African Aura Mining is a new name in the resources sector on the London stock market. But its history is a much longer one - the group was created through the merger of Mano River Resources and African Aura Resources in October 2009. Mano River had iron, gold and diamonds exploration prospects in Sierra Leone, Liberia and Guinea, while African Aura had licences in Cameroon and Liberia.
The company is now focusing on the development of the more advanced stage assets in Liberia and Cameroon, particularly the Putu iron ore prospect and New Liberty gold deposit. Management points out that Liberia and Cameroon are world class iron ore provinces, with existing mines at at Mbalam (close to Nkout), Goe & Fantro, Bong, Wologisi and Simandou [1] .
Chairman David Netherway has in depth experience of West African mining - he built three gold mines in the region, and heads up Shield Mining; CEO Luis de Silva is a mining engineer though his experience is in aggregates rather than metals (he put in time with Blue Circle and Lafarge). Independent directors add links with a number of resources sector names to conjure with, including Afren, Aquarius Platinum, and Tianshan Goldfields.
The Putu iron ore project, in Liberia, is a joint venture with Russian iron producer Severstal, which holds 61.5% and is the operator. Severstal offers a couple of key advantages as a partner; first, it has experience of mining this type of low grade iron ore resource, and secondly, it has the capital to fund extensive capital expenditure requirements. (The capital costs are expected to be over £1bn, including port facilities and a railway line as well as the mine operation itself [2] . But the operational cost of production should be quite low, as this is a classic open pit prospect.) Severstal will be spending USD 30m just to get to the stage of a bankable feasibility study [3] .
In October, AAAM filed its technical report on the Putu iron ore project in Liberia. This showed a mineral resource of 1.08 billion tonnes of ore, at 37.6% total iron - and the estimate covered only a 2.6 km section of a ridge that extends in full length to over 12 km. The company is targeting what it believes is a 5 billion tonne iron ore resource, and will complete a…
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