Severstal to accumulate 100% of Putu (7622T)
December 12 2011 - 2:00AM
UK Regulatory
TIDMSVST TIDMAFF
RNS Number : 7622T
OAO Severstal
12 December 2011
Severstal to accumulate 100% of the Putu Iron Ore Project in
Liberia
December 12, 2011, Moscow - OAO Severstal (hereinafter -
Severstal or the "Company"), one of the world's leading vertically
integrated steel and steel related mining companies, today
announces that its indirect subsidiary Lybica Holdings B.V.
("Lybica") has entered into a legally binding heads of terms
agreement (the "Heads of Terms") with Afferro Mining Inc. and its
wholly owned subsidiary Mano River Iron Ore Holdings Limited
("Mano"), for the purchase of 38.5% interest in the Putu Iron Ore
Project, Liberia ("Putu"). Severstal currently holds the remaining
61.5% interest in Putu.
Thomas Veraszto, Senior Vice President of Strategy and Corporate
Development of Severstal, commented:
"We are pleased to announce this transaction which will
strengthen Severstal's position in the global iron ore market. 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".
Consideration Terms:
Under the Heads of Terms an initial cash payment of US$65
million will be payable on completion of a definitive sale and
purchase agreement (the "SPA") by no later than 28 February 2012. A
deferred cash payment will be made in an amount to be determined in
accordance with the following provisions:
A) At any time after the earlier of (i) June 30, 2013 and (ii)
two months after the delivery of a definitive feasibility study
(the "DFS") relating to Putu, Mano may require Lybica to pay a cash
payment of US$50 million. Such right shall terminate on the second
anniversary of such right first arising.
B) Provided Mano has not exercised its rights under the above
clause (A), in the event of the agreement by Lybica or Severstal on
or prior to the date which is in the earlier of (i) 12 months after
the delivery of a DFS and (ii) 31 March 2015 to directly or
indirectly sell all or a material part, being not less than 10%, of
Putu or otherwise realize commercial value for it (e.g. by the
introduction of another investor acquiring a material interest in
the project or offering of shares to the public in an entity
holding Putu), Lybica shall make a cash payment to Mano equal to
the greater of (i) US$70 million and (ii) a sum equal to 38.5% of
the total consideration in respect of the sale or realization event
less 38.5% of any further developments costs, less the initial cash
payment of US$65 million, such sum to be multiplied by 50%. This
payment would be payable 60 days from the date of completion of the
relevant binding agreement for the sale or other commercializing
transaction.
C) At any time after 30 June 2014, Lybica may at its sole
discretion make a cash payment of US$70 million to Mano being a
Deferred Payment. Upon receipt of such payment any rights of Mano
under clauses (A) and (B) above shall terminate.
Timing and Next Steps:
Subject to the terms and conditions set out under the Heads of
Terms, the parties plan to enter into the SPA by 23 December 2011.
The transaction will require obtaining the approval of shareholders
of Afferro Mining Inc. and regulatory consents.
For further information please contact one of the following:
Severstal Investor Relations
Vladimir Zaluzhsky
T: +7 (495) 926-77-66
vladimir.zaluzhsky@severstal.com
Severstal Public Relations
Elena Kovaleva
T: +7 (495) 926-77-66
elena.kovaleva@severstal.com
***
OAO 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. www.severstal.com
Afferro Mining Inc. 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. Afferro currently has
a 38.5% interest in the Putu iron ore project in Liberia, which is
currently intending ti sell to Severstal, the Company's joint
venture partner, under the binding heads of terms agreed between
Severstal and Afferro.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQEAKAAFSEFFEF
Afferro Min (LSE:AFF)
Historical Stock Chart
From Apr 2024 to May 2024
Afferro Min (LSE:AFF)
Historical Stock Chart
From May 2023 to May 2024