Afferro Mining Inc. - Progress Review and Half Year Results

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TSX-V: AFF
AIM: AFF

LONDON, UK, Aug. 26, 2011 /CNW/ - Afferro Mining Inc. ("Afferro" or the "Company"), the TSX-V / AIM listed exploration and development company, with iron ore projects in Cameroon and Liberia, announces the progress made year to date, together with its financial results for the half year to 30 June 2011.

Highlights - 6 months to June 30, 2011

Operations

• Announced maiden resource estimate at Nkout, with spend of only $4.4m, the resource estimate was later increased by 36% to 1.42Bt¹ at 33.6% iron, with now 50% Indicated category
• The focus at Nkout is now on both identifying "direct shipping ore" and increasing the magnetite banded iron formation ("BIF") resource
• With its partner Severstal Resources, the Putu resource estimate was more than doubled to 2.4Bt at 34.1% iron, and then shortly after period end increased to 3.24Bt² at 34.3% iron, with now 58% Indicated category
• Five drill rigs are currently operating at Nkout and three rigs at Putu

Financials

• Cash and cash equivalents of $7m and total assets of $40.1m at period end. The current cash balance is $27.9m
• $29.2m spent in the period including $10.8m transferred to Aureus in the Plan of Arrangement, with $16.2m spent on exploration
• The Company remains debt free
• Loss for the six months of $6.7m
• As part of the Plan of Arrangement the net assets distributed to Aureus including Afferro's gold assets, investments in Stellar and cash were transferred at the carrying value of $48.2m

Corporate

• Completion of the Plan of Arrangement to split African Aura on 13 April
• Post period end, on 19 July, successful placement of 17.3m new common shares at £0.90 each, raising net $24.2m
• Appointment of Royal Bank of Canada as joint broker

Outlook and key deliverables for the remainder of 2011

The Board is focussed on adding more value to its resource base and with this in mind the key objectives for the remainder of 2011 are to:

1. Complete the extended 81,000m drill programme at Putu by Q4 2011 and progress other studies in order to complete a pre-feasibility study by Q1 2012;
2. Further increase the magnetite BIF resource at Nkout;
3. Identify additional potential direct shipping ore material at Nkout by Q4 2011;
4. Complete the logistics and infrastructure scoping study at Nkout by Q4 2011;
5. Commence a preliminary economic assessment on Nkout after the delivery of the logistics and infrastructure scoping study; and
6. Progress discussions with strategic investors.

Luis da Silva, Chief Executive of Afferro, commented:

"We have had an extremely busy and successful first half to 2011. Following the split, Afferro is now focussed on developing its iron ore assets.

There has been much progress in increasing our iron ore resource this half. The resources at both Nkout and Putu are now of sufficient scale to justify development as stand-alone projects. At Nkout we now have 1.42Bt¹ of iron ore at 33.6% iron, with 50% at Indicated status and at Putu, with our partner Severstal, we now have 3.24Bt² of iron ore at 34.3% iron. This gives the Company more than 900Mt of attributable contained iron.

The focus for the Company is now to develop these assets to feasibility stage and subsequent development. To this end, we are holding discussions with potential strategic investors, with a long-term desire for off-take and investment in iron ore. The Company intends to select partners who offer the best access to financing and infrastructure expertise, whilst at the same time limiting shareholder dilution. The recent placing has improved the strength of the Company's balance sheet and will improve its position in relation to these discussions. A further update will be provided in due course."

Note 1: Nkout announcement dated 16th June 2011, 700.5 Mt @ 32.4% Indicated, 716.5 Mt @ 34.8% Inferred
Note 2: Putu announcement dated 11th July 2011, 1.89 Bt @ 33.9% Indicated, 1.36 Bt @ 34.7% Inferred

A copy of the Financial Statements and Management's Discussion and Analysis can be obtained via www.sedar.com and on the Company's website www.afferro-mining.com.

About Afferro Mining Inc.
Afferro is an established exploration and development company listed on the TSX-V (AFF) and AIM (AFF). Afferro's portfolio includes the Nkout iron ore project (the "Nkout Project"), and surrounding iron targets in Cameroon and which is subject to a resource expansion drilling programme. Afferro also has a 38.5% interest in the Putu iron ore project in Liberia (the "Putu Project"), which is subject to a resource expansion drilling programme and is moving through pre-feasibility managed by joint venture partner Severstal Resources (the mining division of London and Moscow listed OAO Severstal). In September 2010, the Putu Project was granted a 25 year renewable Mineral Development Agreement by the Government of Liberia.

Qualified Person
Howard Baker has some ten years experience in the exploration, definition and mining of iron ore Mineral Resources. Howard Baker is a full-time employee of SRK Consulting (UK) Ltd, an independent Consultancy and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration, and to the type of activity which he is undertaking to qualify as a Qualified Person in accordance with NI43-101 and a Competent Person as defined in the June 2009 Edition of the AIM Note for Mining and Oil Gas Companies. Howard Baker consents to the inclusion in the announcement of the matters based on their information in the form and context in which it appears and confirms that this information is accurate and not false or misleading.

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