Bethesda, Maryland, July 1, 2013 (GLOBE NEWSWIRE) -- India Globalization Capital, Inc. (NYSE MKT: IGC) announced that it had signed a Letter of Intent (LOI) for the acquisition of a 25% interest in an iron ore mine located in Aohan Banner, Inner Mongolia and 25% of a nearby beneficiation plant. According to internal Company estimates, based on geological studies, the mine has estimated reserves of 4.17 million tons of ore with a Fe content between 20-30% and can operate for 11 months in a year. The estimated reserves are worth over $200 Million at current pricing. Production is slated to begin in early August 2013, with an estimated production level of 200 MT per day. This acquisition is immediately accretive to our P&L and balance sheet, and we expect to close the acquisition in this quarter.
The mine and the processing plant have all requisite licenses in place including a mining license, an iron ore processing license, environmental clearance and a business license. During full operations, the plant and mine employ a staff of 60 workers per shift.
IGC's 25% ownership also includes a wet magnetic separation plant located near the mine that has a capacity to produce an estimated 200 MT to 250 MT of high-grade iron ore per day. The plant takes in the 20-30% ore from the mine and produces 60% high-grade iron ore. This is then sold to the steel factories.IGC will acquire through its Hong Kong subsidiary 25% of two companies: Aohan Banner Delin Iron Separation Limited Liability Company and Aohan Banner Hengli Mining Limited Liability Company. Aohan Banner Delin owns the mine and Aohan Banner Hengli owns the processing plant. Subject to satisfactory completion of due diligence, IGC will issue 1.35 million shares of its common stock in exchange for 25% ownership in both companies.