IMIC-Afferro Merger Signed

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Alternative Investment Market-listed firms, International Mining and Infrastructure Corporation plc (LSE:IMIC) and Afferro Mining plc (LSE:AFF) have signed a definitive arrangement agreement for the acquisition of Afferro Mining by IMIC, both firms announced earlier today.

Afferro, which had earlier received several offers, including from IMIC, since December 2012, agreed to the 120-pence per share offer, in 80 pence cash and 40 pence loan, by IMIC, announced last month, valuing the company nearly US$200 million.

Both firms agreed to the sale “in principle” in May and the deal will need to be approved by shareholders of both companies no later than August 30th.

One of the conditions to the sale is for Afferro to maintain a cash balance of at least US$70 million held in escrow at Bank of America Merill Lynch.

Investment firm IMIC’s interest in Afferro is focused on the latter’s flagship iron ore project in Cameroon, Africa, where about 1.6 billion tonnes of high grade iron ore can be mined from the Nkout licence with a net present value of US$4.6 billion and internal rate of return of 24%, according to Afferro’s estimates.

Should the sale be completed, IMIC will cease to be an investing company and will join the AIM as a mining business.

Afferro Chairman, David Netherway, commented: “We are pleased to have reached this point with IMIC. We believe that the deal offers our shareholders a unique opportunity to realise value, particularly in light of broader market conditions.”

IMIC’s Chairman, Haresh Kanabar, for his part, stated the combination of both companies is a compelling opportunity that will see Afferro’s iron ore assets being managed IMIC’s expertise.

Shares of Afferro and IMIC were up by 4.3% and 4.8% to 79 pence and 32.50 pence, respectively, by midday on the London Stock Exchange, following the announcement.

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