🕐08.11.10 - 08:27 Uhr
AFRICAN AURA MINING: PROPOSED RESTRUCTURING OF AFRICAN AURA MINING INC.
Please find attached and below a copy of the announcement by African
Aura Mining, this morning:
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US
NEWS WIRE SERVICES.
November 8, 2010
TSX-V: AUR
AIM: AAAM
African Aura Mining Inc.
PROPOSED RESTRUCTURING OF AFRICAN AURA MINING INC.
November 8, 2010, African Aura Mining Inc.
("African Aura" or the
"Company"), the TSX V (AUR) and AIM (AAAM) listed exploration and
development company with divisions focused on iron ore and gold projects
in sub-Saharan Africa, announces that its Board of Directors has
determined, in principle, to proceed with a restructuring of its assets.
The objective of such restructuring is to enhance shareholder value by,
among other things, improving the recognition and value of its iron ore
and gold assets by separating such assets between two companies (as
described below).
African Auras current principal assets are:
Iron Ore Division
* the 38.5% owned Putu iron ore project in Liberia, with a
National Instrument 43-101 ("NI 43-101") Inferred mineral resource
estimate of 1.08 Bt @ 37.6% Fe from 2.6km of strike of a 12-13km target
* the 100% owned Nkout iron ore project in Cameroon, an 8km long
priority magnetic target on which recent (2010) drilling has intersected
iron ore mineralisation, with a further 12km of magnetic targets to be
tested
* the 70% owned Ngoa iron ore project in Cameroon which is
contiguous to the Nkout project
Gold Division
* the New Liberty gold project in Liberia, with a NI 43-101
compliant measured and indicated mineral resource of 1.38 million ounces
at a grade of 3.18 g/t Au (6.65Mt at 3.49 g/t measured and 6.87Mt at
2.88 g/t indicated) and on which a resource estimate to NI 43-101
requirements and a Preliminary Economic Assessment are underway
* a portfolio of hard rock gold prospects in Liberia within a
457 km2 mining licence, including the Ndablama and Weaju projects, which
have been subjected to artisanal mining activity
* a portfolio of hard rock gold prospects in Cameroon, including
the Batouri project which has been subjected to artisanal mining, and
the prospective Ntem licence, together totalling 1,074 km2
African Auras Board believes that:
* the Companys current market capitalisation understates the
intrinsic value of its gold and iron ore assets in west Africa
* investors tend to prefer pure play single commodity focused
entities for undertaking valuations and market comparisons
* providing shareholders with a shareholding in a new company
that holds the gold assets, pro-rata to their shareholding in African
Aura (which will hold the iron ore assets), will offer exposure to the
potential value to be created from each set of assets
* following the completion of the Arrangement (as defined
below), each of African Aura and Aureus (as defined below) will be
better positioned to finance their respective businesses and grow
through exploration and acquisition
The Arrangement
African Aura proposes to complete the reorganization by way of a plan of
arrangement (the "Arrangement"), which will be subject to regulatory,
shareholder and court approval.
Pursuant to the Arrangement, as
currently proposed, African Auras gold assets and any related
liabilities (as well as its shareholding interest in Stellar Diamonds
plc and an amount of cash) will be transferred to a new company to be
incorporated and proposed to be called "Aureus Mining Inc." ("Aureus"),
with African Aura retaining its current interest in its iron ore assets.
Under the Arrangement, holders of African Aura common shares will be
entitled to receive new common shares of African Aura and common shares
of Aureus in exchange for the common shares of African Aura held by such
holders on the record date of the Arrangement.
Upon completion of the
Arrangement, African Aura shareholders will continue to hold a 100%
interest in the assets of both African Aura and Aureus, through their
separate shareholdings in each of African Aura and Aureus.
It is
expected that neither African Aura nor Aureus will hold shares in the
other.
While the proposed Arrangement remains subject to further review and
approval by African Auras Board of Directors, the Company is in the
preliminary planning stages and has already applied for an advance
income tax ruling from the Canada Revenue Agency (the "CRA") to confirm
that the Arrangement may be completed on a tax neutral basis for African
Aura, its shareholders and Aureus.
The completion of the Arrangement will be conditional upon, among other
matters, the Toronto Stock Exchange (the "TSX") and AIM of the London
Stock Exchange ("AIM") having conditionally approved the listing thereon
of the Aureus common shares to be received by African Auras
shareholders pursuant to the Arrangement, subject only to compliance
with the usual requirements of the TSX and AIM, as applicable.
