African Aura Mining Inc. - UPDATE ON PROPOSED SPLIT INTO SEPARATE IRON AND GOLD COMPANIES

/NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES./

TSX-V:   AUR
AIM:  AAAM

LONDON, Feb. 28 /CNW/ - African Aura Mining Inc. ("African Aura" or the "Company"), the TSX-V (AUR) and AIM (AAAM) listed exploration and development company with divisions focused on iron ore and gold projects in sub-Saharan Africa, announces that, further to its press release dated November 5, 2010, it has entered into an arrangement agreement (the "Arrangement Agreement") with Aureus Mining Inc. ("Aureus Mining") to complete a restructuring of its assets by way of a court and shareholder approved plan of arrangement (the "Arrangement").

Certain key points relating to the Arrangement:

  • African Aura Mining Inc. to be renamed Afferro Mining Inc. to develop the iron portfolio

  • Aureus Mining Inc. to develop the gold portfolio

  • EGM scheduled to take place on 5th April 2011

  • Effective date of the Arrangement expected to be 13th April 2011

Pursuant to the Arrangement Agreement, African Aura and Aureus Mining have agreed to complete the Arrangement, and in connection therewith, the interest of African Aura in its gold assets (including the New Liberty Gold Project in Liberia), approximately 22.1% of the outstanding ordinary shares of Stellar Diamonds plc and cash and cash equivalents equal to 40% of African Aura's total cash balance as at the effective time of the Arrangement (the "Effective Time") will be acquired by Aureus Mining. Pursuant to the Arrangement, each shareholder of African Aura will be entitled to receive one new common share of African Aura and one common share of Aureus Mining for each common share of African Aura held by such shareholder at the Effective Time. Upon completion of the Arrangement, African Aura will be renamed "Afferro Mining Inc." and will continue to hold its iron ore projects, which include the Putu Project in Liberia and the Nkout Project in Cameroon, and will retain the remainder of its cash and cash equivalents.

The completion of the Arrangement is conditional upon, among other things, approval by at least two-thirds of the votes cast by the shareholders of African Aura thereon at a meeting called for such purpose, approval of the Supreme Court of British Columbia, receipt by African Aura of an advance income tax ruling from the Canada Revenue Agency ("CRA"), or alternative confirmation in form and substance satisfactory to African Aura, with respect to the tax consequences of the Arrangement, and receipt of all other required regulatory and third party consents and approvals required in connection with the Arrangement, including for the transfer by African Aura of its gold assets to Aureus Mining.

The completion of the Arrangement is also conditional upon, among other matters, the Toronto Stock Exchange (the "TSX") having conditionally approved the listing thereon of the Aureus Mining common shares to be received by African Aura's shareholders pursuant to the Arrangement, subject only to compliance with the usual requirements of the TSX.  Application will also be made to the AIM market of the London Stock Exchange ("AIM") for the admission thereon of the Aureus Mining common shares, which admission will be subject to, among other things, Aureus Mining satisfying the admission requirements of AIM.

African Aura has scheduled a meeting of its shareholders for April 5, 2011, at which shareholders of record on February 25, 2011 will consider, among other matters, the Arrangement. Meeting materials will be mailed and are expected to be available on SEDAR (www.sedar.com) under African Aura's profile on or about March 4, 2011 and will be available on the Company's website (www.african-aura.com).

About African Aura Mining Inc.
African Aura is an established exploration and development company listed on the TSX-V (AUR) and London's AIM (AAAM). The Company operates two divisions that are intended to be split into separate listed companies becoming effective, subject to shareholder, regulatory and other approvals in April 2011:

  • The iron ore division includes its 38.5% interest in the 2.4Bt Putu iron ore project in Liberia, which is subject to a resource expansion drilling programme and moving through pre-feasibility managed by joint venture partner Severstal Resources (the mining division of London and Moscow listed OAO Severstal). In September 2010, Putu was granted a 25 year renewable Mineral Development Agreement by the Government of Liberia. The division also includes a 100% interest in the Nkout 1Bt iron ore project and surrounding iron targets in Cameroon which is subject to a resource expansion drilling programme.

