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Research Alert

Research Alert Thursday 27 July 2006 Stocks covered in this note Stock/sector AIM Resources 3 ,

Thursday 27 July 2006

Stocks covered in this note

Stock/sector

AIM Resources 3,4,5

Analyst

Charles Kernot

FTSE All Share – recent performance

Mkt cap (A$m)

80.6

Recommendation

Buy

Page

2

Contacts

Research Team

Head of Equities

Richard Ratner

richardratner@seymourpierce.com

020 7107 8037

Head of Research

Jim McCafferty

020 7107 8070

jimmccafferty@seymourpierce.com

Deputy Head of Research

Alan Matthews

alanmatthews@seymourpierce.com

020 7107 8021

 

Key Indices

Close

Daily % chge

3150

3100

3150 3100  
 

UK

3050

FTSE 100

5877.1

0.44

3000

2950

   

FTSE All Share

2979.1

0.42

2900

2850

   

FTSE Mid 250

9285.57

0.4

2800

2750

TSE AIM

1036.98

0.58

 

1

8

15

22

29

5

12

19

26

3

10

17

24

MAY FTSE ALL SHAR E - PR IC E IND EX

JUN

JUL

 

Source: D ATASTREAM

 

Source: Datastream

 

Forthcoming In-House events

 

2006

 

Company

 

Event

Analyst

All lunches 12.45 for 1.00 pm – unless otherwise stated. If you wish to attend, please email the relevant analyst.

Please see regulatory disclosure notes at the end of this document

Research Analysts

Derek Brown

derekbrown@seymourpierce.com

020 7107 8068

Gerald Farr

geraldfarr@seymourpierce.com

020 7107 8332

Charles Kernot

charleskernot@seymourpierce.com

020 7107 8069

Kevin Lapwood

kevinlapwood@seymourpierce.com

020 7107 8337

Sav I. Neophytou

savneophytou@seymourpierce.com

020 7107 8034

Charles Peacock

charlespeacock@seymourpierce.com

020 7107 8001

Richard Slape

richardslape@seymourpierce.com

020 7107 8042

Yan Song

yansong@seymourpierce.com

020 7107 8004

Amit Thakar

amitthakar@seymourpierce.com

020 7107 8022

Ian Wild ianwild@seymourpierce.com

020 7107 8089

Research Alert Thursday 27 July 2006

AIM Resources 3,4,5

Metals & Mining

EPCM appointment

AIM Resources has announced the appointment of DRA Mineral Projects as the engineering procurement and construction manager for the processing plant at the Perkoa zinc project in Burkina Faso.

This appointment shows that AIM Resources is serious about developing the project and suggests to us that the group must be close to the completion of its negotiations with potential buyers of its zinc concentrate.

DRA’s scope of work is standard for an engineering, procurement and construction management (EPCM) contract. Within this scope of work DRA will help to optimise the design for the process plant, order long lead- time equipment for the mine and work through to the commissioning of the plant – expected in early 2008.

The contractors will also manage the establishment of all mine and associated infrastructure – including the provision of power and the construction of the tailings management facility.

DRA is an experienced contractor, which was established in 1984. It has built processing plants at a number of different locations in Africa, together with projects on four other continents. Consequently, we believe that it is well qualified to undertake the work necessary to build the plant.

Drilling also commenced at AIM Resources’s Mumbwa iron-oxide copper- gold project in Zambia during May. This drilling was planned to test a range of copper, gold and uranium anomalies by drilling 11 holes amounting to a total length of 5,700m. Results from this drilling should be available later this year.

We reiterate our Buy recommendation on AIM Resources, with a 16p target price, in anticipation of additional newsflow to come from the company over the next few months as it progresses the development of the Perkoa project. Buy.

