Afferro signs definitive sale and purchase agreement to divest interest in the Putu Iron Ore Project for a minimum of US$115 million cash consideration

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TSX-V: AFF

AIM: AFF

LONDON, UK, Dec. 23, 2011 /CNW/ - Further to the announcement of 12 December 2011, Afferro Mining Inc. ("Afferro" or the "Company"), a TSX-V / AIM listed exploration and development company is pleased to announce that Afferro and its wholly owned subsidiary, Mano River Iron Ore Holdings Limited ("Mano"), have entered into a definitive Sale and Purchase Agreement (the "SPA") with Lybica Holdings B.V. ("Lybica"), an affiliate of ZAO Severstal Resources ("Severstal"), for the sale of its 38.5% interest in the Putu iron ore project in Liberia ("Putu") (the "Transaction"). Lybica currently holds the remaining 61.5% interest in Putu.

Transaction Key Terms:

• Afferro to receive a cash payment of US$65 million on completion;
• Afferro's right to request a deferred payment of US$50 million cash;
• Potential additional consideration should Putu be sold to a third party;
• Afferro released from any further capital contribution to fund Putu from 1 January 2012;
• Transaction subject to shareholder and regulatory approvals;
• Funds will be used to accelerate the Company's development strategy for its 100% owned Nkout iron ore project in Cameroon; and
• Proceeds will enhance Afferro's negotiating position in attracting a strategic partner for Nkout.

Detailed commercial terms of the Transaction are set out in the announcement released on 12 December 2011.

No revenue is attributable to Putu as the project is not in production. As at 30 November 2011, the Company had accounted for a carrying value for the Putu Project of US$22.2 million.

Timing and next steps:
Approval from shareholders and the TSX-V is, inter alia, a condition of the SPA and will be required in order to complete the sale transaction. An information circular setting out the details of the transaction and the notice of the special meeting of shareholders will be sent to the Company's shareholders in due course.

The anticipated timetable of principal events relating to the Transaction is as follows:

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 100% owned Nkout iron ore project and surrounding iron ore targets in Cameroon. At Nkout, Afferro has an NI 43-101 compliant indicated mineral resource estimate of 944Mt at 32.7% Fe and an inferred mineral resource estimate of 1.05Bt at 31.6% Fe. Afferro currently has a 38.5% interest in the Putu iron ore project in Liberia, which it is currently intending to sell to Severstal, the Company's joint venture partner, under the binding heads of terms agreed between the Company and Severstal.

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 mineralisation 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 NI 43-101 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) accepts responsibility for the adequacy or accuracy of this release.