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Astra Resources Acquires Concentrated Metal Ore Mine In Norway Worth More Than US$600m

International diversified resources company, Astra Resources Plc (FWB Code: 9AR), has acquired the Joma Minerals Project, a concentrated metal ore mine in Lake Hudningsvatnet, Norway.

The acquisition, signed through Astra's subsidiary MidAst Investment Group LLC, is on a scrip basis, and gives Astra operational control and 90% ownership of the operation (equivalent to Astra's 90% stake in MidAst) which is situated in the county of Nord-Trondelag, near the Swedish border of Norway. Astra will form a Norwegian subsidiary to manage, own, and operate the asset and licenses.

The operation is subject to final due diligence, including the completion of technical and scientific reports, testing of samples obtained by Astra , independent confirmation of the calculated output value and Astra Resources board approval.

Deposit registrations made by the mine lab of the previous mining company indicates iron ore, copper, zinc, gold and silver resources are all present in the acquisition area, representing about 60% of the over 10.5 million tonne plus deposit. The asset has been defined.

Astra CEO Dr Jaydeep Biswas says the most recent assay in October 2011 indicates a current net asset value of over US$600 million (after deducting operating costs), excluding the value of gold. The gold value brings the potential value closer to US$1 billion.

"The deposit was built up over 16 years by concentrated tailings from past mining operations, with this type of storage previously being the norm," Dr Biswas says.

"Registered information indicates there is up to 12 million tonnes of finely ground, concentrated ore currently situated at the bottom of Lake Hudningsvatnet, which is 18 meters down at its deepest point.

"As the ore is already extracted and defined, there is no requirement to drill and there will be no cost for mining, crushing and milling the ore, removing the need for expensive equipment and high start-up costs.

"Instead, the ore will be pumped from the bottom of the lake and dried with very standard low cost equipment, with estimated processing costs sitting at less than $10 per tonne if we focus solely on the extraction of iron ore."

The enrichment process that is planned will result in 63% iron ore.

Logistics to port and port facilities are in place to take these products to local European and international markets.

Astra Managing Director Silvana De Cianni says while the extraction of iron ore will prove highly cost-effective for Astra, other resources present in Lake Hudningsvatnet add substantial value to the operation.

"The silver content alone has a gross value of $300 million, with the previous manager of the mine confirming there are also substantial gold resources present that are not included in the initial valuation," Ms De Cianni says.

"In addition, there are also indications that suggest there is a content of rare soil minerals in the ore deposit, something that will be further analysed during the production process."

Astra plans to finish the exploitation of the current deposit during the next 10-12 years, with production expected to include the uptake of the resources from the lake, drying and separation of the waste rock.

The resources will then be transported to a harbour in the nearby town of Namsos for export. Its harbour is ice-free all year round and was used by the previous mine owners, with the main part of the infrastructure remaining.

While the land surrounding Lake Hudningsvatnet is not included in the acquisition, Astra has received the land owner's permission to lease the necessary land for the development of the project and ore processing.

MidAst Investment Group's Managing Director Vincent Crandon will be responsible for integrating the acquisition into the current Astra business sector, and will then manage the corporate operation of the asset.

The total scrip offered in the acquisition is 50 million shares in Astra Resources Plc which is included in the existing Astra capital structure.

The operation's present owners, CRD Holdings AB, have also been engaged for two years on an exclusive basis as technical advisors to Astra, or any special purpose vehicle established by Astra, for the purpose of the acquisition and operation of the ore asset.

Bo Sandström, representative for CRD Holding AB, says the company is very much looking forward to working with Astra Resources as well as Vincent Crandon of MidAst Investment Group on the development of the Joma Minerals project.

"We are very pleased with the result of our efforts to find a solution on the financing of this Ore development and we rest assured that this will be a very fruitful collaboration," Mr Sandström says.

It is expected the production process will begin during 2013, once all the operations permits are in place. Hedge funds in Europe are in discussion with MidAst to fund the operations of this project or alternatively it will be funded through Astra's IPO prospectus to be launched later this year.

This project will be a launch-pad for future projects in Scandinavia which has a history of mining and prospective geological structures and is close to industrialised consumer markets in Europe where Astra is also building its T-Steel business.

Astra Resources' global portfolio includes gold interests in Southeast Asia, coal mine in Africa, iron ore in India and the Philippines, carbon efficient businesses, the production of the high-strength T-Steel technology in Hungary and the provision of mining services housing in Rockhampton, Queensland.