African Minerals Limited – Tonkolili Project Update

African Minerals Limited – Tonkolili Project Update

Tonkolili Project Update

African Minerals Limited (AIM:AMI), the mineral exploration and development company with significant iron ore interests in Sierra Leone, West Africa, is pleased to provide the following update with regard to the Company’s  flagship Tonkolili Project and related infrastructure projects.

Highlights

  • The Company is currently on schedule to commence production and shipping of 8mtpa Direct Shipping Ore (“DSO”) hematite product in Q1 2011 (“Phase I”)
  • Work on the haul road and other infrastructure is progressing to schedule
  • An aggressive exploration programme is underway to define additional hematite mineralisation to underpin the expansion of Phase I from 8 mtpa of DSO product to 25 mtpa of DSO and hematite concentrate products (“Phase II”)
  • The increase in production capacity from 8 mtpa to 25 mtpa is subject to an engineering study covering process engineering, the extension of the railway from Lunsar to Tonkolili and the construction of a berth at Tagrin Point
  • The Company believes this could deliver the potential opportunity to self-fund the expansion of the project’s production capacity from 8 mtpa to 25 mtpa of hematite product and then to 45 mtpa of magnetite product. The timeline for the expansion to Phase II (25 mtpa) will be ascertained following the results of the engineering study, scheduled for delivery Q4 2010
  • Delivery of DFS and FEED reports on Phase III (45mtpa magnetite production) extended until after report on Phase II which is to be delivered in Q4 2010
  • As a result of the planned early production of hematite product, the start of Phase III delivery of 45 mtpa magnetite product pushed out until after 2014, as previously envisaged.

Commenting, Frank Timis, Executive Chairman of African Minerals, said:“I am delighted to be able to confirm that our Phase I development is on schedule and to confirm our capacity to produce saleable hematite product. The expansion of the drilling programme to define additional hematite mineralisation provides the Company with the potential opportunity to self-fund its growth from 8 mtpa to 25 mtpa of hematite product and in due course its subsequent expansion to 45 mtpa of high grade magnetite product.”

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