Afferro and Severstal Announce Delay to Closing of the Share Purchase Agreement
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LONDON, UK, Feb. 28, 2012 /CNW/ - Afferro Mining Inc. ("Afferro", TSX-V & AIM: AFF) and OAO Severstal ("Severstal", LSE: SVST) today announce that they have agreed to delay the closing of Afferro's sale of its 38.5 percent minority interest in Severstal Liberia Iron Ore Ltd. ("SLIO") to Lybica Holding B.V. ("Lybica"), an affiliate of Severstal (the "Transaction"), due to ongoing taxation discussions with the Republic of Liberia's Ministry of Finance (the "Ministry").
The parties have received correspondence from the Ministry claiming that Lybica should withhold tax at the rate of 15 percent upon payment of the purchase price of the Transaction. After consulting with Liberian tax advisers and legal counsel, Afferro and Severstal believe that such a tax is not applicable to the Transaction. This advice is consistent with the advice obtained by the parties prior to entering into the Transaction. Representatives of both companies have made arrangements to meet with the Ministry to resolve this matter in a prompt manner. Afferro and Severstal have agreed to delay the closing of the Transaction to focus on addressing the Ministry's claim and as a result have amended the share purchase agreement to provide an outside closing date of 31 March 2012.
Afferro's CEO, Luis da Silva, commented:
"Both Afferro and Severstal are committed to closing the Transaction and will provide the market with an update on developments as discussions with the Ministry progress."
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 has a 38.5% interest in Severstal Liberia Iron Ore Ltd. which indirectly owns the Putu iron ore project in Liberia.
About ОАО Severstal
Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, the USA, the Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal's gold business, Nordgold, was established in 2007 and comprises mines and exploration projects in Russia, Kazakhstan, Burkina Faso and Guinea. Severstal is listed on RTS and MICEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $13,573 million and EBITDA of $3,263 million in 2010. Severstal's crude steel production in 2010 was 14.7 million tonnes.
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.
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:
For further information please 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
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
Severstal Investor Relations
T: +7 (495) 926-77-66
Severstal Public Relations
T: +7 (495) 926-77-66