AMF raises $1.8 million (June 02, 2003)

London-based America Mineral Fields (AMZ-T) will finance further development of its African projects through a private placement of 4 million units priced at 45 each. Gross proceeds amount to $1.8 million.

A unit consists of one share and a full warrant to buy another share for 75. These warrants will expire in five years, or 45 days after AMF’s shares trade for 20 days (beginning Nov. 22, 2003) at a weighted average of at least $1.10.

AMF is developing its Kolwezi cobalt-copper tailings project in the Democratic Republic of Congo, where reserves are pegged at 112.8 million tonnes of oxide tailings grading 0.32% cobalt and 1.49% copper (T.N.M., Feb. 10-16/03).

The project has the potential to be one of the world’s largest and lowest-cost cobalt producers, with annual output projected at 7,000 tonnes cobalt and 42,000 tonnes copper over 38 years.

However, the project has been stalled for years while the company tries to secure ownership and mining rights.

Under the existing agreement, AMF has a 60% stake in Kolwezi, with the remainder held by state-owned Gcamines as a carried interest. AMF has been trying to renegotiate the terms of the agreement, and has offered to give up a tax holiday in return for a larger equity position.

Meanwhile, the company has two more projects on the back burner: the Kipushi zinc-mine project, also in the DRC; and alluvial diamond prospects in Angola’s Cuango River region.