West African Iron Ore announces an additional funding agreement and provides corporate update

TSX VENTURE EXCHANGE: WAI

VANCOUVER, May 24, 2013 /CNW/ - West African Iron Ore Corp. (TSX-V: WAI) West African Iron Ore Corp. ("WAI" or the "Company") is pleased to announce that it has arranged a CAD$2.0 million unsecured convertible debenture financing agreement with Sky Alliance Resources Inc. ("SARI").

SARI has agreed to finance up to CAD$2.0 million by way of up to four drawdowns of CAD$500,000.  Each drawdown will be in the form of a convertible debenture (collectively the "Debentures") with a term of 5 years and an 8% annual interest rate. During the term of the Debentures, SARI will have the option to convert all or any portion of the outstanding Debentures into common shares of the Company at a conversion price of CAD$0.10 per share for the first CAD$500,000 drawdown.  All other drawdowns will have the option to convert any portion of the outstanding Debentures at the market price at the time of drawdown, subject to a minimum conversion price of CAD$0.10 per share. Subject to TSX-V approval, the remaining CAD$1.5 can be drawn down at WAI's election after completion of a resource report in a form prescribed by National Instrument 43-101 with respect to the Forécariah tenement. WAI will provide written notice to SARI of the requirement for funding and set forth the amount required.

Management believes the current financing agreement will be sufficient to fund the Company's operations through the release of its initial NI43-101 technical report and until additional longer-term funding sources can be arranged.

SARI has ownership and control, directly and through a wholly-owned subsidiary, of 24,697,000 common shares of WAI, representing 14.09% of the issued and outstanding common shares of the Company. The first draw down of the debenture is convertible into 5,000,000 common shares of WAI.  Assuming conversion of the debenture, SARI would have ownership and control of 29,697,000 common shares, representing 16.49% of the then issued and outstanding common shares of WAI.  SARI has acquired the debenture for investment purposes and, as disclosed in the Early Warning Report, assuming additional drawdowns of the credit facility, may acquire additional debentures or other securities of WAI.  SARI's shareholders plan to fully support WAI's efforts to complete its initial NI43-101 technical report and raise additional funds to further WAI's business.

SARI is a privately owned, international mining and consulting firm based in Hong Kong and registered in the British Virgin Islands. SARI was created in December 2006, to generate investment opportunities for the Asian metals industry while providing sustainable and transparent foreign direct investment for West Africa. SARI's board of directors has strong corporate finance and mining expertise, as well as considerable experience operating in Africa, Asia, North America and Europe.

China International Fund

West African Iron Ore continues to work with China International Fund Ltd. ("CIF"). On April 26th, 2013, CIF provided a loan of $500,000 to fund the immediate cash requirements of the Company. The advance is bearing interest at 8% per annum, is not convertible, and is not part of the $30,000,000 convertible loan facility previously announced.

Update on Technical Report

The Company expected to release its NI43-101 technical report in Q2; however, management has just been informed that the beneficiation tests have been delayed by several weeks. The engineers are reorganizing testing schedules, and we have been assured that our tests will be completed for publication between mid-July and mid-August.  In the coming weeks, the engineers will confirm the expected completion date. Management is very eager to have this report published as soon as possible.

The report is expected to provide a resource estimate, full metallurgy on Fe and other minerals, and initial estimates for both capital expenditures and operating expenditures. Metallurgical research is underway at different laboratories to test different process routes that would enable the successful upgrade of the Wondima iron ore to a marketable product. The main objective is to get an iron concentrate of around 62% Fe with the lowest possible level of impurities and moisture for shipping. At the moment, mineralogical analysis is in progress to determine the mineralogical parameters that will lead to optimum crushing and recovery estimates. Once the tests are complete, bulk pilot scale tests will be undertaken to formulate an optimal process flow sheet.

Changes to the Board of Directors:

The Company also announces that Craig Angus and Harald Ludwig have resigned as directors of the Company. The Company is pleased to report that Philip O'Neill will with immediate effect be nominated a director of the Company. Philip O'Neill is a founder, Chief Executive Officer, and Director of Toronto Stock Exchange listed Sunward Resources, a founder and Managing Director of ASX listed Condoto Platinum, and a Director of Asia Pacific Mining - a private Hong Kong company with interests in Myanmar.  In 2006, Mr. O'Neill founded MP1 Capital, a Calgary based company established to identify and invest predominantly in the natural resources industry.  Prior to establishing MP1 Capital, Mr. O'Neill worked as a research consultant for Casey Research.  Mr. O'Neill holds a Bachelor of Applied Science degree (Honours Program) from the University of Guelph.

Pursuant to the Company's stock option plan, the Board of the Company has granted 1,000,000 incentive stock options to Mr. O'Neill exercisable at $0.10 for a period of ten years, subject to regulatory approval.

The Company has agreed to convert all directors' fees outstanding up until March 31, 2013 into shares of the Company. As a result, 2,415,000 shares will be issued to past and present Directors for fees owed, and the outstanding payable of $241,500 will be cancelled.

Guy Duport, CEO of West African Iron Ore Corp. commented that, "The continued funding from our partners SARI and CIF provides us the necessary resources to release our initial 43-101 Technical Report. We structured these financings in order to limit dilution and provide security for our shareholders in these difficult capital markets.  As well, we wish to thank Craig Angus and Harald Ludwig for the support over the previous years, and wish them the best on their future endeavours."

A copy of the Early Warning Report filed with the applicable securities regulators regarding the above acquisition by SARI is available on SEDAR (www.sedar.com).

About the Company:

West African Iron Ore Corporation is dedicated to the sustainable development of its mineral resources in the Forécariah provinces of the Republic of Guinea. We nurture a harmonious working relationship with the local community and the Guinean authorities. We advocate the minimization of environmental impact and the promotion of economic opportunity for all our stakeholders.

ON BEHALF OF THE BOARD
Guy Duport
CEO

Statements in this release that are forward-looking statements are subject to various risks and uncertainties, certain of which are beyond the control of the Company including, but not limited to, the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of exploration results and estimates and that the resource potential will be achieved on exploration projects, currency fluctuations, dependence upon regulatory approvals, the uncertainty of obtaining additional financing and exploration risk.
Readers should also refer to the specific factors disclosed under the heading "Risk Factors" in the Company's filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume any obligation to update any forward-looking statements, save and except as may be required by applicable securities laws.

Neither 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: West African Iron Ore Corp.

For further information:

Guy Duport
CEO
guyduport@westafricanironore.com
Tel: 604-558-1198

Investor Relations
Vanguard Shareholder Solutions
Tel: 604-608-0824
Toll Free: 1-866-638-0824
ir@vanguardsolutions.ca

Profil de l'entreprise

West African Iron Ore Corp.

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