JOHANNESBURG (miningweekly.com) – TSX- and Aim-listed Afferro Mining has signed a memorandum of understanding (MoU) with Korean steel producer Posco Africa to negotiate a definitive agreement in relation to Afferro's Nkout, Ntem and Akonolinga iron-ore projects, in Cameroon.
The MoU indicated Posco Africa’s intention of making a project-level investment, as well as its intention to facilitate infrastructure and project development funding.
Both parties were working towards signing a definitive agreement during the second quarter of the year.
Afferro CEO Luis da Silva said the agreement was a potentially transformational step in the continuing development of the company’s portfolio of iron-ore assets in Cameroon.
“It is an endorsement of the work we have undertaken to de-risk our asset base and establish a platform from which to enter the next stage of our development,” he said in a statement on Monday.
SP Angel Corporate Finance director and senior research analyst Carole Ferguson on Monday said this was good news for the company as it showed the quality of discussions they were having with a company with deep pockets and an interest in investing in the iron-ore space.
"The company now have to work with Posco to structure a mutually agreeable formula. Interestingly the agreement covers all three projects in the Cameroon. Posco would have the backing of the Cameroonian government and also attract other multilateral funding sources," Ferguson said in a note to clients.
Posco had extensive expertise in developing iron-ore projects and related infrastructure, and offered an existing presence in Africa.