3,4,5 Please see regulatory disclosure notes at the end of this document

BUY

5.6p

 

AIM AIMR.L

No of shares (m)

590.0

Market cap (A$m)

80.6

Net cash (A$m)

4.5

Enterprise value (A$m)

 

76.1

(%)

1m

3m

12m

FTA relative

+8.1

+8.0

+97.8

12 month high/low (p)

 

8.00/2.25

Next news June quarterly update – July/August

Business Developing the Perkoa zinc project in Burkina Faso and exploration elsewhere in Africa.

www.aimresources.com .au

AIM Resources – rel price performance

AIM RESOURCES (I SE) 27/7/06 9 8 7 6 5 4 3 2 1 A
AIM RESOURCES (I SE)
27/7/06
9
8
7
6
5
4
3
2
1
A
S
O
N
D
J
F
MAMJ
J
AS
OND
J
F
M
AMJ
J
PRICE
PRICE REL. TO FTSE ALL SHARE - PRICE INDEX

Source: DATASTREAM

Source : Datastream

Contact

Charles Kernot Research Analyst 020 7107 8069 charleskernot@seymourpierce.com

Year end

Sales

Pre-tax

Normalised

EPS

PER

DPS

Yield

EV/Sales

EV/EBITDA

June

(A$m)

(A$m)

Net (A$m)

(A¢)

(x)

(A¢)

(%)

(x)

(x)

2005A

0.0

-4.0

-4.0

-0.9

nm

0.0

0.0

nm

nm

2006E

0.0

-4.4

-4.4

-0.8

nm

0.0

0.0

nm

nm

2007E

0.0

-4.5

-4.5

-0.6

nm

0.0

0.0

nm

nm

Key to material interests

1. The analyst has a personal holding of the securities issued by the company, or of derivatives related to such securities.

2. Seymour Pierce Limited or an affiliate owns more than 5% of the issued share capital of the company.

3. Seymour Pierce Limited or an affiliate is party to an agreement with the company relating to the provision of investment banking services, or has been party to such an agreement within the past 12 months. Our corporate broking agreements include a provision that we will prepare and publish research at such times as we consider appropriate.

4. Seymour Pierce or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities for the company within the past 12 months.

5. Seymour Pierce is a market maker or liquidity provider in the securities issued by the company.

Distribution of ratings Our research ratings are defined with reference to the amount by which we expect the absolute return to change over the next 12 months:

Rating

Definition

Buy

Absolute return expected to increase by more than 10%

Outperform

Absolute return expected to increase by between 5% and 10%

Hold

Absolute return expected to change by between -5% and +5%

Underperform

Absolute return expected to decrease by between 5% and 10%

Sell

Absolute return expected to decrease by more than 10%

As at 30 June 2006 the distribution of all our published recommendations is as follows:

 

Proportion of

Proportion of these provided with investment banking services

Rating

recommendations

Buy

33%

61%

Outperform

24%

14%

Hold

28%

26%

Underperform

4%

10%

Sell

5%

0%

Important Notes

Our research recommendations are issued and approved for distribution within the United Kingdom by Seymour Pierce Limited only to market counterparties and intermediate customers as defined under the FSA rules. Our research is not directed at, may not be suitable for and

should not be relied upon by any other person. The information contained in our research is compiled from a number of sources and is believed to be correct, but cannot be guaranteed. It

is not to be construed as an offer, invitation or solicitation to buy or sell any securities of any of

the companies referred to within it. All statements made and opinions expressed are made as at the date on the face of the material and are subject to change without notice. Where prices of securities are mentioned, these are the mid-market prices as at the close-of-business on the business day immediately preceding the date of the research. The meanings of our research ratings, together with the proportion of our recommendations issued during the previous quarter carrying each rating, is set out on our website at www.seymourpierce.com. Seymour Pierce Limited and/or its associated companies and ultimate holding company may from time-to-time provide investment or other services to, or solicit such business from, any of the companies referred to in research material. In addition, they and/or their directors and employees and/or any connected persons may have an interest in the securities of any of the companies in the report and may from time-to-time add to or dispose of such interests. Details of the significant conflicts relating to the companies that we research are set out on our website www.seymourpierce.com, together with a summary of our policies for managing conflicts of interest. Seymour Pierce does not meet all of the FSA standards for managing conflicts of interest, as a result our research should not be regarded as an impartial or objective assessment of the value or prospects of its subject matter, though of course we will always ensure that it remains clear, fair and not misleading.

Seymour Pierce Limited is authorised and regulated by the Financial Services Authority, and is

a member of the London Stock Exchange.

Seymour Pierce

Bucklersbury House

Switchboard: 020 7107 8000

www.seymourpierce.com

Limited

3 Queen Victoria Street London EC4N 8EL

Corporate Finance fax: 020 7107 8100 Research + Sales fax: 020 7107 8102