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Wednesday, 3 April 2013
Afferro Mining focused on strategic tie-up
Afferro Mining (LON:AFF, CVE:AFF) says its main AIM for 2013 is to secure a strategic partnership for its flagship Nkout project in Cameroon.
The company has been thrashing out the terms of an alliance with fellow AIM-listed IMIC and the African arm of South Korea’s POSCO, one of the world’s largest iron and steel firms.
Planned investment would be made at the project level and focused on the infrastructure required to get the mine off the ground and funding needed to develop the operations.
In today’s annual results, Afferro said a deal remains top of its list of priorities for 2013.
Luis Cabrita da Silva, Afferro’s President and CEO, said: “The directors expect the terms for a definitive agreement either with POSCO or IMIC to be clearer over the next few months.”
Also on the agenda this year are a resource upgrade for Nkout, as well as starting the pre-feasibility study and the Environmental and Social Impact Assessment (ESIA) there.
In 2012, the loss from its operations was US$6.4mln, similar to 2011’s figure.
At the end of 2012, Afferro had cash of US$63mln in the bank, compared with just US$9.9mln the year before. This is largely a result of the US$115mln sale of its 38.5% interest in SLIO, which indirectly owns the Putu iron ore project in Liberia. The company made a profit of US$81.9mln from the disposal having invested US$23mln of its own cash.
Afferro said the outlook for iron ore depends entirely on the outlook for global steel production.
It said: “China will continue to urbanise and although at a slower rate in percentage terms, future steel production growth still translates into significant additional annual volume requirements for seaborne iron ore.”