Sydney, Australia — MININGREVIEW.COM — 18 July 2008 – AIM Resources Limited – an Australian and London-listed minerals company focused on the acquisition and development of major mining ventures in Africa –.has decided to suspend development activities at its Perkoa zinc project in Burkina Faso until further notice, and to place the project on a “care and maintenance” programme.
A news release issued here confirmed that this decision would be implemented with immediate effect.
“Current zinc prices and forecasts have made funding difficult for zinc projects, and a downturn in both debt and equity markets has also reduced financing opportunities significantly,” the release explained. “A range of alternative funding options has been explored, including strategic industry partnerships, but the company has been unable to secure a deal the board considers to be in the best interests of shareholders,” it added.
“A care and maintenance plan will be put in place to keep Perkoa’s strategic assets in good condition, with consideration being given to re-start the project when zinc prices are more favourable and funding options improve,” the release continued. “Efforts to improve the business case have yielded tangible benefits, but these changes do not compensate for the significant recent reductions in the zinc price.”
AIM went on to say: “Cash reserves of the company following the implementation of the care and maintenance plan (estimated to be in the order of US$15 million) (R120 million) will be used in the following areas:
- To continue to strengthen the Perkoa business case, including assessing the feasibility of extracting a silver concentrate, and increasing the reserve estimate and geological model;
- To continue exploration activities in Burkina Faso, Zambia and South Africa;
- To identify and evaluate business development opportunities for expansion of the exploration portfolio; and
- To continue to evaluate funding and strategic options for Perkoa, and most importantly, continue active work in Burkina Faso and contribute to social, environmental and community projects
“The board considers that a sale of the project in the present market would not be in the interests of shareholders,” the statement added. “It is the company’s objective to maximise shareholder returns by focusing primarily on high potential exploration projects, and by closely managing the risks and benefits associated with the Perkoa zinc project,” it concluded.