  • The gold assets, to be held in "Aureus Mining Inc." when listed independently, include the New Liberty gold deposit in western Liberia which has a resource of 1.51 million ounces of gold grading 3.78 g/t (comprising 5,599,000 tonnes grading 4.17 g/t in the indicated category and 7,040,000 tonnes grading 3.40 g/t in the inferred category) which is being advanced through a bankable feasibility study, and the proximal Ndablama, Weaju, Silver Hills and Gondoja gold projects all within the Company's Bea Mountain 25 year renewable Mineral Development Agreement.

In addition, the Company has a 22% interest in AIM-listed diamond producer Stellar Diamonds Plc (AIM: STEL, www.stellar-diamonds.com).

The Company has a highly motivated and experienced team with a track record of discovering mines and taking projects through development and into production. As a pioneer, African Aura has attracted some excellent strategic partners and shareholders, always with the objective of preserving or enhancing shareholder value. For further information on the Company you are invited to visit its website at www.african-aura.com, or SEDAR's website at www.sedar.com, or contact one of the following:

African Aura Mining Inc.
Luis da Silva, President & CEO
Tel: +44 (0) 20 7257 2930

Evolution Securities Limited
Rob Collins / Tim Redfern
Tel: +44 (0) 20 7071 4300

Pelham Bell Pottinger
Charles Vivian / James MacFarlane
Tel: +44 (0) 20 7861 3232

Forward-Looking Information
This press release contains certain forward-looking information. All information, other than information regarding historical fact, that addresses activities, events or developments that the Company believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this press release includes, but may not be limited to: the future plans and objectives of African Aura, including the completion of the proposed Arrangement and the terms, timing and consequences relating thereto; the listing and admission on the TSX and AIM, respectively, of the Aureus Mining common shares to be received by African Aura shareholders in connection with the Arrangement; the timing of the shareholders meeting to consider the Arrangement; and statements relating to the application for an advance income tax ruling from the CRA. The foregoing and other forward-looking information contained in this press release reflects the current expectations, assumptions or beliefs of African Aura based on information currently available to African Aura. With respect to the forward-looking information contained in this press release, African Aura has made assumptions regarding, among other things: general business, economic and mining industry conditions; the completion of the Arrangement, including the receipt of all necessary approvals to proceed therewith; the Company's ongoing exploration and development activities; and it has also been assumed that no material adverse change in the price of precious and/or base metals occurs and no significant events occur outside of African Aura's normal course of business.

Such forward-looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: delays in obtaining, or a failure to obtain, required regulatory approvals (including the approval of the TSX and AIM with respect to the listing and admission, respectively, of the Aureus Mining common shares to be received by African Aura's shareholders as part of the Arrangement); the Company's inability to complete the Arrangement or obtain a favourable confirmation from the CRA regarding the tax consequences of the Arrangement; risks normally incidental to exploration and development of mineral properties; adverse changes in precious and/or base metal prices; and future unforeseen liabilities and other factors including, but not limited to, those listed under "Risk Factors" in the Company's Annual Information Form dated April 30, 2010 available under the Company's profile on SEDAR at www.sedar.com.

Forward-looking information speak only as of the date on which it is made and, except as may be required by applicable law, African Aura disclaims any obligation to update or modify such forward-looking information, either as a result of new information, future events or for any other reason.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this release.

SOURCE African Aura Mining Inc.

For further information:

AfricanAura Mining Inc.
Luis da Silva, President & CEO
Tel: +44 (0) 20 7257 2930

Evolution Securities Limited
Rob Collins / Tim Redfern
Tel: +44 (0) 20 7071 4300

PelhamBell Pottinger
Charles Vivian / James MacFarlane
Tel: +44 (0) 20 7861 3232

Organization Profile

African Aura Mining Inc.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890