African Minerals to raise up to approx $800 million for Tonkolili iron ore project
African Minerals Limited (AIM: AMI or the Company), the iron ore project development company that is developing the Tonkolili project in Sierra Leone, West Africa ( "Project"), is pleased to announce the launch today of a non pre-emptive conditional equity placing of 45,000,000 Common Shares ("Placing Shares") at a price of 425 pence per share ("Placing Price") to raise approximately £191.3 million ($307 million[1]) ("Placing").
China Railway Materials Commercial Corporation has the right to maintain its percentage shareholding in the Company following completion of the Placing and accordingly may wish to subscribe for new Common Shares in addition to the Placing Shares. Concurrently, AMI also announces that it has appointed a Lead Arranger to arrange for the provision of a secured loan facility of up to $500 million ("Debt Fundraising").
Highlights
• Equity placing to raise proceeds of approximately $307 million
• Certain major shareholders and other investors have already indicated their support for the Placing at the Placing Price and for an amount significantly in excess of the amount to be raised
• Sprott Resource Lending Partnership and Dundee Resources Limited have been appointed Lead Arranger to arrange a two year, secured, high yield loan facility of up to $500 million. The Lead Arranger has confirmed that subject to conditions precedent (noted herein) the first $1000 million of the Facility will be arranged for funding
• Proceeds of both the Placing and the Debt Fundraising to be used to finance the remaining construction of Phase 1 of the Project and to take the Company through to first production, expected in Q4 2011
• Company remains committed to finalising strategic partner discussions with Shandong principally with respect to funding the Phase II expansion of the Project by an incremental 25 Mtpa
• Incremental Capex expected to take Phase I production rate up to 12 million Mtpa by end of Q4 2012
This article was originally posted on Africa Oil & Mining Network
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