JOHANNESBURG (miningweekly.com) – Aim-listed minerals exploration company African Minerals on Thursday raised £63,8-million or about $105,3-million through a cash placing with institutional investors, to fund further work at its flagship Tonkolili iron-ore project, in Sierra Leone.

It had issued in excess of 25,5-million new common shares at 250p a share.

“We are delighted with the support that premier institutional investors in North America and the UK have given the company. Their commitment fully endorses the quality of the company's world-class iron-ore assets and our experienced executive and operational teams,” stated executive chairperson Frank Timis.

He explained in a statement that the proceeds would be used to further develop the magnetite iron-ore resource towards ten-billion tons and to fast-track the definitive feasibility study for the project.

Newswire Reuters quoted CEO Alan Watling as saying that the company expected the project to cost $2,6-billion in capital expenditure, which would include related infrastructure. He estimated the project to be worth between $5-billion and $10-billion.

The company noted on its website that it was planning to complete the feasibility study by the middle of next year, while the shipment of its first product from Tonkolili was expected to take place in 2012.

“This is a very large step towards us realising the full potential of our world-class iron-ore deposit at Tonkolili and the future infrastructure rehabilitation and construction work will in due course provide positive benefits to the local community and the economy of Sierra Leone,” added Timis.

It was also hoping to fast-track the definitive feasibility studies into the construction of port, rail and power infrastructure projects surrounding Tonkolili, which it was aiming to have completed before the end of the year.

The implementation of this infrastructure would allow it to develop a substantial mining operation in the African country.

African Minerals’ subsidiary, African Railway & Port Services, last year finalised a 99-year lease for the Pepel port and for the Pepel – Marampa – Tonkolili railway, which covered the redevelopment of this infrastructure.

In terms of the lease, the company would undertake an engineering study into the upgrade of the deep-water port and the existing railway between Pepel and Marampa.

If these proved viable, it would upgrade, operate and maintain the port and the railway and make these available to other users at commercial rates.

The company was also looking into extending the railway to the Tonkolili project, which would allow it to cost-effectively transport its iron-ore to the port for export. It would also operate this extension of the railway.

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