/NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES./
LONDON, UK, April 4, 2012 /CNW/ - Afferro Mining Inc. ("Afferro", TSX-V & AIM: AFF) announces the signing of an amendment agreement to provide for the closing of the sale of its 38.5 per cent minority interest in Severstal Liberia Iron Ore Ltd. ("SLIO") to Lybica Holding B.V. ("Lybica"), an affiliate of Severstal (the "Transaction"), on 5 April 2012.
As disclosed on 28 February 2012, the parties received correspondence from the Republic of Liberia's Ministry of Finance (the "Ministry") claiming that Lybica should withhold tax at the rate of 15 percent upon payment of the purchase price of the Transaction. Following consultation with Liberian tax advisers and legal counsel, neither Severstal nor Afferro believe that such a tax is payable. This advice is consistent with the advice obtained by the parties prior to entering into the Transaction.
In order to facilitate closing on 5 April 2012, the parties amended the share purchase agreement to provide for (a) a US$55,250,000 payment delivered to Afferro at closing and (b) an amount totalling US$9,750,000 to be held in escrow with Royal Bank of Canada. Under the amended agreement, no portion of the escrowed funds will be released to the Ministry before 31 December 2013 unless certain events occur, including settlement or final determination of the Ministry's claim. The escrow of such amounts is not an acknowledgement of the validity of the Ministry's claim and Afferro continues to work to resolve this matter in a prompt manner.
Afferro's CEO, Luis da Silva, commented:
"We are looking forward to closing the Transaction tomorrow, which will secure the future development of Afferro's assets in Cameroon. The decision to move the funds into escrow will allow Afferro to resolve the Ministry's withholding tax claim independently, while also providing over US$55 million in cash, equating to about two years of working capital.
Funds from the Transaction will be used to advance Nkout through feasibility work towards DFS in H2 2014, and to continue to drill for additional direct shipping ore. The Company has also moved three drill rigs to Ntem in the last week with results expected from the drilling programme during Q3 2012. At only 80km from the proposed port, Ntem represents a very exciting exploration target for us."
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 a 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.
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. A 43-101 technical report titled "Mineral Resource Estimate for the Nkout Iron Ore Project", dated 15 November 2011, has been filed on SEDAR.
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 twelve months ended 31 December 2010, available under the Company's profile on SEDAR at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual 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.
For further information:
Afferro Mining Inc.
Luis da Silva / Bevan Metcalf /Jeremy Cave
Tel: +44 (0) 20 7257 2930
Evolution Securities Limited
Nominated Adviser: Neil Elliot
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