* In advanced talks with ENRC, Asian firms
* Discussing possible takeover offer, project funding
* Funding would develop iron ore mine in Sierra Leone
* China and Brazil also shown interest
* Shares rise to a record, value company at $1.37 bln
(Adds comments from African Minerals CEO, ENRC, background)
By Julie Crust and Eric Onstad
LONDON, Sept 17 (Reuters) - African Minerals said it is in advanced talks with Kazakh miner ENRC and several large Asian industrial firms who are considering a takeover or funding for its Tonkolili iron ore mine.
Shares in the London-listed miner soared as much as 14 percent to a record 389.75 pence after Thursday's announcement, valuing the company at $1.37 billion. The shares have risen 17-fold this year.
"The discussions that we have had up until recently have been around them (ENRC) taking a position," African Minerals Chief Executive Alan Watling told Reuters later in an interview, adding that it would not be a controlling stake.
ENRC could buy up to 29.9 percent of African Minerals before being forced to make a full takeover under AIM rules.
On July 10, Reuters reported that ENRC was considering an offer for African Minerals, whose Chairman Frank Timis holds about 20 percent of the shares and is also the founder of Regal Petroleum.
The company has also attracted interest elsewhere and is keen to find investors to help fund the $2.7 billion Tonkolili iron ore project in Sierra Leone, which it bills as the world's third-largest magnetite iron ore resource.
A Chinese consortium is carrying out due diligence on African Minerals and "a Brazilian organisation" has also shown interest, although Watling declined to specify whether the Brazilian group was Vale, the world's biggest iron ore producer. Watling said African Minerals is looking to move from the junior AIM market to the official list on the London Stock Exchange within the next 6-12 months and that this move would be irrespective of any deal with ENRC.
The news came one day after ENRC said it was considering a cash takeover bid worth $950 million for another AIM-listed African-focused miner, Central African Mining and Exploration Co. (CAMEC).
ENRC said it was looking at a range of opportunities, including diversification into Africa, but at this time its focus is the possible transaction with CAMEC.
ENRC, which had gross available funds of $2.0 billion at the end of June, could find itself tightly stretched if it tried to acquire both African-focused companies.
TONKOLILI
African Minerals said last month that Tonkolili contained an estimated 5.1 billion tonnes of iron ore and that the northern section of the licence area indicates the potential to increase the iron ore magnetite resource to about 10 billion tonnes.
The next resource estimate is due in December/January.
Watling said the Tonkolili project has probably been delayed several weeks because of the time spent on due diligence. The project is now expected to start production in late 2013 or early 2014.
The company expects Tonkolili to become the largest iron ore producer in Africa and one of the lowest cost producers.
A definitive feasibility study is due to be finished next March/April which would firm up capital expenditure costs of the project that are currently estimated at about $2.7 billion.
Watling, who joined African Minerals in February, has experience of bringing large iron ore projects into production. Until last November he was chief operating officer at Fortescue Metals Group a company that went from having no ore body to becoming the world's fourth-largest iron ore producer in less than six years. (Editing by Elaine Hardcastle)