Afferro signs definitive sale and purchase agreement to divest interest in the Putu Iron Ore Project for a minimum of US$115 million cash consideration
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES./
TSX-V: AFF
AIM: AFF
LONDON, UK, Dec. 23, 2011 /CNW/ - Further to the announcement of 12 December 2011, Afferro Mining Inc. ('Afferro' or the 'Company'), a TSX-V / AIM listed exploration and development company is pleased to announce that Afferro and its wholly owned subsidiary, Mano River Iron Ore Holdings Limited ('Mano'), have entered into a definitive Sale and Purchase Agreement (the 'SPA') with Lybica Holdings B.V. ('Lybica'), an affiliate of ZAO Severstal Resources ('Severstal'), for the sale of its 38.5% interest in the Putu iron ore project in Liberia ('Putu') (the 'Transaction'). Lybica currently holds the remaining 61.5% interest in Putu.
Transaction Key Terms:
-- Afferro to receive a cash payment of US$65 million on
completion;
-- Afferro's right to request a deferred payment of US$50 million
cash;
-- Potential additional consideration should Putu be sold to a
third party;
-- Afferro released from any further capital contribution to fund
Putu from 1 January 2012;
-- Transaction subject to shareholder and regulatory approvals;
-- Funds will be used to accelerate the Company's development
strategy for its 100% owned Nkout iron ore project in Cameroon;
and
-- Proceeds will enhance Afferro's negotiating position in
attracting a strategic partner for Nkout.
Detailed commercial terms of the Transaction are set out in the announcement released on 12 December 2011.
No revenue is attributable to Putu as the project is not in production. As at 30 November 2011, the Company had accounted for a carrying value for the Putu Project of US$22.2 million.
Timing and next steps:
Approval from shareholders and the TSX-V is, inter alia, a condition of the SPA and will be required in order to complete the sale transaction. An information circular setting out the details of the transaction and the notice of the special meeting of shareholders will be sent to the Company's shareholders in due course.
The anticipated timetable of principal events relating to the Transaction is as follows:
_____________________________________________________________________
|Record date to establish |28 December 2011 |
|entitlement to attend and vote at | |
|the Special Meeting | |
|___________________________________|_________________________________|
|Publication and Posting of the |9 January 2012 |
|Circular to Shareholders | |
|___________________________________|_________________________________|
|Latest time for receipt of Form of |26 January 2012 at 11.00 a.m. GMT|
|Instruction for Depositary Interest| |
|holders for the Special Meeting | |
|___________________________________|_________________________________|
|Latest time for receipt of Form of |27 January 2012 at 11.00 a.m. EST|
|Proxy for Shareholders for the | |
|Special Meeting | |
|___________________________________|_________________________________|
|Afferro Special Meeting |31 January 2012 at 11.00 a.m. GMT|
|___________________________________|_________________________________|
|Closing of Transaction |By 28 February 2012 |
|___________________________________|_________________________________|
About Afferro Mining Inc.
Afferro is an established exploration and development company listed on the TSX-V (AFF) and AIM (AFF). Afferro's portfolio includes the 100% owned Nkout iron ore project and surrounding iron ore targets in Cameroon. At Nkout, Afferro has an NI 43-101 compliant indicated mineral resource estimate of 944Mt at 32.7% Fe and an inferred mineral resource estimate of 1.05Bt at 31.6% Fe. Afferro currently has a 38.5% interest in the Putu iron ore project in Liberia, which it is currently intending to sell to Severstal, the Company's joint venture partner, under the binding heads of terms agreed between the Company and Severstal.
Qualified Person
Howard Baker has some ten years' experience in the exploration, definition and mining of iron ore Mineral Resources. Howard Baker is a full-time employee of SRK Consulting (UK) Ltd, an independent Consultancy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Qualified Person in accordance with NI 43-101 and a Competent Person as defined in the June 2009 Edition of the AIM Note for Mining and Oil & Gas Companies. Howard Baker consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Afferro Mining Inc.
CONTACT: For further information please see the Company's web site
at www.afferro-mining.com or contact one of the following:
Afferro Mining Inc.
Luis da Silva / Bevan Metcalf /Jeremy Cave
Tel: +44 (0) 20 7257 2930
Evolution Securities Limited
Nominated Adviser: Neil Elliot / George Price
Corporate Broker: Chris Sim
Tel: +44 (0) 20 7071 4300
RBC Capital Markets
Joint Broker: Martin Eales / Richard Hughes
Tel: +44 (0) 20 7653 4000
Pelham Bell Pottinger
Charles Vivian / James MacFarlane
Tel: +44 (0) 20 7861 3232
