13th Jan 2010 07:00
For immediate release
13 January 2010
African Minerals Limited
("African Minerals", "AML" or the "Company")
Divestment of Diamond Interests
African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore and base metal interests in Sierra Leone, West Africa, announces that it has divested its diamond operations in Sierra Leone to Obtala Resources plc ("Obtala") (AIM:OBT).
Under the terms of the sale and purchase agreement (the "Agreement"), AML has agreed to transfer to Obtala the entire issued share capital of Sierra Leone Hard Rock Limited, the Bermuda incorporated holding company of Sierra Leone Hard Rock (SL) Limited. The latter company holds the assets, including the mining leases and exploration licences, for AML's diamond operations in Sierra Leone.
Consideration for the Agreement is the issue by Obtala to AML of 21,170,422 fully-paid ordinary shares in Obtala, representing 9.9% of the enlarged issued share capital of Obtala and valuing the transaction at £4,260,547 (based on the closing mid market price for Obtala shares of 20.125p as at 12 January 2010). Under the Agreement AML is required to hold the Obtala shares for a period of 12 months following the date of admission to trading of those shares.
The Agreement holds a number of key benefits to African Minerals:
It allows AML to focus its human and financial resources fully on the development of the 5.1bn tonne magnetite iron ore resource at Tonkolili and its related infrastructure projects
It allows AML to maintain and benefit from an indirect exposure to the diamond interests without requiring it to fund or manage any further diamond related activities
It provides AML with exposure to the diverse portfolio of resource assets held by Obtala
As at 30 June 2009, Sierra Leone Hard Rock Limited had net assets of US$23.71 million. The loss before tax associated with the diamond operations for the year ended 31 December 2008 was US$12.78 million.
Frank Timis, Executive Chairman of AML commented:
"This agreement reinforces the Company's intention to pursue value-adding strategies for its non-core assets and allows us to continue to focus on the development of the Tonkolili iron ore project, already one of the largest reported magnetite deposits world-wide".
Enquiries:
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African Minerals Limited |
Tel: +44 (0) 1481 726833 |
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Frank Timis Alan Watling |
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Canaccord Adams Limited |
Tel: +44 (0) 20 7050 6500 |
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Mike Jones Robert Finlay |
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Mirabaud Securities Limited |
Tel: +44 (0) 20 7878 3360 |
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Rory Scott Pav Sanghara |
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Pelham Public Relations Limited |
Tel: +44 (0) 20 7337 1500 |
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Charles Vivian |
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Klara Kaczmarek |
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Related Shares:
AMI.LWoodbois