Quarterly Activities Review

    RNS Number : 9265G
  AIM Resources Limited
  29 October 2008
   

    AIM RESOURCES LIMITED 
    (the "Company" "AIM Resources")

    29 OCTOBER 2008

    QUARTERLY ACTIVITIES REVIEW
    for the period ended 30 September 2008


    *    KEY ISSUES

    PERKOA (AIM Resources 90%)
    *     Care and Maintenance program implemented at Perkoa Zinc Mine
    BURKINA FASO EXPLORATION (AIM Resources 100%)
    *     VTEM results received for permit areas surveyed 
    MUMBWA (AIM Resources 50%)
    *     Terms of revised JV Agreement negotiated with 50% JV Partner BHP Billiton
    *     Completed Phase 3 drilling requirements for Mumbwa JV venture
    *     Drilling results received for six of the 18 cored holes
    CORPORATE
    *     Mr Scott Lowe appointed Managing Director
    *     Ms Nicole Bowman appointed Non-executive Director
    *     North Sound agreed to terminate litigation seeking to access the books and records of the Company
    *     Litigation commenced against the former Managing Director in respect of alleged breaches of duties as a director
    *     Cash on hand at 30 September 2008 of $34.9 million
    * PERKOA ZINC PROJECT, BURKINA FASO (AIM Resources 90%)
    Perkoa Care & Maintenance Program
    On 17 July 2008, the Company announced it would place the Perkoa Zinc Project in Burkina Faso in care and maintenance until further
notice. The decision to put the project on care and maintenance was made based on a detailed analysis of alternative funding options and
current economic factors, including the depressed global zinc price.
    Mining Contractor Byrnecut Mining Pty Ltd, EPCM contractor DRA Mineral Projects and earthmoving contractor Banlaw Africa Ltd have all
demobilised. A number of the long lead-time process plant items have been delivered to site. Work on completing the foundations for the
plant will continue over the next nine months.
    The care and maintenance program is now implemented and is estimated to cost approximately USD30,000 per month. This cost will cover
labour and materials necessary to ensure the safety and security of the assets on site at the Perkoa Zinc Mine, and to conduct routine
maintenance to ensure machinery and equipment are kept in a satisfactory condition for future use. 
    Recommencement of construction at the Perkoa Zinc Mine will be subject to suitable financing being available and a stronger zinc price
outlook. The Company continues to evaluate suitable funding options.  
    The Company will also continue to uphold commitments made regarding social and community program in Burkina Faso. 
    *    EXPLORATION  - BURKINA FASO (AIM Resources 100%)
    VTEM Survey Results
    During the quarter, the Company received results from the Versatile Time-domain Electro Magnetic (VTEM) survey conducted over the Perkoa
lease and surrounding exploration permits, Poa and Guido.
    An interpretation of the VTEM data by Condor Consulting Inc. identified nine high priority targets from 46 target zones which are
prospective for further follow up exploration work. 
    An exploration program for 2008/2009 has been developed that takes into account the VTEM results and independent expert geologist
report, as well as historical work and data.
    * MUMBWA JOINT VENTURE PROJECT, ZAMBIA (AIM Resources 50%)
    Joint Venture Agreement
    On 5 August 2008, the Company announced that it had successfully negotiated the terms for a revised JV Agreement with 50% JV partner BHP
Billiton. A number of changes have been agreed to the operational and commercial arrangements for the benefit of the project and the JV
partners.  
    The original agreement between AIM Resources and BHP Billiton was signed in 2004 and involved AIM Resources fully funding the first
three phases (exploration work) of a five phase program, in order to earn a 70% interest in the project.
    BHP Billiton retained an option to fully fund the final two phases (Pre-feasibility and Feasibility Studies). In doing so BHP Billiton
would earn back an additional 20% and 30% respectively, leading ultimately to a JV where BHP Billiton would hold 80% and AIM Resources 20%.
Each party would then share in future project costs and benefits on a pro-rata equity basis.
    Under the agreed terms of the revised JV Agreement, two new phases are introduced:

(i)                  An additional drilling phase to be introduced after AIM Resources has completed its Phase 3 drilling program, which has
been reduced from 10,000 metres of drilling to 8,000 metres.
If BHP Billiton elects to fully fund this additional drilling phase, then AIM Resources will be paid USD1.1 million in exchange for an early
vesting of 10% equity to BHP Billiton.
(ii)                An additional Concept Study phase to be introduced in advance of the Pre-feasibility Study phase.
If BHP Billiton elects to proceed and fully fund this Concept Study then, following successful completion, it will earn an additional 20%
equity taking it to 60% equity in the JV. If BHP Billiton then elects to proceed further, AIM Resources will be paid 150% of its actual
costs incurred for the project, less the USD1.1 million paid earlier.
If BHP Billiton elects not to pay this amount and not proceed beyond the Concept Study, it will be required to assign its interest to AIM
Resources, resulting in AIM Resources holding 100% and BHP Billiton will retain a production royalty.
    
