African Aura Mining (LON:AAAM, CVE:AUR) told investors that it already has the backing of 40 percent of the group’s shares for its proposed split.
The diversified mine development group has been talking about the split for some time now. But for the uninitiated it plans to split into two separate companies, named Afferro Mining and Aureus Mining, which will focus on iron ore and gold respectively.
A special meeting of shareholders will be held on 5 April 2011, where a vote will be held. The proposal needs at least two thirds of the votes to be passed.
After meetings with institutional investors, and counting the shares held by its directors, African Aura said it already has in excess of 40 percent of the votes.
"This is extremely encouraging in terms of voting prior to next Tuesday's special meeting and reiterates the compelling case and rationale for the split to create focused commodity plays,” chief executive Luis da Silva said.
“In the last four months, the company has met with a significant number of shareholders as well as many potential investors and the sentiments have been consistent in supporting the split.
“We look forward to a positive vote on the arrangement and beyond that delivering on our commitment to creating value for our shareholders."
Plans for the split were first aired back in August 2010. The newly formed gold company, named Aureus Mining, will acquire the African Aura gold project portfolio, its 22.1 percent stake in Stellar Diamonds (LON:STEL) and 40 percent of the group’s cash and cash equivalents.
Aureus’ most advanced asset will be the 1.5 million ounce New Liberty gold project, where a definitive feasibility study is on track for the fourth quarter of 2011.
Subsequently the remaining company, which will house the iron ore projects including Putu in Liberia and Nkout in Cameroon, will be renamed Afferro Mining.
Afferro Mining will retain the group’s remaining cash and cash equivalents.