African Minerals Ltd Project Update (7276K)

TIDMAMI

RNS Number : 7276K

African Minerals Ltd

24 August 2012

24 August 2012

Project Update

("African Minerals" "AML" or "the Company")

Highlights

   --     Construction and commissioning of  Phase 1 nearing completion 

-- Production ramp up to commence by the end of Q3, to achieve sustainable run rate of 20Mtpa in Q2 2013

-- Current severe wet season has resulted in material handling issues and delay in project execution

-- Acknowledging impact of current wet season and ramp-up profile we reduce guidance to between 5 and 6Mt for this year

   --     Guidance for 2013, dependent on ramp up profile,  to be issued with FY 2012 results 

Continued Expansion to Sustainable 20Mtpa run rate

Most aspects of Phase 1 have now been commissioned on a dry basis, and are entering the wet commissioning stage, with production to begin ramping up at the end of the current quarter.

100% of Phase 1 production to become standard Lump and Fine DSO

The current wet season has been particularly severe in Sierra Leone this year and has affected both materials handling and project execution.

Once the new wet process plant is operational, and the current mobile dry crushing plant converted to a wet screening plant, the impact of the material handling constraints associated with wet season operations will be permanently removed.

Revision of Guidance

Our assessment of the timing and duration of the ramp up profile leads us to adjust our guidance for the year to between 5 and 6Mt, with the Company now expected to achieve a sustainable run rate of 20Mtpa during Q2 of 2013.

Export tonnage for 2013 will depend on the progression of production ramp up. Guidance for 2013 will be provided with the 2012 full year results.

Chief Executive Officer, Keith Calder, stated

"As we near completion of Phase 1 development, we are experiencing some final challenges, not unusual for a project of this scale. I expect us to commence a steady production build-up in the coming weeks and I am confident that we will achieve our targeted 20Mtpa sustainable run rate in the first half of next year."

ENDS

Contacts:

African Minerals Limited

[phone]

Mike Jones

Aura Financial

[phone]

Michael Oke/Harry Cameron

Deutsche Bank

[phone]

Rupert Green

African Minerals is developing its Tonkolili iron ore project in Sierra Leone, with a JORC compliant resource of 12.8Bnt. The project, which currently has a 60+ year mine-life, is being developed in 3 phases. Phase I is expected to produce 20 million tonnes of iron ore per annum at full capacity.

Phase II contemplates an expanded production facility at the mine to produce an additional 30Mtpa of 64% high grade hematite concentrate and the establishment of a new port facility at Tagrin Point.

African Minerals and its contractors currently employ approximately 11,200 people in Sierra Leone, 83% of who are Sierra Leonean nationals.

The Company has also developed significant port and rail infrastructure to support the operation of the project, via its subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in which the Government of Sierra Leone ("GoSL") has a 10% free carried interest.

The Tonkolili project companies are currently owned 75% by AML, and 25% by Shandong Iron and Steel Group ("SISG"), except for ARPS, which is owned 65% by AML, 25% by SISG and 10% by GoSL.

www.african-minerals.com

This information is provided by RNS

The company news service from the London Stock Exchange

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