Research Alert

Thursday 27 July 2006
Stocks covered in this note Stock/sector Analyst Mkt cap (A$m) Recommendation Page Contacts Research Team Head of Equities Richard Ratner 020 7107 8037 Head of Research Jim McCafferty 020 7107 8070 Deputy Head of Research

AIM Resources 3,4,5

Charles Kernot




FTSE All Share – recent performance
3150 3100 3050 3000 2950 2900 2850 2800 2750 1 8 15 22 29 5 MAY FT SE ALL SHAR E - PR IC E IND EX 12 19 J UN 26 3 10 17 J UL 24

Alan Matthews 020 7107 8021 Key Indices UK FTSE 100 FTSE All Share FTSE Mid 250 TSE AIM Close Daily % chge Research Analysts Derek Brown 020 7107 8068 Gerald Farr 020 7107 8332 Charles Kernot 020 7107 8069 Kevin Lapwood 020 7107 8337 Sav I. Neophytou 020 7107 8034 Charles Peacock 020 7107 8001 Event Analyst Richard Slape 020 7107 8042 Yan Song 020 7107 8004 Amit Thakar 020 7107 8022 Ian Wild 020 7107 8089

5877.1 2979.1 9285.57 1036.98

0.44 0.42 0.4 0.58


Source: Datastream

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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 Alert Thursday 27 July 2006

AIM Resources
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 leadtime 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 coppergold 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.

BUY 5.6p

No of shares (m) Market cap (A$m) Net cash (A$m) Enterprise value (A$m) (%) FTA relative 1m +8.1 3m +8.0

590.0 80.6 4.5 76.1 12m +97.8 8.00/2.25

12 month high/low (p)

Next news June quarterly update – July/August Business Developing the Perkoa zinc project in Burkina Faso and exploration elsewhere in Africa. .au AIM Resources – rel price performance
AIM RE S OURCE S (I S E) 9 27/7/06










Source : Datastream

Contact Charles Kernot Research Analyst 020 7107 8069

Please see regulatory disclosure notes at the end of this document

Year end June

Sales (A$m)

Pre-tax Normalised (A$m) Net (A$m)

EPS (A¢)

PER (x)

DPS (A¢)

Yield (%)

EV/Sales (x)


2005A 2006E 2007E

0.0 0.0 0.0

-4.0 -4.4 -4.5

-4.0 -4.4 -4.5

-0.9 -0.8 -0.6

nm nm nm

0.0 0.0 0.0

0.0 0.0 0.0

nm nm nm

nm nm nm

Source: Seymour Pierce Limited full year estimates

Seymour Pierce Research


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 Buy Outperform Hold Underperform Sell Definition Absolute return expected to increase by more than 10% Absolute return expected to increase by between 5% and 10% Absolute return expected to change by between -5% and +5% Absolute return expected to decrease by between 5% and 10% 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 recommendations 33% 24% 28% 4% 5% Proportion of these provided with investment banking services 61% 14% 26% 10% 0%

Rating Buy Outperform Hold Underperform Sell

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