West African Iron Ore signs binding Letter of Intent for a $30 million finance facility and offtake agreement with Strategic Pa

    




 TSX VENTURE EXCHANGE: WAI 

 VANCOUVER, Sept. 4, 2012 /CNW/ - West African Iron Ore Corp.  West African Iron Ore Corp. ("WAI" or the "Company") is pleased to  report the signing of a binding Letter of Intent for a CAD$30 million  facility between the Company and China International Fund Limited  ("CIF"). Amongst other activities, CIF are in infrastructure  development. This financing facilitates the Company's timely completion  of its maiden NI43-101 Resource Report on the Wondima prospect,  targeted for Q4 2012, the ongoing exploration efforts, and longer-term  production objectives. 

 Main terms of the Letter of Intent: 

 CIF has, subject to approval of the TSX Venture Exchange, agreed to  finance up to CAD$10 million by way of up to 10 drawdowns of  CAD$1,000,000 each progressively based on the capital expenditure  requirements of the Company.  Each drawdown will be in the form of a  convertible debenture (collectively the "Debentures") with a term of 5  years and an 8% annual interest rate.  During the term of the  Debentures, CIF will have the option to convert all or any portion of  the outstanding Debentures into common shares of the Company at a  conversion price of CAD$0.10 per share (subject to the requirements of  the TSX Venture Exchange) to the extent that CIF's aggregate beneficial  ownership of common shares of WAI will not exceed 19.9% of the issued  and outstanding common shares of WAI at the time of exercise.  The  Debentures will be secured, amongst other things, by a first fixed  charge on all the Company's assets and a corporate guarantee given by  its major shareholder, Sky Alliance Resources Inc.  On the Maturity  Date, the Company will have the option of repaying the maturing  Debentures in cash, or with off-take of iron ore production on the  Forécariah Tenement. 

 Any outstanding Debentures will become immediately due and payable in  the event the licenses comprising the Forécariah Tenement have not been  renewed by December 31, 2012. 

 CIF has also agreed to advance an additional CAD$20,000,000, on similar  terms to the Debentures, and subject to the approval of the TSX Venture  Exchange, upon confirmation that certain mineral licenses have been  renewed, and that a technical report disclosing a minimum of 350Mt of  iron ore on the Forécariah Tenement has been prepared. 

 In the definitive agreement, CIF and WAI will enter into an off-take  agreement with respect to 50% of iron ore production from the  Forécariah Tenement for a term of five (5) years. The parties have  agreed that the purchase price of the iron ore shall be 95% of the  market price, based on the prevailing international price at that time.  In addition, CIF and WAI will define the related conditions that will  allow WAI to finance its mine development. 

 "We are pleased to welcome CIF as a strategic partner. CIF's involvement  is a strong gesture of confidence in our management team and the  quality of our assets. Among other activities and investments in  Guinea, CIF has a significant ownership position in Guinea Development  Corporation (GDC), which owns the mineral licenses on the neighbouring  properties.  With its extensive and committed presence in Guinea CIF's  local knowledge will be of significant benefit to our Forécariah  project.  As well, once our project undergoes a feasibility study,  CIF's established transport and port facilities will provide our  project tremendous logistical benefits to export our iron ore. This new  partnership combined with the full support of the Guinean Government  strategically positions our project on a fast track, not only for the  benefit of our stakeholders, but for the benefit of the local  community's economic development and job creation." stated Guy Duport, CEO of West African Iron Ore Corp. 

 Update on the Forécariah permits extension and renewal: 

 The Forécariah Project is covered by three permits held by Sky Alliance  Ressources Guinée S.A. ("SAR Guinée"), a wholly owned subsidiary of  WAI, under License number A2008/043/DIGM/CPDM, published as order  A/2008/3722/MMG/SGG on October 8th, 2008 in the Official Journal of the  Republic of Guinea. The permits were valid until May 31st, 2012, and  are currently in the process of being renewed under their first  2-year-renewal period. 

