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 theacquisition of a 25% interest in an iron ore mine located in AohanBanner, Inner Mongolia and 25% of a nearby beneficiation plant. According to internal Company estimates, based on geologicalstudies, the mine has estimated reserves of 4.17 million tons ofore with a Fe content between 20-30% and can operate for 11 monthsin a year. The estimated reserves are worth over $200 Million atcurrent pricing. Production is slated to begin in earlyAugust 2013, with an estimated production level of 200 MT perday. This acquisition is immediately accretive to our P&Land balance sheet, and we expect to close the acquisition in thisquarter. The mine and the processing plant have allrequisite licenses in place including a mining license, an iron oreprocessing license, environmental clearance and a businesslicense. During full operations, the plant and mine employ astaff of 60 workers per shift. IGC's 25% ownership also includes a wet magneticseparation plant located near the mine that has a capacity toproduce an estimated 200 MT to 250 MT of high-grade iron ore perday. The plant takes in the 20-30% ore from the mine and produces60% high-grade iron ore. This is then sold to the steelfactories. IGC will acquire through its Hong Kongsubsidiary 25% of two companies: Aohan Banner Delin Iron SeparationLimited Liability Company and Aohan Banner Hengli Mining LimitedLiability Company. Aohan Banner Delin owns the mine and AohanBanner Hengli owns the processing plant. Subject to satisfactorycompletion of due diligence, IGC will issue 1.35 million shares ofits common stock in exchange for 25% ownership in bothcompanies.
IGC's CEO Ram Mukunda remarked, "We expect ironore pricing to increase in the near future, so this is an opportunetime to acquire iron ore reserves and production capacity atattractive valuations. The Fe content associated with this mine isrelatively high, which allows us to produce high-grade ore, throughthe beneficiation plant, at a much lower cost basis. We canalso increase daily production from 200 MT per day to about 1,000tons per day by expanding the beneficiation plant capacity. The LOI stipulates that each party will invest in proportion totheir ownership percentage to fund the expansion."About IGC: Based in Bethesda, Maryland, India Globalization Capital, Inc.(IGC) is a materials and infrastructure company operating in Indiaand China. We currently supply iron ore to steel companiesoperating in China. For more information about IGC, please visitIGC's Web site at www.indiaglobalcap.com. For informationabout Ironman, please visit www.hfironman.net. Forward-looking Statements: Some of the statements contained in this press release that arenot historical facts constitute forward-looking statements underthe federal securities laws. Forward-looking statements can beidentified by the use of the words "may," "will," "should,""could," "expects," "post", "plans," "anticipates," "believes,""estimates," "predicts," "intends," "potential," "proposed,""confident" or "continue" or the negative of those terms. Thesestatements are not a guarantee of future developments and aresubject to risks, uncertainties and other factors, some of whichare beyond IGC's control and are difficult to predict.Consequently, actual results may differ materially from informationcontained in the forward-looking statements as a result of futurechanges or developments in our business, our competitiveenvironment, infrastructure demands, Iron ore availability andgovernmental, regulatory, political, economic, legal and socialconditions in China and India.
The Company undertakes no obligation to publicly update anyforward-looking statements, whether as a result of new information,future events, or otherwise. Other factors and risks that couldcause or contribute to actual results differing materially fromsuch forward-looking statements have been discussed in greaterdetail in IGC's Schedule 14A, Form 10-K for FYE 2012, Form 10-Q forthe quarter ended September 30, 2012 and Form 10-Q for the quarterended December 31, 2012 filed with the Securities and ExchangeCommission on December 9, 2011, July 16, 2012, November 14, 2012,and February 13, 2013 respectively.
CONTACT: Contact Information: Claudia Grimaldi 301-983-0998