OAO Severstal announced that it has reached agreement to purchase up to a 61.5% stake in African Iron Ore Group Ltd which owns, through subsidiaries the exploration rights for an iron ore deposit at Putu Range area in Liberia.

The released added that in addition Severstal will acquire a 6.29% stake in Mano River Resources Inc together with share warrants exercisable within a period of 18 months. If exercised in full, the warrants will convert into shares representing approximately 6.29% of the current issued share capital of Mano River Resources Inc. prior to giving effect to the issuance of shares to Severstal.

The purchase of the AIOG controlling stake and ࠶.29% stake in Mano River will be affected through Severstal’s indirect wholly owned Dutch subsidiary Lybica Holding B.V. Severstal will pay USD 37.5 million for 61.5 % stake in AIOG and EUR 2 million for the 6.29% stake in Mano River Resources Inc.

The agreement to purchase the AIOG stake contains customary warranties and indemnities provided by Mano to Severstal and completion is subject to Mano River Resources converting its exploration license into a Mineral Development Agreement in addition to customary conditions to closing, including approval of the TSX Venture Exchange and completion of satisfactory due diligence by Severstal.

Mr Roman Deniskin CEO of Severstal Resurs said “The purchase of this iron ore deposit in Western Africa is a significant step in the dynamic development of the Severstal mining business. From this new region we will supply production to the European and North American markets.”

According to preliminary data, it is estimated that the Putu Range deposit contains at least 500 million tonnes of iron ore. This number may substantially increase as a result of a detailed exploration exercise which is planned by Severstal Resurs.