AMF raises $1.8 million (May 22, 2003)

London-based America Mineral Fields (AMZ-T) has completed a private placement of 4 million units priced at 45 each, for gross proceeds of $1.8 million.

Each unit is comprised 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.

The net proceeds, after the payment of a 5% finder’s fee, will fund the continued development of the company’s African projects and for general working capital.

AMF’s primary focus is its Kolwezi cobalt-copper tailings project in the Democratic Republic of Congo, where total 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, 2003).

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

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

In recent months, AMF has been trying to renegotiate with state-owned Gecamines the terms of their current agreement at Kolwezi, which sees the two splitting ownership 60-40, respectively, with the latter being a carried interest. AMF is offering to give up a tax holiday in return for a larger equity position.

The company also has its Kipushi zinc-mine project in the DRC and plans to resume work at its alluvial diamond prospects in Angola’s Cuango River region.

AMF shares have been on a tear of late, rising off a long-term bottom of around 40 to trade at 59 on May 22. Trading volume, though, has been low.