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Severstal to Accumulate 100% of Putu Iron Ore Project in Liberia
12/13/2011 - OAO Severstal’s indirect subsidiary Lybica Holdings B.V. has entered into a legally binding heads of terms agreement with Afferro Mining Inc. and its wholly owned subsidiary Mano River Iron Ore Holdings Ltd. for the purchase of 38.5% interest in the Putu Iron Ore Project. Severstal currently holds the remaining 61.5% interest in Putu.
OAO Severstal’s indirect subsidiary Lybica Holdings B.V. has entered into a legally binding heads of terms agreement with Afferro Mining Inc. and its wholly owned subsidiary Mano River Iron Ore Holdings Ltd. for the purchase of 38.5% interest in the Putu Iron Ore Project, Liberia. Severstal currently holds the remaining 61.5% interest in Putu.
Under the agreement, an initial cash payment of US$65 million will be payable on completion of a definitive sale and purchase agreement (SPA) by no later than February 28, 2012. A deferred cash payment will be made in an amount to be determined in accordance with certain provisions.
The parties plan to enter into the SPA by December 23, 2011. The transaction will require obtaining the approval of shareholders of Afferro Mining Inc. and regulatory consents.
Thomas Veraszto, Senior Vice President of Strategy and Corporate Development of Severstal, said: “The acquisition is in line with our key strategic goals of being a leading global steel and steel-related mining company with high-quality iron ore and coal assets across the world. Severstal will continue to develop Putu and consider the best strategic options to advance the project. We would also like to express our gratitude to Afferro Mining for successful partnership between our companies during the last three years.”
ОАО Severstal is one of the world’s leading vertically integrated steel and steel-related mining companies, with assets in Russia, the U.S., the Ukraine, Latvia, Poland, Italy, Liberia, and Brazil. Its gold business, Nordgold, was established in 2007 and comprises mines and exploration projects in Russia, Kazakhstan, Burkina Faso, and Guinea. Severstal’s crude steel production in 2010 was 14.7 million tonnes.
Afferro Mining Inc. is an established exploration and development company. Its portfolio includes the 100% owned Nkout iron ore project and surrounding iron ore targets in Cameroon.
