African Mining and Exploration fast-tracks Kossanto project

African Mining and Exploration has announced the implementation of "pivotal" cost-saving strategies "to maximise the shareholder return and exploration activity as [it] fast-tracks its flagship Kossanto gold project in south-west Mali towards defining a maiden resource in 2013".

With a cash position of £1.76 million as at 31 December 2012, and amid "current financing difficulties" amongst the junior exploration sector, the company has implemented "prudent" cash preservation measures, expected to total over £350,000 in the 2013 calendar year.

These include reductions of up to 20% in the cash remuneration paid to the executive management team, including the chief executive officer, with a total cash saving of approximately £165,000 by the end of 2013.

In substitution for the cash remuneration, the company has granted 4.99 million share options with an exercise price of 4.62p, which is at a premium of 0.5p above the company's mid-market share price at close of trading on Thursday 28 February. 2.1 million of these share options have been issued to chief executive Mark Jones.

The performance conditions attached to the share options are that one twelfth of the quantity granted will vest at the end of each month of completed service over the next 12 months.

The share options have an exercise period of five years.

"I am pleased to announce these cost-saving initiatives, which will help ensure our exploration programme remains on track by maximising 'money spent in the ground'," he commented.

"In turn, we remain committed to investing in and exploring additional quality exploration opportunities and utilising the strengths of experienced professionals and partners to deliver significant investment return with managed risk and look forward to reporting on our progress over the coming months."

Investor view

Interactive Investor discussion board user 'Dwarfstar' said: "It seems that they are going to concentrate on Kossanto as … anticipated. It seems like a sensible approach to cut costs and focus on the best prospect."