African Aura placement to raise approximately £20.3 million

African Aura announces its intention to place 13,515,797 new common shares in the Company (the "Placing Shares") representing approximately 18.7 per cent. of African Aura's existing issued common share capital (the "Placing") at 150 pence per share. The proposed placing by African Aura of new common shares in the Company ("Common Shares") will be to institutional investors to raise approximately £20.3 million (approximately US$32.0 million) (before expenses). The Placing is fully underwritten by Evolution Securities Limited ("Evolution"), which is also acting as Global Co-ordinator and Sole Bookrunner.

The Placing

The Placing is subject to the terms and conditions set out in Appendix A. Evolution will today commence an accelerated bookbuilding process in respect of the Placing ("Bookbuild"). The price per Common Share at which the Placing Shares are to be placed will be 150p (the "Placing Price"). The book will open with immediate effect. The timing of the closing of the book and allocations is at the discretion of Evolution (following consultation with African Aura, if required).

The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing Common Shares including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

The Placing will be made on a non-pre-emptive basis. The Placing Shares represent an increase of approximately 18.7 per cent. of the current issued common share capital of the Company, and the Placing Shares represent approximately 15.7 per cent. of the enlarged issued common share capital of the Company.

The Company has applied for admission of the Placing Shares to trading on AIM and to listing on the TSX Venture Exchange. It is expected that such Admission will become effective and that dealings will commence on 2 December 2010. Completion of the Placing is also subject to receipt of applicable regulatory approvals, including the approval of the TSX Venture Exchange ("TSX-V").

The Appendix A to this Announcement (which forms a part of this Announcement) sets out further information relating to the Bookbuild and the terms and conditions of the Placing.

Director's Participation

The Company has been notified that, conditional on Admission, 293,335 Common Shares in aggregate will be placed at the Placing Price with the following Directors:

Director


Number of Common Shares taken up under the Placing


Value of Common Shares taken up under the Placing


Total number of Common Shares held following the Placing


Percentage of enlarged issued share capital

David Netherway


20,000


£30,000


104,594


0.12%

Luis da Silva


16,667


£25,000


74,826


0.09%

Guy Pas


200,000


£300,000


5,797,226


6.75%

David Evans


10,000


£15,000


255,500


0.30%

Steven Poulton


13,334


£20,001


1,247,436


1.45%

David Reading


33,334


£50,001


233,334


0.27%

Use of proceeds

The Company intends to use the net proceeds of the Placing, totalling approximately US$30.5 million, together with its existing cash resources of c. US$9 million to fund the following:

· c. US$6 million to accelerate the Company's reserve drilling programme and definitive feasibility study at New Liberty;

· c. US$4 million for additional exploration drilling at New Liberty;

· c. US$1 million for identification and drilling of additional exploration targets at Batouri Ntem and Sonfon;

· c. US$6.25 million to fund the Company's share of costs at Putu;

· c. US$11million to accelerate the drilling programme at Nkout with a view to defining a maiden inferred resource; and

· General working capital.

Commenting, Luis da Silva, President and CEO of African Aura said:

"The Company has demonstrated since raising funds in April its ability to deliver results by allocating additional resources to its projects. The momentum being gathered on all projects has raised external interest in the Company tremendously and we are now focused on achieving greater value in more aggressive fashion with a higher degree of confidence, safe in the knowledge we are adequately funded for implementation of our strategy. The projects are reaching exciting milestones on all fronts with the newsflow to follow in the immediate future."

This article was originally posted on Africa Oil & Mining Network

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