 In advance of the October 2011 renewal date, SAR Guinée on July 4th,  2011 provided to the Minister of Mines and Geology a written request  with supporting documents for a two year extension of the Forécariah  licenses under the 1995 Mining Code. On September 8th, 2011 the Company  received a letter from the Mines Minister stating that an extension of  3 months has been granted to SAR Guinée. On December 19th, 2011 the  Company received a further letter from the Mines Minister stating that  an exceptional compensatory extension of 5 months has been granted to  SAR Guinée prior to first renewal. 

 This exceptional compensatory extension expired on May 31st, 2012. The  Company made a submission in accordance with the newly published Mining  Code to the Mines Minister for the first 2-year renewal period on the  Forécariah permit. Under the new Mining Code Article 20, a company  exploring for iron ore and/or bauxite can only possess in its name a  maximum of 3 permits with a total area of 1050 km2. 

 A Commission nominated by the Minister of Mines and Geology which  members included the Mining Advisors of the President and Prime  Minister of Guinea examined the Company's renewal application on July  12, 2012. On July 26, 2012 the Commission conducted a site visit of our  Forécariah tenements and will be issuing their report to the Minister  of Mines and Geology and the National Mining Commission with their  recommendations. It is important to note, as of the date of this  release, only the President of the National Mining Commission has been  nominated by Presidential decree, with the remaining 14 members to be  appointed in the near future. Our renewal will need to be approved by  the said National Mining Commission once its members are nominated by  Presidential decree. 

 About China International Fund Limited: 

 CIF is headquartered in the Hong Kong Special Administrative Region of  China, and has investment footprints in 3 continents and more than 20  countries. 

 Amongst other activities, CIF are in infrastructure development, where  in particular it has participated in the rehabilitation and development  of new and existing transport infrastructure in nearby Angola such as  the New Luanda International Airport, which is envisioned to become a  major airport hub for West Africa. CIF has rehabilitated almost 3,600  kilometers of railway and constructed 3 logistics bases in Angola  occupying 925,000 m(2) thereby developing the logistical backbone to support its  infrastructure and industrial implementation and development programs  throughout Africa. These industrial parks comprise cement and brick  production plants, sand and stone quarries, as well as production of  industrial materials such as steel sheets and plastic pipes. 

 With the strength of its experience in large-scale infrastructure  development in Africa, CIF is in the position to accelerate the iron  ore exploration and production goals of WAI, having recently built road  access within the boundaries of the Company's Forécariah permits to  provide access to the barging port of Konta. 

 CIF has a vision for Africa: Through South-South cooperation and in  partnership with private industry and the government, CIF will develop  public transport infrastructure such as road, rail, seaports and  airports to improve connectivity and accessibility, as well as public  utilities, agriculture, aqua culture, public housing, construction  materials and mining projects, where its commercial objectives are  aligned with the needs of countries to develop the economy and improve,  ultimately, the living standards of the people. 

 ON BEHALF OF THE BOARD Guy Duport CEO  

 About the Company: 

 West African Iron Ore Corporation is dedicated to the sustainable  development of its mineral resources in the Forécariah provinces of the  Republic of Guinea. We nurture a harmonious working relationship with  the local community and the Guinean authorities. We advocate the  minimization of environmental impact and the promotion of economic  opportunity for all our stakeholders. 

 Our phased exploration program aims to establish the existence of  minable iron ore mineral reserves in sufficient quantities to permit  viable production of iron concentrate and other mineral deposits. 

 Statements in this release that are forward-looking statements are  subject to various risks and uncertainties, certain of which are beyond  the control of the Company including, but not limited to, the impact of  general economic conditions, industry conditions, volatility of  commodity prices, risks associated with the uncertainty of exploration  results and estimates and that the resource potential will be achieved  on exploration projects, currency fluctuations, dependence upon  regulatory approvals, the uncertainty of obtaining additional financing  and exploration risk. Readers should also refer to the specific factors disclosed under the  heading "Risk Factors" in the Company's filings with Canadian  securities regulators. Such information contained herein represents  management's best judgment as of the date hereof based on information  currently available. The Company does not assume any obligation to  update any forward-looking statements, save and except as may be  required by applicable securities laws. 

 Neither TSX Venture Exchange nor its Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

West African Iron Ore Corp.


CONTACT:  Guy [e-mail]: 604-558-1198Investor RelationsVanguard Shareholder SolutionsTel: 604-608-0824Toll Free: [e-mail] 


    

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