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13 May 2008 06:00
For immediate release 13 May 2008
African Minerals Limited
("African Minerals" or "the Company")
Strategic Investment
African Minerals Limited (AIM:AMI), the mineral exploration company with significant interests in Sierra Leone, West Africa, is pleased to announce that it has acquired 11,425,000 fully paid ordinary shares in Baobab Resources plc ("Baobab") representing an interest of approximately 17.56% in the ordinary shares of Baobab, an AIM-listed company (AIM:BAO) with a balanced portfolio of projects in the Republic of Mozambique. Baobab has exclusive long term tenure of 3,799km2 with projects at varying stages of development, ranging from advanced resource definition drill targets to brownfield exploration, and greenfield prospects targeting an array of commodities.
The shares were acquired on the basis of the issue and exchange of one fully-paid common share of US$0.01 in the Company ("AML Shares") for every ten fully-paid ordinary shares in Baobab held by the vendor in an off-market transaction. As a result of the transaction, a total of 1,142,500 AML Shares are to be issued to the vendors, which as at the closing price of an AML share on 12 May 2008 amounts to £2.18M. This represents 0.725% of the 157,608,241 common shares in issue prior to the transaction. Application will be made to admit the AML Shares for trading on AIM, which is expected to be on or around 20 May 2008, following which the total issued share capital of the Company will be 158,750,741 common shares.
Principal assets include:
The Tete Project, featuring Iron-Titanium-Vanadium mineralisation, with the potential for high grade magnetite mineralisation to extend over a strike length of 25km.
The Mundonguara Project, a Copper-Gold-Nickel-Silver deposit with historic production.
The Tete Project area is considered by Baobab to be highly prospective for a number of mineralisation styles and commodities. Significant potential is noted for iron ore in the form of cumulate magnetite. Selected rock chip assays have returned significant grades including 49.7% Iron, 21.7% Titanium, and 0.3% Vanadium. Four significant accumulations of titaniferous magnetite have been identified to date, and represent immediate exploration targets for further evaluation.
The area is also considered to have considerable potential for:
Platinum Group Elements (PGEs) and/or massive Nickel-Copper sulphides
Uranium mineralisation associated with dykes intruding the Mafic Complex.
The Mundonguara Project underwent mine development in the 1980's. Baobab has an ongoing exploration program targeting remnant and extensional mineralisation within the deposit. Underground trench sampling and drilling have confirmed historically reported grades between 1.6% - 4.6% Copper, 0.32g/t - 2.99g/t Gold and 1.0g/t - 63g/t Silver in various mineralised shoots. Significant supplementary exploration potential exists to define incremental mineralisation over a 5km strike length. This is being investigated with surface exploration techniques. Baobab has focussed on defining a JORC compliant resource estimate on the Mundonguara line of strike to lead to staged feasibility studies. The existing mine development offers an excellent opportunity for near term production and early cash flow should sufficient resources be identified.
Other exploration assets target polymetallic base and precious metal deposits, and stacked vein & supergene gold deposits.
Commenting on the strategic investment, Frank Timis, Executive Chairman of the Company, said
"We are delighted with our investment in Baobab Resources. Baobab is a company with a diversified mineral exploration portfolio in Mozambique, a country which has an investor friendly mining code and actively encourages foreign investment. Our strategic investment in Baobab, a company with exploration projects that we believe demonstrates the potential for significant growth, together with the advancement of our wholly owned projects provides a solid platform for African Minerals to unlock further shareholder value. We look forward to supporting Baobab and its management in realising the potential of their assets."
Notes:
Technical details of exploration projects and activities provided in this release are extracted from information freely available at the Baobab corporate website.
See: http://www.baobabresources.com/
It should be noted that there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.
Enquiries:
African Minerals Limited Tel: +44 (0) 20 7849 3002
Frank Timis
Roy Pitchford
Canaccord Adams Limited Tel: +44 (0) 20 7050 6500
Mike Jones
Robin Birchall
Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571
Media enquiries: Martin Jackson/Kate Delahunty
Analyst enquiries: Scott Fulton
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