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.