steel trading firm.

The deal, worth £152.6m, will also see CRM agree to buy between four and eight million tonnes of iron ore each year from African Minerals’ mine at Tonkolili in Sierra Leone, over at least the next 20 years.

African Minerals has been promising tie-ups with bigger partners since September last year when it issued a statement to the stock market saying the group was in talks with a number of interested parties, including “a Chinese consortium”.

Sources close to the group said that today’s deal with CRM was “strategic” and that talks were still ongoing with a number of parties regarding a corporate deal. In September, African Minerals said it was in negotiations with FTSE 100-listed Kazakh miner Eurasian Natural Resources Corporation (ENRC). ENRC refused to comment, but did not rule out a tilt at African Mineral

The company said that the proceeds from yesterday’s deal would provide the majority of the funding expected to be required for its first phase of iron ore production, while CRM has also agreed to buy 10 tonnes each of magnetite iron ore.

“African Minerals welcomes the signing of this? agreement with CRM, one of China’s large-scale state owned enterprises and one of China’s largest steel trading companies,” said chief executive Alan Watling.

Source: The Independent

Resource Estimate Increased At Tonkolili Iron Ore Project

African Minerals Ltd said its pre-tax losses narrowed in the first half and announced on Friday an increase in resource estimates at the Tonkolili iron ore project in Sierra Leone.

It said the Tonkolili project contains an estimated 5.1 billion tonnes of iron ore and that drilling on the northern section of the licence area indicates the potential to increase the iron ore magnetite resource to about 10 bilion tonnes.

The AIM-listed company said it believes Tonkolil is the world's third-largest magnetite iron ore resource.

The group's losses narrowed to $5.1 million from $11.4 million on a significant drop in the cost of sales.

Source: Reuters

Cape Lambert Starts Sierra Leone Air Core Drilling

Australian resources company Cape Lambert Iron Ore reported on Thursday that it had started an air core drilling campaign of the historical iron-ore tailings at the Marampa project, in Sierra Leone.

The tailings resource estimate would likely be completed later this year.

The objective of the programme was to enable a joint ore reserves committee (Jorc) compliant resource estimate to be completed, and to provide samples for metallurgical test work, which would be conducted in Australia.

The company would use the results in evaluating the viability of a tailings retreatment operation, while exploring extensions to the hematite mineralisation and regional targets.

In October 2008, Cape Lambert formalised an agreement with Aim-listed African Minerals for a 30% investment in the Marampa project. It paid an initial script consideration of 44-million fully paid ordinary shares, committed to sole funding $25-million towards a feasibility study, and assumed management of the project.

The company had the option to terminate its investment, subject to achieving a minimum expenditure of $5-million towards a feasibility study.

In January this year, Cape Lambert increased its investment in the Marampa project to 35%, with the payment of a further script consideration of 17-million shares.

Source: Mining Weekly

Cape Lambert Update On WA, Sierra Leone Projects

An update from the Australian resource company, Cape Lambert Iron Ore Limited on its Marampa Iron Ore project in Sierra Leone and Cape Lambert South project in Western Australia.

A) Marampa Iron Ore Project (35% interest and Manager).
1. The initial work program at Marampa comprises
2. Tailings drilling and metallurgical test work
3. Evaluation of hard rock potential initially by pitting and trenching, with follow-up drill testing of defined geophysical gravity anomalies
4. Regional evaluation of the exploration license through geological mapping.

Cape Lambert South (100% interest)
1. During the December 2008 quarter, the Company completed an initial drilling program at Cape Lambert South, comprising 14 reverse circulation drill holes for a total advance of 4,107 meters and a single diamond hole.
2. Within the central portion of the magnetic anomaly, magnetite banded-iron formation, with down-hole intervals of between 35 and 73 meters, was logged in 4 RC holes and the diamond hole over a strike length of approximately 1.8km. Assay results and Davis Tube Recovery tests for these intervals and the other drill holes are still pending.
3. The Company had been advised that some results were expected at the end of January2009, but all results remain outstanding due to assaying delays. Cape Lambert continues topress the laboratory for the pending assays.

Cape Lambert Increases Sierra Leone Investment

Cape Lambert Iron Ore has today reached an agreement with Marampa Iron Ore Limited, a subsidiary of African Minerals Limited, to increase its investment in Marampa, the holder of the Marampa Iron Ore Project in Sierra Leone to approximately 35%.

The consideration payable by Cape Lambert for its increased investment in Marampa is the issue of 17 million fully paid ordinary Cape Lambert shares to Marampa.

The Company has conducted extensive due diligence on the Marampa Project and believes that the Project has the potential to become a significant iron ore project. This view has been enhanced by discussions with potential off-take partners and other parties interested in the joint development of the Marampa Project and/or related infrastructure and desktop studies of the Marampa Project by Cape Lambert technical advisors.

On 1 October 2008, Cape Lambert announced that it had entered into an agreement to make a 30% investment in Marampa, owner of the Marampa Iron Ore Project, through the issue of 44 million Cape Lambert shares and agreement to sole fund the first US$25 million toward a definitive feasibility study at the Marampa Project (“Initial Marampa Agreement”).

The Company also holds an exclusive option to acquire from African Minerals the outstanding shares in Marampa, which would result in Marampa becoming a wholly-owned subsidiary of Cape Lambert, at a price of US$200 million, less the shares issued and to be issued to the vendor and the initial payment.

The Company has also held discussions with parties interested in joint development of the Marampa Project and/or the development of the related infrastructure. These parties will visit the Marampa Project in the coming weeks so as to progress these discussions.

Source: Proactive Investors