Severstal acquires stake in SPG Mineração

OAO Severstal has acquired a 25% stake in the Brazilian company SPG Mineração. SPG owns highly prospective iron ore exploration licenses in Amapa, Brazil. The total cost of the deal is USD 49 million, payable in performance related installments with a portion of the amount to be directed to finance the first stage of geologic exploration which aims to re-confirm the attractive geologic potential of the target’s properties. Severstal has also entered into a call option agreement to buy an additional 50% stake in the company, exercisable upon completion of certain conditions. The Amapa project has high potential, with an estimated resources potential of 0.5 to 1.5 billion tns of approximately 40% to 45 % Fe grade. Production potential is estimated at 10 million tns to 20 million tns of iron ore concentrate.

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