Shandong $1.5bn investment due to complete, $869m financing closed

African Minerals Limited (AML) $1.5 billion shares subscription agreement with China’s Shandong Group which was subject to regulatory approval in China appears to be on track as revealed by the Iron Miner on Monday.
AML said on Monday that it has been notified by Shandong Iron and Steel Group (“SISG” or “Shandong”) that “relevant approval has now been received from the China National Development and Reform Committee regarding SISG’s proposed $1.5bn investment in the Tonkolili iron ore project”.
The release further stated that “SISG also confirmed that testing of the trial shipment has been successful and that Tonkilili iron ore is of sufficient quality to satisfy the condition precedent to closure of the transaction” adding that the “off-take agreement described in the announcement of 1st August 2011 has also now been finalized”.
Receipt of the remaining Peoples Republic of China Government approvals it went on “is expected shortly and AML and SISG have therefore agreed to extend the long stop date for closure of the transaction until the end of March 2012”.
African Minerals also “confirmed” receipt of funds following settlement of the $350m convertible bond issue announced on 31 January 2012. The settlement of the convertible bond proceeds and the drawdown of the $417.7m Standard Bank facility to repay the previous secured loan facility, as announced on 9th February 2012 completes the $868m financing package announced on 31st January 2012.
Commenting on the status of the agreement Frank Timis, Executive Chairman of AML said “NDRC approval together with the positive results from the testing of the trial shipment represents major progress towards completing the Shandong transaction. We very much look forward to our partnership with SISG and closing the transaction upon receipt of the final PRC approvals. Following the successful funding announced last week and the expected closing of the deal with SISG, AML is well positioned to complete Phase I, ramping up to 20mtpa by the end of 2012, and to commence its Phase II expansion programme.”