The Arrangement will also be subject to shareholder approval by at least
two-thirds of the votes cast by shareholders of African Aura at a
meeting of shareholders called for such purpose.
The Company expects to
deliver an information circular, describing the proposed Arrangement in
greater detail, to shareholders, with a view to holding a special
meeting of shareholders to approve the Arrangement and completing the
Arrangement in Q1 2011.
Further particulars relating to the Arrangement,
including the record and meeting dates for such shareholders meeting,
will be announced in due course by press release.
As announced in the Companys press release dated November 1, 2010,
David Reading has been appointed as a non-executive director to the
Board of Directors with immediate effect.
Upon completion of the
Arrangement, it is anticipated that Mr.
Reading will be appointed as the
Chief Executive Officer of Aureus as well as a director, and will be
joined by David Netherway (as non-executive Chairman), Steven Poulton
(as a non-executive director) and Luis da Silva (as a non-executive
director) on the Board of Directors of Aureus.
The Directors of African
Aura are presently considering additional individuals for nomination to
the Board of Directors of Aureus.
Luis da Silva, President & CEO of African Aura commented:
"African Aura is in the enviable position of having advanced potentially
company making assets in two different commodities.
The Board
recognises that, when compared to its peer group, African Auras current
capitalisation can conceivably be defended by either its iron ore assets
alone or its gold assets alone.
The Arrangement, if completed as
envisaged, is a mechanism designed to allow shareholders to benefit from
the value of owning a share in each of two dedicated pure play entities.
Shareholders will be entitled to receive one new share in African Aura
and one share in Aureus for each share they hold in African Aura.
We
look forward to keeping shareholders updated on the progress of the
Arrangement".
About African Aura Mining Inc.
African Aura is an established exploration and development company
listed on the TSX Venture Exchange (AUR) and Londons AIM (AAAM).
The
Company operates two divisions, namely: iron ore and gold:
- The iron ore division includes a 38.5% interest in the 12-13km
long Putu iron ore project in Liberia, located approximately 125km
inland from the deepwater shoreline of eastern Liberia.
Putu is moving
through pre-feasibility managed by African Auras joint venture partner
Severstal Resources (the mining division of Moscow listed OAO
Severstal), who has invested US$30m to earn a 61.5% interest in the
project.
Putu has a NI-43-101 compliant mineral resource of 1.08 billion
tonnes of iron ore at 37.6% total iron, from drilling undertaken on a
2.6km section of the ridge, which is less than 25% of the projects
strike length.
The best drill results to date are 91m at 61.3% Fe
oxidised Banded Iron Formation ("BIF") hematite and 232m at 40.8% Fe
magnetite.
A further 21,500m has been drilled (as of October 26, 2010)
since the mineral resource calculation.
- The iron ore division also includes a 100% interest in the Nkout
iron ore project in Cameroon.
Nkout is defined by an 8km long
geophysical anomaly, co-incident with a range of hills, from which
surface sampling to date has returned an average grade of 55% Fe.
A
further 12km of modelled BIF has been defined by airborne geophysics.
Nkout is presently the subject of a 4,500m initial mineral resource
definition drilling programme, which has intersected up to 75m of
hematite BIF and 195m of magnetite BIF.
The drill programme is designed
to provide a maiden inferred mineral resource estimate and, subject to
results, will be followed up by a further 4,000m of drilling.
- The gold division includes the New Liberty gold deposit, which
is a classic Archaean shear zone hosted greenstone gold deposit located
in western Liberia.
The project has a mineral resource of 1.38 million
ounces (NI 43-101 compliant 13.533 Mt measured and indicated mineral
resource at 3.18 g/t gold) projected to a depth of 300m, comprising
three zones along a 1.75km strike length.
The best drill intersect from
New Liberty is currently 8.45 g/t Au over 37m from 55m depth and the
deposit, which crops out at surface, remains open at depth.
Metallurgical testwork undertaken by the Company on drill core from New
Liberty has indicated a non-refractory ore with excellent expected
recoveries of up to 93%.
A Resource Statement and Preliminary Economic
Assessment by AMC Consultants (UK) Limited are presently underway, both
of which will contribute to a Definitive Feasibility Study for an open
pit followed by an underground gold mine, targeting 100,000oz annual
production.
- New Liberty is one of a series of gold deposits located within
the Companys 457km2 Class A 25 year renewable Mining Licence.
