Afferro Mining Inc. - Update on discussions with Imic

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TSX-V: AFF
AIM: AFF

TORONTO, April 17, 2013 /CNW/ - Afferro Mining Inc. ("Afferro" or the "Company"), the exploration and development company focused on iron ore in Cameroon, notes today's announcement made by International Mining and Infrastructure Corporation plc. ("IMIC") regarding a potential offer for the entire issued and to be issued share capital of the Company.

The potential offer is subject to a number of pre-conditions including, but not limited to:

• successful raising of finance for the transaction;
• completion of documentation required to enact a reverse takeover under the AIM Rules for the London Stock Exchange plc ("RTO"); and
• negotiation of an arrangement agreement.

Under the IMIC proposal Afferro shareholders would be given three options for receiving consideration in respect of their shares, namely:

• 80p in cash plus a convertible loan note of 20p, making a total of 100p for each Afferro share; or
• 50p in cash plus a convertible loan note of 70p, making a total of 120p for each Afferro share; or
• Shares in IMIC equivalent to a valuation of 140p for each Afferro share

The cash portion in the above options will be subject to a limit of US$100 million. The convertible loan notes will carry a coupon of 8%, rolled up and paid at the end of the 24 month duration of the loan notes or on conversion into IMIC shares.

IMIC has advised the Company that, within 15 business days at the latest, it intends to provide written undertakings that the minimum US$100 million cash is available to execute the above proposal. IMIC has also advised that further fund raising is planned at the time of IMIC's RTO, in order to leave the combined group with an appropriate level of cash to undertake the further development of the 100% owned Nkout, Ntem and Akonolinga iron ore projects as well as the 70% held Ngoa project.

Afferro CEO Luis da Silva said:

"The proposed IMIC offer announced today is an endorsement of the strong progress that Afferro has made to develop a portfolio of strategically located iron ore projects in Cameroon. Metallurgical test work at Nkout has shown that a premium quality concentrate can be produced at a lower cost of production than initially anticipated. In addition, Nkout's resource can support a long mine life, highlighting the considerable value that the Afferro team has been able to build.

We are encouraged to see continued strong industry interest in Afferro and will continue to investigate options as they are presented with shareholders' interests always at the centre of everything we do. The update on the IMIC discussions is a development that should be viewed positively especially in respect of the Chinese consortium that IMIC has assembled to address the iron ore infrastructure requirements of the Nkout project. We look forward to further information in the near term so that any eventual process may be further clarified. 

The Board of directors does not believe that an informed decision can be taken by the Company until such time as a more formal offer and satisfactory confirmation from IMIC's financial advisers, is received. As such, Afferro advises shareholders that no action should be taken at present and the Company looks forward to further updating the market within 15 business days."

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, Ntem and Akonolinga iron ore projects.  It also holds a 70% interest in the Ngoa project, an exploration target bordering Nkout.  Nkout comprises a National Instrument 43-101 ("NI 43-101") compliant Indicated Mineral Resource Estimate of 1.19Bt at 32.9% Fe and an Inferred Mineral Resource Estimate of 1.33Bt at 30.3% Fe. The Company had cash, cash equivalents and short-term deposits totaling $89m on the 31^st December 2012.

Qualified Person

Howard Baker (MAusIMM(CP)) has 18 years' experience in the mining industry and 10 years' experience in the exploration, definition and mining of iron ore mineral resources. Mr 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 National Instrument 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 matters relating to the geology, exploration results and mineral resources in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

Forward-looking Statements

This announcement includes certain forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements that involve various known and unknown risks and uncertainties as well as other factors. Such forward looking statements are subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including delays in obtaining or failure to obtain required regulatory approvals. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Information about the risks and uncertainties of the Company's business is provided in its disclosure materials, including its Annual Information Form and the MD&A for the 12 months ended 31 December 2011, available under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actions, events or results to differ materially from those described in forward looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information contained herein, speaks only as of the date hereof (unless stated otherwise) and, except as may be required by applicable law, Afferro disclaims any obligation to update or modify such forward-looking statements, either as a result of new information, future events or for any other reason.

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.

SOURCE Afferro Mining Inc.