the time is nigh, page-5

re: the time is nigh.resource inv article A Zinc Mine Close to Production & New Olympic Dam?

By Stephen Clayson
25 Jun 2006 at 07:40 PM EDT


LONDON (ResourceInvestor.com) -- AIM Resources [AIM:AIMR] is determinedly driving towards production with its Perkoa zinc project in Burkina Faso, while becoming more and more pleased with Mumbwa, its main exploration project.

AIMR expects that the Perkoa project will require $70-80m to bring into production, and the company is currently fine tuning its plans for raising this money and negotiating with potential off-takers, banks and institutional investors. The company has been speaking with some major names in the zinc smelting business regarding off-take agreements, and the market should not be surprised if news on this matter emerges soon.




In fact, the same goes for the arrangement of debt finance and the necessary placing of equity, even if the present turmoil in the equity markets may have complicated the latter somewhat.

A bankable feasibility study on the Perkoa project was completed in December and came to a positive conclusion, with 0.5 million tonnes of ore per annum figured to be mined over a 14 year project life.

AIMR is ready to move on the ordering of project items that require long lead times for procurement, being conscious of the need these days to get orders for such things in early so as to avoid delays later.

Although Perkoa amply underpins AIMR as an investment proposition, the Mumbwa copper-gold exploration project in Zambia offers investors a shot at blue sky. Indeed, AIMR’s Managing Director Marc Flory doesn’t hesitate to describe Mumbwa as perhaps comparable to the monumentally large Olympic Dam deposit in Australia.

If this turned out to be the case, it would obviously be a major event for AIMR, and maybe even for the junior mining sector as a whole. AIMR is earning into a majority stake in Mumbwa from BHP Billiton, and this could one day lead to a takeover of the former by the latter. Nothing is certain yet, but at the moment, Mumbwa looks like one of Africa’s most exciting exploration projects.

AIMR also has a PGM project in South Africa, Mokopane, but is unsure as yet whether to take this forward within the company. The project is not a bad one, but AIMR is hesitant about putting big money into the arguably rather trying South African operating environment when there are more attractive alternatives at hand.

Mokopane has a 1.1 million ounce platinum equivalent resource in place, and AIMR believes that at least 3 million ounces might be attainable with more work. The deposit would likely be suitable for open pit mining, and this might help draw in a joint venture partner or outright purchaser, which Flory indicates is probably the way things will play out.

Investment Outlook

After topping 8p last month ago, shares in AIMR have slid back along with the rest of the market, and now trade at around 5p. But with production at Perkoa drawing steadily nearer and the potential for some really attention grabbing exploration results from Mumbwa, it seems like only a matter of time before AIMR shares perk up.

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