At the
Ndablama prospect, located 40km north east of New Liberty, it is
estimated by the Company that over 4,000 artisanal miners are actively
mining gold during the rainy season.
Geologically, Archaean greenstone
belts are known to host major gold mines in Canada, Australia, the
Democratic Republic of the Congo and Tanzania.
The Company considers
that the Archaean geology of the Man Craton of west Africa is one of
very few provinces globally that is highly prospective, but has yet to
be systematically explored.
In addition, the Company has an approximate 22% interest in AIM-listed
diamond producer Stellar Diamonds plc (AIM: STEL,
www.stellar-diamonds.com).
The Company has a highly motivated and experienced team with a track
record of discovering mines and taking projects through development and
into production.
As a pioneer, African Aura has attracted some excellent
strategic partners and shareholders, always with the objective of
preserving or enhancing shareholder value.
For further information on
the Company you are invited to visit its website at
www.african-aura.com, or SEDARs website at www.sedar.com, or contact
one of the following:
African Aura Mining Inc.
Luis da Silva, President & CEO Tel: +44
(0) 20 7257 2930
Evolution Securities Limited
Simon Edwards / Tim Redfern Tel: +44
(0) 20 7071 4300
Pelham Bell Pottinger
Charles Vivian / James MacFarlane Tel: +44 (0)
20 7861 3232
Forward-Looking Information
This press release contains certain forward-looking information.
All
information, other than information regarding historical fact, that
addresses activities, events or developments that the Company believes,
expects or anticipates will or may occur in the future is
forward-looking information.
Forward-looking information contained in
this press release includes, but may not be limited to: the future plans
and objectives of African Aura, including the completion of the proposed
Arrangement and the terms, timing and consequences relating thereto; the
anticipated management and Board of Directors of Aureus; the listing on
the TSX and AIM of the Aureus common shares to be received by African
Aura shareholders in connection with the proposed Arrangement; mineral
resource estimates; information relating to the continued exploration
and development of African Auras mineral properties; statements
relating to the application for an advance income tax ruling from the
CRA; future production at the Companys New Liberty gold deposit; and
expectations relating to the completion of an inferred mineral resource
estimate on the Companys Nkout project.
The foregoing and other
forward-looking information contained in this press release reflects the
current expectations, assumptions or beliefs of African Aura based on
information currently available to African Aura.
With respect to the
forward-looking information contained in this press release, African
Aura has made assumptions regarding, among other things: general
business, economic and mining industry conditions; African Auras
mineral resource estimates; the completion of the Arrangement, including
the receipt of all necessary approvals to proceed therewith; the
Companys ongoing exploration and development activities; and it has
also been assumed that no material adverse change in the price of
precious and/or base metals occurs and no significant events occur
outside of African Auras normal course of business.
Such forward-looking information is subject to a number of risks and
uncertainties that may cause actual results or events to differ
materially from current expectations, including: delays in obtaining, or
a failure to obtain, required regulatory approvals (including the
approval of the TSX and AIM with respect to the listing of the Aureus
common shares to be received by African Auras shareholders as part of
the proposed Arrangement); the Companys inability to complete the
proposed Arrangement or obtain a favourable confirmation from the CRA
regarding the tax consequences of the Arrangement; risks normally
incidental to exploration and development of mineral properties;
uncertainties in the interpretation of drill results and mineral
resources estimates; adverse changes in precious and/or base metal
prices; and future unforeseen liabilities and other factors including,
but not limited to, those listed under "Risk Factors" in the Companys
Annual Information Form dated April 30, 2010 available under the
Companys profile on SEDAR at www.sedar.com.
Forward-looking information speak only as of the date on which it is
made and, except as may be required by applicable law, African Aura
disclaims any obligation to update or modify such forward-looking
information, either as a result of new information, future events or for
any other reason.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accept responsibility for the adequacy or accuracy of this release.
Ends
James Macfarlane
Account Director
Direct line: +44(0)20 7861 3864
Mobile: +44 (0)7841 672 831
Pelham Bell Pottinger
5th Floor, Holborn Gate, 330 High Holborn, London, WC1V 7QD
Tel: +44 (0)20 7861 3232 Fax: +44 (0)20 7861 3233
www.pelhambellpottinger.co.uk
PLEASE NOTE OUR NEW OFFICE
ADDRESS & TELEPHONE NUMBERS AS OF MONDAY 24 MAY 2010
.......................................
A CarbonNeutral(r) company
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