CONTROVERSIAL businessman Frank Timis’ mining company plans to raise $800m (£496m) in a debt and equity issue to fund its iron ore project in Sierra Leone.
Aim-listed African Minerals said yesterday it has raised £191m through a share placing and hopes to secure a $500m (£310m) loan facility.
The proceeds will finance the remaining construction at its flagship Tonkolili mine and allow first production to take place towards the end of 2011.
The company successfully raised £191m through a placing of 45m shares at 425p each in the market yesterday, with payment expected on 18 November.
Timis, the company’s chairman, said: “We are delighted with the tremendous response internationally from a broad range of high quality institutional investors.
“We view this as a major endorsement of the quality of African Minerals’ Tonkolili Project, our team and Sierra Leone. We are now well placed to become a significant independent iron ore producer.”
Canaccord Genuity, Mirabaud Securities, Dundee Securities and GMP Securities Europe are acting as joint placing agents for the company.
In October, the company’s planned $1.5bn investment in the Tonkolili project suffered a further delay with fellow investor Shandong Iron & Steel needing extra time to complete due diligence.
Timis has said Tonkolili could become the largest iron ore mine in the world. The Romanian tycoon hit the headlines last year when he was head of Regal Petroleum, when the firm was slapped with a record £600,000 fine by Aim for misleading investors.
ROBERT FINLAY & GUY BLAKENEY
CANACCORD Genuity has advised African Minerals since it first floated on Aim in February 2005, when it was known as Sierra Leone Diamond Company. The investment bank has since seen the company through its first diamond sale, numerous cash-raising efforts and expansion into iron ore.
In yesterday’s share placing, Canaccord Genuity acted as nominated adviser and joint placing agent, alongside three other firms.
Robert Finlay, head of UK investment banking at Canaccord, has come full circle with African Minerals, having spent his childhood in Africa.
Finlay has been with Canaccord since 2004, and looks after companies involved in mining, energy and support services.
He has more than 20 years of corporate finance experience, having worked for Credit Lyonnais, ABN AMRO and Hoare Govett.
Guy Blakeney, director of investment banking for support services, has numerous mining clients including Mwana Africa and Kopane Diamond Developments.
If African Minerals decides to join the main stock market (and there have been rumours about such a move for years), Blakeney has plenty of experience, having helped Vision Opportunity China Fund make the jump last month.