AIM Resources (AIM) - $0.12• The company’s main asset is the...

AIM Resources (AIM) - $0.12
• The company’s main asset is the Perkoa Zinc Project in Burkino Faso, West Africa. Other projects are the Mumbwa copper-gold project in Zambia, and the Mokopane nickel-platinum project in South Africa.
• Construction and development at Perkoa is proceeding, but information on progress is scant. There appears to be a total disconnect between proposed commissioning of the plant in early 2008 and the lack of progress in underground development.
• Likewise, there is no information on the level of spending to date and how this compares to budget. The company has not clearly communicated how the remainder of the project will be financed, and there is still no reference to debt financing. In November, the company announced a proposal to sell up to $70m of convertible debentures but this has apparently been withdrawn due to errors in the report for its proposed listing on the Toronto Stock Exchange.
• As at 30 September 2007, the company had $85.6m in cash and short term deposits.
• The share price continues to drift, partly as a result of the weaker zinc price but also as a result of concerns regarding the development timetable of the flagship project.
• Lonsec remains of the opinion that Perkoa is a robust zinc project but is concerned about the lack of clarity and detail around both the project and the company.

Recommendation - Sell