- Ontario Iron Mining Inc. executes an asset purchase
agreement for El Sol and Whitemud Properties.
- Northern Iron and Ontario Iron Mining Inc. agree to work
closely to create synergies and share infrastructure costs to
develop the region's iron ore resources.
VANCOUVER,
Nov. 13, 2012 /CNW/ - Northern
Iron Corp. ("Northern" or the "Company") (TSXV: NFE) (OTCQX: NHRIF)
(FRANKFURT: N8I) today announced the signing of an asset
purchase agreement under which Ontario Iron Mining Inc. (OIMI) will
acquire 100% of the El Sol and Whitemud Properties from Northern
for $5,000,000. The full sale price
will be paid on successful completion of OIMI's exclusive four
month due diligence and transfer of property titles.
This agreement represents the first step in OIMI
and Northern's collaboration in developing the district and
acquiring the strategic funding required for building the mining
infrastructure in the area.
Basil Botha,
Northern's President & CEO stated, "Our primary assets and
focus are the Griffith Mine; a past producer, and Karas property,
to produce hot briquetted iron (HBI). The El Sol and Whitemud
properties have not been a part of the Company's business plan to
produce HBI, and is why the board has considered the transaction.
The sale of El Sol and Whitemud properties not only provides us
with an extra $5,000,000 in cash, it
is also the beginning of an important strategic partnership with
OIMI. "
Jonas Struthers,
a spokesperson for OIMI said, "We will expect to work closely with
Northern Iron to create synergies where we can share certain
infrastructure costs that will benefit both companies and the
region. We look forward to an expanding relationship with the
Northern Iron team over the coming years."
As part of OIMI's due diligence period, OIMI
plans to spend approximately $2.5
million on diamond drilling, logging core and mapping the
two properties.
The El Sol and Whitemud properties have not been
part of Northern's business plan as all current exploration
expenditures have been focussed on the Griffith and Karas properties. Under the terms
of the agreement, should OIMI not conclude the sale, all
exploration data will become the sole property of Northern.
The transaction is subject to TSX Venture
Exchange approval.
A feasibility study has not been completed and
there is no certainty the proposed operation will be economically
viable and successful in fulfilling the orders.
About OIMI
OIMI is a privately owned company, registered in
Ontario, Canada. Its
shareholders are the controlling shareholders of a leading Chinese
commodity handler, trading house and asset manager, with core
competency in the iron ore market and a focus on developing
brownfield iron ore assets for domestic and international
sales.
About Northern Iron Corp.
The Company is a 100% owner of five iron ore
properties in the Red Lake
district containing over 500 million tonnes of historical
resources. Sufficient work has not been completed by a qualified
person to classify the historical estimate as mineral resources as
defined by the National Instrument 43-101.
The Red Lake
district is situated in an established mining area in Ontario, where the company has two near term
development projects, the past producing Griffith mine and the Karas property.
The Company is currently working towards the
production of HBI, a transportable form of direct reduced
iron. HBI is complementary and a viable metallic alternative
to scrap steel. Quality scrap is a critical raw material in the
steel making process. With the diminishing supply of quality scrap
steel and ever increasing market demand, steel producers around the
world will be looking to secure alternative supplies of metallic
products.
As part of the business plan, the Company
acquired the past producing Griffith mine, which produced pellets and
sponge iron (Direct Reduced Iron/DRI) from 1968 to 1986. The
mine was owned and operated by STELCO and supplied pellets and
sponge iron to the Hamilton and
Nanticoke steel mills in
Ontario. The metallurgy of the
deposit has been proven over eighteen years of production.
Almost the entire transportation infrastructure
is currently in place to both produce HBI and to ship produced HBI
into the North American market via rail and lake barges and into
Asian markets via rail through the port of Prince Rupert. Existing infrastructure
includes all weather roads, 115kV power line, natural gas line,
rail bed and port facilities.
The Company is focusing on de-risking the
project by seeking out potential joint venture partners, off-take
agreements or a combination thereof.
Cautionary Statement
The foregoing information may contain
forward-looking statements relating to the future performance of
the Company. Forward-looking statements, specifically those
concerning future performance, are subject to certain risks and
uncertainties, and actual results may differ materially from the
Company's plans and expectations. These plans, expectations, risks
and uncertainties are detailed herein and from time to time in the
filings made by the Company with the TSX Venture Exchange and
securities regulators. The Company does not assume any
obligation to update or revise its forward-looking statements,
whether as a result of new information, future events or
otherwise.
Neither the TSX Venture Exchange nor its
Regulation Service Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
SOURCE Northern Iron Corp.