22nd Jan 2009 07:00
For immediate release
22 January 2009
African Minerals Limited
("African Minerals", AML or "the Company")
Cape Lambert to increase investment in Marampa iron ore project
African Minerals Limited (AIM: AMI), the mineral exploration company with significant interests in Sierra Leone, West Africa, is pleased to advise that, following its announcement on 1 October 2008, the Company has entered into a further agreement (the "Agreement") with Cape Lambert Iron Ore Limited ("CLIO") (ASX: CFE, AIM: CLIO) to increase CLIO's investment in the Company's iron ore project at Marampa, Sierra Leone (the "Marampa Project").
Under the Agreement, AML will acquire 17,000,000 fully-paid ordinary shares in CLIO (the "CLIO Shares"), representing approximately 3.25% of the enlarged issued share capital of CLIO. This acquisition is in consideration of the issue to CLIO of new shares (the "Marampa Shares") in Marampa Iron Ore Limited ("Marampa"), AML's Bermuda registered subsidiary which holds AML's mineral interests in the Marampa Project. The issue of the CLIO Shares will take the Company's interest in CLIO to approximately 11.6%.
Following the issue of the Marampa Shares to CLIO, which represent 7.14% of the enlarged Marampa share capital, CLIO will hold approximately 35% of the issued share capital of Marampa. Under the terms of the agreement announced on 1 October 2008, which otherwise remain unchanged, CLIO retains the option to acquire the (then) outstanding shares in Marampa at a price of US$200 million, less the aggregate of (i) US$25 million; (ii) approximately US$13.2 million, being the value of the 44 million CLIO Shares issued under the 1 October Agreement; and (iii) approximately US$3.4 million, being the value of the 17 million CLIO Shares to be issued as at the date of the closing of the Agreement, based on a 5 day volume weighted average share price of US$0.20 per CLIO Share.
By virtue of its status, before this transaction, as a 30% shareholder of an African Minerals Limited subsidiary, CLIO is deemed to be a related party for the purposes of AIM Rule 13. In accordance with the AIM Rules, the directors consider, having consulted with the Company's nominated adviser, that the terms of the Agreement are fair and reasonable insofar as its shareholders are concerned.
Commenting on completion of the Agreement, Frank Timis, Executive Chairman of African Minerals said:
"We are delighted that Cape Lambert has increased its investment in Marampa, further demonstrating their confidence in the project and cementing our long-term strategic relationship. We look forward to working closely with Cape Lambert as manager of the project, with a view to developing a substantial mining operation supplying the European steel market with product from Marampa and to maximising the value of the project for our shareholders."
Enquiries:
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African Minerals Limited |
Tel: +44 (0) 1481 726833 |
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Frank Timis |
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Canaccord Adams Limited |
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Mike Jones |
Tel: +44 (0) 20 7050 6500 |
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Mirabaud Securities Limited |
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Rory Scott Pav Sanghara |
Tel: +44 (0) 20 7878 3360 |
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Citigate Dewe Rogerson |
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Martin Jackson |
Tel: +44 (0) 20 7638 9571 |
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George Cazenove |
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Related Shares:
AMI.L