Frank Timis might do a lot of good work for charity but that doesn’t mean the Chinese are going to sink $1.5bn into his iron project in Sierra Leone.
Oh no.
From RNS on Thursday morning:
African Minerals Limited (AIM:AMI), the iron ore project development company that is developing the Tonkolili project in Sierra Leone, West Africa, is pleased to announce that, further to its press releases of 13 July 2010 and 15 September 2010, Shandong Iron & Steel Group Co Limited (“Shandong”) and AML have amended and restated the terms of their Memorandum of Understanding (“MoU”) signed in July 2010 in respect of Shandong’s planned investment of US$1.5Bn in AML’s flagship iron ore project at Tonkolili and the related infrastructure projects (together the “Project”). The MoU continues to envisage Shandong purchasing a 25% interest in each of AML’s wholly-owned Bermuda subsidiaries of Tonkolili Iron Ore Limited, African Railway & Port Services Limited and African Power Limited (the “Subsidiaries”). This announcement updates the announcement released on 13 July 2010.
Continues to envisage! That doesn’t sound very confident does it?
So what are these amendments? The most important is probably Chinese government approval — by no means a given because of Frank’s, ahem, colourful past — and the finalisation of due diligence, which started back in July. The revised target date for the signing subscription and off-take agreement is now 20 November 2010.
Surprisingly – or perhaps unsurprisingly – house broker Canaccord Genuity is confident the deal will get done.
There is no reason to suggest that this due diligence won’t continue and be successful, in our opinion, the original 30 day due diligence period outlined was always optimistic. Given the extent of due diligence required according to the size of the ore body and the number of internal and external teams working across multiple geographic locations to undertake due diligence on the rail and port infrastructure as well as the mine at Tonkolili.
Hmm. Not sure about that. This looks increasingly binary to us.
Anyway, the early share price action in African Minerals:
Frank might need to pour himself a stiff vodka.
Related links:
Travelled Timis pays court to the Chinese – FT
The Regal report – FT Alphaville
AIM Disciplinary Committee Decision – Regal Petroleum
http://www.franktimis.co.uk/ – “a master entrepreneur”