    2008 - Phase 3 Drilling Program
    On 15 September 2008, the Company announced that it had achieved its drilling target of 8,000 metres under the Phase 3 drilling program
of the Mumbwa JV venture.
    The 8,000 metres of drilling under the Phase 3 drill program entailed 18 cored holes, and sampling and analysis of these holes is
currently being processed. To date the Company has received and announced drilling results for six holes (S36-007, S36-009, S36-010,
S36-014, S36-015 and S36-016). Details of these drill hole locations and drill results are available on the Company's website
www.aimresources.com.au .
    BHP Billiton has not yet elected to commence sole funding the next drilling phase (Phase 3B), and will not be required to make an
election until AIM Resources has confirmed that Phase 3 has been completed, including provision of all assay data for the initial 8,000
metres.
    However, BHP Billiton has assumed responsibility for drilling operations and has mobilised key staff to oversee all activities
associated with drilling, sampling and analysis beyond the 8,000 metres, until the election can be made.

    * MOKOPANE PROJECT, SOUTH AFRICA (AIM Resources 74%)
    No work has been carried out on this project during the quarter.
    The Company awaits confirmation from the Department of Minerals and Energy that the application for renewal of the New Order Prospecting
Rights, lodged with the Department in March 2008, has been granted.

    * CORPORATE
    Board Changes
    On 1 August 2008, Mr Scott Lowe, the current Chief Executive Officer, was appointed Managing Director of the Company. This appointment
was contemplated when Mr Lowe was appointed Chief Executive Officer of the Company in June this year. Mr Bill Cash, who had been Acting
Managing Director of the Company since January 2008, continues on the Board as an executive Director.  
    Subsequent to the quarter-end, Ms Nicki Bowman was appointed a non-executive Director of the Company on 8 October 2008. Ms Bowman comes
to the Company with extensive experience as a corporate and commercial lawyer in private practice, as well as having held senior corporate
counsel roles in BHP and Blue Scope Steel before moving into senior management and executive positions.
    North Sound Litigation
    On 2 July 2008, the Company announced that North Sound Legacy International Ltd (North Sound) had agreed to end the litigation that it
had instigated in December 2007 against AIM Resources, seeking access to certain books and records of the Company.  
    Litigation Against Former Managing Director
    On 23 July 2008, the Company announced that it had commenced proceedings in the Supreme Court of New South Wales against Mr. Marc Flory,
a former Managing Director of the Company, together with other parties, in respect of alleged breaches of duties while a director of the
Company. 
    Available Cash Funds
    As at 30 September 2008, the Company had a cash position of $34.9M (USD24M). 
    Based on the latest estimate of outstanding cost commitments to be paid in relation to the "ramp down" phase for the Perkoa Zinc Mine
(expected to be completed in November 2008), the Company forecasts that it will have approximately USD15M available to it for on-going
operational, care and maintenance, community and social programs and exploration activities. The "ramp down" phase costs include payment for
the delivery of long lead-time items and other goods and cancellation costs of some contracts, as well as provision for costs to complete
foundations work for the plant, which will be undertaken over the next nine months.

    Annual General Meeting
    The Annual General Meeting of the Company is to be held on Monday, 24 November 2008, at the Sheraton On The Park Hotel, Sydney. The
Notice of Meeting was mailed to all registered shareholders on the 24th October and a copy is available on the Company's website
www.aimresources.com.au. Shareholders who are not able to attend the Annual General Meeting in person are urged to complete and lodge a
proxy form as soon as possible, but no later than the 22 November 2008.


    Should you require further information please contact:

    Scott Lowe
    Managing Director
    Ph: + 61 2 9357 9000

    Fiona Owen
    Grant Thornton UK LLP
    Ph: +44 20 7383 5100





    www.aimresources.com.au


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
MSCILFLLIVLAFIT
Aim Res. (LSE:AIMR)
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