AMI.L Regulatory News (AMI)

6 Mar 2008 07:01

African Minerals Ltd06 March 2008 For immediate release 6 March 2008 African Minerals Limited ("African Minerals" or "the Company") Proposed Strategic Acquisition African Minerals Limited is pleased to announce that it has signed Heads ofTerms under which it will enter into an agreement (the "Share Purchase Agreement") with Umbono Capital Partners LLC ("Umbono") and Umbono Nominees(together the "Sellers"), and an agreement (the "Management Agreement") withUmbono. Under the terms of the Share Purchase Agreement, which is subject to thecompletion of due diligence, the fulfilment of certain conditions and receipt ofall required third party and regulatory consents, the Company will acquire 100%of the share capital of White River Resources Inc. ("White River"), a privately-held Canadian exploration company from the Sellers. White River owns variousmineral claims interests and has rights to earn-in mineral claims interests inYukon, Canada, including the Kluane Project (the "Project Area"). Completion iscurrently targeted for 31 March 2008. Consideration under the Share Purchase Agreement will be met by the issue of1,500,000 new fully paid common shares of the Company to the Sellers at the dateof completion ("Acquisition Shares"). The consideration under the terms of theShare Purchase Agreement would be valued at £2,362,500 using the Company'smid-closing share price of £1.575 as at 5 March 2008. At the date of completion,application will be made for the Acquisition Shares to be admitted to trading onAIM. Under the terms of agreements with Xstrata and Stratagold, White River hasgiven undertakings to commit to a minimum spend of approximately CAD 4million onexploration activities at the Project Area between 2008 and 2012. Under the terms of the Management Agreement which is subject to the fulfilmentof certain conditions, Umbono will provide corporate, project management andgeological services to the Company for exploration activities on the KluaneProject for which Umbono will receive a fixed monthly management fee of CAD55,000 plus expenses, and 500,000 new fully paid common shares of the Company ("Fee Shares") to be issued at the date of completion. The Fee Shares would bevalued at £787,500 using the Company's mid-closing share price of £1.575 as at 5March 2008. At the date of completion, application will be made for the FeeShares to be admitted to trading on AIM. Shares issued pursuant to the twoagreements will be subject to a twelve month lock-in period during which timethe Sellers will be unable to dispose of the shares, except for any AcquisitionShares that the Sellers may need to dispose of in order to settle any taxpayable upon the sale of White River. The Management Agreement will also include an incentive arrangement wherebyUmbono will acquire interests in additional mineral claims on the Kluane Projectarea, on behalf of the Company. The consideration payable to Umbono, under theterms of the Management Agreement, with regards to the acquisition within sixmonths of completion of up to 250,000 acres of mineral rights interests, is tobe settled through the issue of up to 750,000 new fully paid common shares ofthe Company (the "Incentive Shares") to Umbono. Once the Incentive Sharesconditions have been met, application will be made for the Incentive Shares tobe admitted to trading on AIM. The issue of the Acquisition Shares and Fee Shares will increase the Company'sissued share capital to 157,258,241 common shares. White River is conducting an exploration program on nickel and platinum groupelement ("PGE") mineralisation in an area near Koidem, Yukon, on the Kluaneultramafic belt. The salient features of the program are: • Located some 70km north of the Wellgreen Mine, quoted by Coronation Minerals Inc., in a press release dated 30 May 2007, as having some 50m tons of historical resources, (non NI 43-101 compliant), grading 0.36% nickel, 0.35% copper and 0.54 g/t platinum and 0.34 g/t palladium, • The property covers approximately 30km of strike of the Kluane ultramafic belt, • Previously owned by Falconbridge and purchased by White River following the takeover by Xstrata of Falconbridge after a decision by Xstrata to move focus away from greenfields exploration, • The Kluane project is located on a section of Wrangelia, Kluane Mafic-Ultramafic belt, which is believed to be the second largest in North America, • The project has direct access from the Alaskan Highway, is 400km from Whitehorse, the provincial capital of the Yukon and is 490km from the deep-water port of Haines in Alaska, • Historical sampling and drilling activities have produced several zones of mineralisation with grades in grab samples of 4.69% nickel and 6.82g/t PGEs with some spectacular grades of 16.9% nickel and 18.1% copper, • Past drilling activities have inferred a small nickel deposit (non NI 43-101 or JORC compliant) of 390,235 tons at 1.35% nickel, • During 2007 an extensive helicopter-borne mag-EM survey was concluded which identified several compelling drill target zones with EM conductors, some measuring up to 500m in length, coinciding with surface-based mineralisation. Commenting on the proposed transaction, Frank Timis, Executive Chairman ofAfrican Minerals, stated: "I am excited about the proposed acquisition of White River. The Kluane nickelbelt has significant potential and despite being largely under-explored,encouraging mineralisation has already been identified along with a smallnon-compliant resource. With the additional benefit of the Company being able todraw on experienced local expertise to advance the exploration project,communicate with indigenous groups and to acquire additional mineral claims inthe project area, we will be well positioned to add further shareholder value.This acquisition also provides us with geographical diversification within thebase metals sector and will not in any way distract the Company from realisingthe full potential of its strong portfolio of assets in Sierra Leone." ENQUIRIES: African Minerals Limited Tel: +44 (0) 20 7849 3002Frank Timis (Executive Chairman)Roy Pitchford (Chief Executive Officer) Canaccord Adams Limited Tel: +44 (0) 20 7050 6500Robin BirchallMike Jones Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571Media enquiries: Martin Jackson/ Kate DelahuntyAnalyst enquiries: Scott Fulton NOTES Some statements in this news release are forward looking and consequentlyinvolve uncertainties and risks that could cause actual results to differmaterially from those anticipated from initial indications. Such forwardlooking statements include comments regarding exploration work. The Companydisclaims any obligation to update forward looking statements. It should benoted that there has been insufficient exploration to define an industrycompliant Mineral Resource and it is uncertain if further exploration willresult in the determination of such a Mineral Resource. This information is provided by RNS The company news service from the London Stock Exchange