The Russian steel and mining company Severstal has announced the multi-stage acquisition of shares in Core Mining Limited (Core), which controls exploration licenses for the Avima iron ore deposit in the Republic of Congo and the Kango iron ore deposit in the Republic of Gabon.
"The acquisition of a stake in Core Mining is part of our strategy to build a portfolio of world class exploration assets in steelmaking materials that will be logistically beneficial for our target markets in Europe, North America and Asia," Severstal Resources' head of strategy and business development Boris Granovsky commented.
Accordingly, Severstal will initially acquire a 16.5 percent interest in Core. The transaction is expected to be completed in the current month of May, with the investment to be used to fund Core's exploration program for both projects, which are at an early stage. Severstal has the option to make further investments in Core in 2011.
Avima iron ore deposit has a multibillion metric ton resource target, with grades that are greater than 50 percent Fe. Drilling to date has indicated high grade mineralization of up to 69.75 percent Fe to a depth of up to 180 m. The preliminary (non-JORC) resource evaluation is 500 million mt, including a minimum of 100 million mt of direct shipping ore (DSO, 60+ percent Fe). Based on an independent third party technical assessment of the exploration data currently available, Avima is expected to contain between 500 million mt to 1 billion mt of iron ore with significant upside potential.
Early exploration on the Kango iron ore project showed significant elevated magnetic responses of over 30 km on 60 km anomaly. The project is conveniently located near the coast and existing infrastructure. The project is believed to have early production potential.
The resource figures for both projects will be updated in the course of the planned exploration in 2010-2011.
As SteelOrbis previously reported, in 2008 Severstal acquired 61.5 percent stake in African Iron Ore Group Ltd (AIOG) which owns, through subsidiaries, the exploration rights for the iron ore deposit in the Putu Range area, Liberia (Western Africa). After the acquisition, AIOG changed its name to Severstal Liberia Iron Ore Ltd.