12th Nov 2008 07:05
12 November 2008
For immediate release
African Minerals Limited
("AML" or the "Company")
Infrastructure Lease
African Minerals Limited (AIM: AMI), the mineral exploration company with significant interests in Sierra Leone, West Africa, is pleased to announce that its wholly owned subsidiary, African Railway and Port Services (SL) Limited and the Government of Sierra Leone ("GoSL") have entered a lease ("Lease") in respect of the Pepel Port and the Pepel - Marampa - Tonkolili railway, following the signing of the Memorandum of Understanding between the Company and the Government of Sierra Leone, announced on 6 May 2008. Under the terms of the Lease, which is for the shorter of 99 years or the duration of the economic life of the Company's iron ore mines planned for Marampa and Tonkolili (and which is then renewable for a further term of 45 years at the Company's option):
The Company will undertake an engineering study of an upgrade to the deep water port at Pepel ("the Port") to make the facilities accessible to users including other mining, agricultural, cargo and passenger transport companies. Subject to the results of the study (which is to be completed by 30 June 2009) the Company will upgrade the Port, which it will then maintain and operate on a commercial basis;
Having identified a need for enhanced carrying capacity and improved transport services in general, the Company will upgrade the existing railway between the Port and Marampa ("the Railway") from narrow gauge to standard gauge, which it will then maintain and operate on a commercial basis;
The Port and the Railway are to be made available at commercial rates to other users including mining companies and general cargo and passenger transporters;
Subsequent to receipt of satisfactory engineering and feasibility studies, the Company will construct and manage an extension of the Railway to the Company's flagship iron ore project at Tonkolili, enabling the Company efficiently and cost effectively to transport its iron ore production to the Port for export to international markets;
The Company will pay an annual rental to the GoSL of US$250,000 for the Lease; in addition the Company will provide a guarantee to the GoSL of US$3M, which will be paid into an account to be jointly operated by the Company and the GoSL, to guarantee performance by the Company of its obligations to perform the engineering studies and commence upgrade work on the Railway. The performance guarantee is repayable to the Company in three equal tranches upon achievement of certain agreed milestones.
The GoSL will be granted a 10% interest in African Railway and Port Services (SL) Limited as well as representation on the board of that company.
Frank Timis, Executive Chairman of the Company commented:
"We are delighted to have finalised the terms of the lease covering the redevelopment of the infrastructure for Pepel Port and the railway as envisaged in the MoU announced in May 2008. Pepel Port will in due course provide a deep-water facility servicing the West Africa sub-region, enabling both Sierra Leone and neighbouring countries to export their goods to international markets.
The Company has invested significantly in Sierra Leone over the past four years and sees this latest element of its relationship with the Government of Sierra Leone as further proof of the latter's endorsement of the part being played by the Company in the country's development. We look forward to completing the engineering studies required on the port and railway in order to begin the redevelopment of these key elements of infrastructure in Sierra Leone and will assess our funding requirements when those reports are finalised."
Enquiries:
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African Minerals Limited |
Tel: +44 (0) 20 7849 3002 |
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Frank Timis |
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Canaccord Adams Limited |
Tel: +44 (0) 20 7050 6500 |
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Mike Jones |
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Mirabaud Securities Limited |
Tel: +44 (0) 20 7878 3360 |
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Rory Scott |
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Citigate Dewe Rogerson |
Tel: +44 (0) 20 7638 9571 |
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Martin Jackson |
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George Cazenove |
Related Shares:
AMI.L