Afferro said that it has brought forward the deferred element of the sale of its 38.5% stake in the Putu iron ore project in Liberia by 6 months.
It means it will receive an injection of USD 50 million from Russian steel giant Severstal in the next 7 days, taking its cash balances to USD 90 million.
Afferro was originally slated to be paid in June.
It said that negotiations with potential strategic partners for its Nkout iron ore deposit in Cameroon were continuing.
Mr Luis da Silva CEO of Afferro said that "By advancing the deferred element of the sale proceeds from our former minority interest, it enables the company to strengthen its balance sheet in an uncertain economic climate, when cash is at a premium.”
The deal follows on December 13th announcement of a USD 9.75 million tax settlement with the Liberian authorities related to Putu.
Repeating his buy advice and 225 pence share price target, Mr John Meyer of City broker SP Angel said that “The receipt of cash from the Putu disposal ahead of time puts the company in a strong position. They will have enough cash to advance the project to feasibility stage while at the same time negotiating with strategic investors who can take the project to development.”
Mr Meyer said that “The company's valuation is well supported on the downside by the cash element and the work done on the project to date.”
