| | Published : November 08th, 2010 | Proposed Restructuring of African Aura Mining Inc. |
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Title: 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 Aura's 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 Aura's Board believes that:
- the Company's 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 Aura's 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 Aura's 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
Aura's 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 Company's 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
Aura's 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 London's 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
Aura's 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 project's 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 Company's
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 SEDAR's 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 Aura's mineral properties;
statements relating to the application for an advance income tax ruling from
the CRA; future production at the Company's New Liberty gold deposit; and
expectations relating to the completion of an inferred mineral resource
estimate on the Company's 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 Aura's mineral resource estimates; the
completion of the Arrangement, including the receipt of all necessary approvals
to proceed therewith; the Company's 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 Aura's 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 Aura's shareholders as part of the proposed
Arrangement); the Company's 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 Company's Annual Information Form dated April 30, 2010
available under the Company's 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
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African Aura Mining Inc.
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DEVELOPMENT STAGE |
CODE : AUR.V |
ISIN : CA00830H1082 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
African Aura Mining is a gold development stage company based in Canada. Its main asset in development is NEW LIBERTY in Liberia and its main exploration properties are NTEM, NKOUT and BATOURI in Cameroon and WEAJU, GONDOJA and PUTU in Liberia. African Aura Mining is listed in Canada and in United Kingdom. Its market capitalisation is CA$ 999 127 as of today (US$ 765 331, € 683 517). Its stock quote reached its highest recent level on April 08, 2011 at CA$ 5.00, and its lowest recent point on September 13, 2013 at CA$ 0.01. African Aura Mining has 4 757 747 shares outstanding. |
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