Wednesday 18th October 2006 Zinc group plans £10.7m issue AIM Resources intends to raise up to £10.7 million in shares for its Perkoa project in West Africa.
Broker Seymour Pierce is to co-ordinate the as yet-unpriced share issue, which is part of a £78 million finance package negotiated for Sydney-based AIM Resources by its Australian managing director, entrepreneur Marc Flory. The company has reached agreement for South Africa's Standard Bank to provide £48 million of project finance facilities for Perkoa in Burkina Faso, which boasts an internationally acceptable zinc reserve of nearly 908,000 tonnes.
In addition, finance group Cartesian Capital is to co-ordinate an £18.5 million convertible note issue. For its part, AIM Resources has agreed to accelerate the Perkoa project, so that the first ore is expected to be mined in mid-2007 and the deadline to reach full planned ore production of 45,000 tonnes a month has been brought down from two years to one.
AIM Resources, which lost nearly £3 million in the year to June, has off-take agreements for Perkoa's zinc with Europe-based mining giant Xstrata and Brazil's Votarantin. At 5.75p, up 0.25p today, the shares have doubled since we suggested holding on in August of last year.
Partial profit-taking might be prudent in today's nervous mining market, but this one could well outperform some others in the sector.
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AIM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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