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Disposal of wholly owned subsidiary Ferrum Centrafrique S.A. to AXMIN Inc.

25 January 2012

 

WEST AFRICAN MINERALS CORPORATION

 (“WAFM” or "Group”)

Disposal of wholly owned subsidiary

Ferrum Centrafrique S.A.

to

AXMIN Inc.

 

West African Minerals Corporation (AIM: WAFM), the West African focused mining investment group, today announces the disposal (the “Disposal”) by Ferrum Resources Limited (“Ferrum”)  of its wholly owned subsidiary Ferrum Centrafrique S.A. (“Ferrum Centrafrique”) to AXMIN Inc., the Canadian based gold exploration company  (“AXMIN”) (TSXV: AXM.V).

Ferrum Centrafrique is the Central African Republic (“CAR”) registered company that has lodged exploration licence applications for iron ore over the Topa iron belt (the “Topa Applications”) which are in the same areas licenced to AXMIN for gold exploration (the “Topa Project”).  The Topa Applications were denied by letter dated 12 September 2011 and whilst the Group believes that the Topa Applications were validly submitted and that Ferrum Centrafique has a priority right to be granted exploration permits for Iron in the application area, it has not been successful in obtaining a revocation of that denial.

 

Material terms of the Disposal:

  • AXMIN has acquired  all the issued and outstanding shares of Ferrum Centrafrique.
  • The Group stands to receive as deferred contingent consideration (subject to grant of the Topa Project exploration licences (the “Topa Licences”) US$10 million satisfied by the issue of new AXMIN shares (“AXMIN Shares”), provided that the new AXMIN shares represent less than 9.9 per cent. of AXMIN’s issued share capital at that time.
  • The AXMIN Shares will be issued 30 trading days after any announcement by AXMIN of the granting of the Topa Licenses. AXMIN has a current market capitalisation on the TSX Venture Exchange of approximately C$35 million.
  • The new AXMIN Shares will be valued at the 20-day volume weighted average price (VWAP) of AXMIN’s shares on the TSX-Venture Exchange for the period starting five days after the announcement by AXMIN of the grant of the Topa Licences.
  • The Group stands to receive a free carry interest in relation to the Topa Project of US$4 million plus any balance of US$10 million not received in new AXMIN shares (subject to a maximum free carry interest of US$10 million).
  • The Group will receive a 25% interest in Ferrum Centrafrique following grant of the Topa Licences.

At 30 September 2011, Ferrum attributed a carrying value of £13,000 to its holding in Ferrum Centrafique and has also borne its expenses.  The agreement with AXMIN announced today supersedes the Deed of Understanding and letter of intent between Ferrum and AXMIN disclosed in the Group’s Admission Document, an electronic version of which is available on the Group's website, www.westafricanminerals.com.

CEO and Executive Co-Chairman of West African Minerals Corporation, Stephen Dattels, said:

“With its Passendro gold project, and experience operating in CAR, AXMIN is well positioned to secure and advance the Topa project. Whilst retaining a significant interest in the project for the Group on grant of the exploration licences, the disposal allows the Group to concentrate its efforts and resources on its exciting iron ore projects in Cameroon and Sierra Leone.”

 

For further information:

West African Minerals Corporation

Religare Capital Markets (UK) Limited

Beaumont Cornish Limited

Evolution Securities Limited

GTH Communications

Denham Eke

Peter Trevelyan-Clark

Emily Staples

Roland Cornish

Neil Elliot

Chris Sim

Toby Hall

Suzanne Johnson Walsh

+44 (0) 1624 639396

+44 (0) 20 7444 0800

+44 (0)20 7628 3396

+44 (0)20 7597 5970

+44 (0) 20 3103 3902

 

About West African Minerals Corporation

West African Minerals Corporation (AIM: WAFM) is a mining investment company focused on iron ore exploration in West Africa. Through its acquisition of Ferrum Resources, it holds interests in Cameroon and Sierra Leone as well as having applications pending in Guinea. Further information on the Group is available at www.westafricanminerals.com.