Ferro Iron Ore Announces Merger Agreement
In conjunction with the business combination with CTL, the Company has also reached a definitive agreement, dated October 27, 2012, to obtain the remaining 22.5% interest in the Exploration License through a business combination with Blue Eagle Trading Limited. The Exploration License covers 6,092.45 hectares of exploration area located in an iron mineralized corridor in Eruu soum, Selenge Aimag, in North Central Mongolia in the heart of a proven mineralization corridor. The corridor is contiguous to the largest operating iron mine in the country with access to rail, roads, power and water in very close proximity. The corridor is along strike with other significant exploration projects including the Haranga Bayantsogt, Tumur Tolgoi, Khustai and Tumurtei Deposits. The licensed area is roughly 1,000km from steel mills in Northern China and is accessible by the railway, with surplus capacity, running in front of the property. Although the Company awaits completion of a National Instrument 43-101 technical report, two historical diamond drill holes show significant iron intercepts including over 50% Fe over 55.2 metres from 10.8 metres below surface. There is also surface exposure of branded iron skarn in trenching. Given the significant grade and logistics cost advantages, the Company looks to supply inland steel mills in northern China currently utilizing either very high cost domestic ores or expensive imported ores railed hundreds of kilometers from port.