MANA Man.Assd.Csh

    RNS Number : 8950J
  OAO Severstal
  10 December 2008
   
    


    Press release


    Severstal CLOSES DEAL TO INVEST IN a controlling stake in an iron ore deposit in Western Africa

    Moscow, December 10, 2008. OAO Severstal (�Severstal�), one of the world's leading metals and mining companies, announced today that its
Severstal Resources mining  division has closed the transaction to purchase up to a 61.5% stake in African Iron Ore Group Ltd (�AIOG�) which
owns, through subsidiaries, the exploration rights for an iron ore deposit in the Putu Range area, Liberia (Western Africa). 
      
    All of the agreement's conditions, including approval of the TSX Venture Exchange, completion of satisfactory due diligence by Severstal
Resources and extension of the  exploration license had been completed. 

    The purchase will be effected through Severstal's indirect wholly-owned Dutch subsidiary, Lybica Holding B.V.  

    Severstal will pay US$37.5 million for a 61.5 % stake in AIOG. Of this, Severstal will pay US$ 22.5 million for the purchase of a 45%
stake from Mano River Resources Inc. and from its other shareholders. US$ 15 million will be used for the purchase of an additional AIOG
share issuing.

    In light of Severstal Resources' majority interest, AIOG will be re-named Severstal Liberia Iron Ore Ltd.

    The money raised by AIOG through subscription will be spent on financing of exploration work and feasibility study for an iron ore
deposit in the Putu Range area.

    In addition, as announced in May 2008, Severstal has acquired a 6.29% stake in Mano River Resources Inc. together with share warrants
exercisable within a period of 18 months.  If exercised in full, the warrants will be converted into shares which, together with a stake
already held by Severstal, will give Severstal approximately 11.8% of the share capital of Mano River Resources Inc.

    According to preliminary data, it is estimated that the Putu Range deposit contains more than 500 million tons of iron ore. This number
may substantially increase as a result of a detailed exploration exercise which is planned by Severstal Resources.

    Mano River Resources Inc. is a junior mining company listed on the TSX Venture Exchange  (MNO) and on AIM in London (MANA). It is
engaged in the acquisition, exploration and development of iron ore, gold and diamond properties located in Liberia, Sierra Leone and
Guinea.

    Roman Deniskin, Severstal Resources CEO, said: "The development of the Putu Range iron ore project is a significant step in the dynamic
development of our mining business. From this new region we will supply production to the European and North American markets".


    OAO Severstal is an international metals and mining company with a listing on the Russian Trading System and the London Stock Exchange.
Incorporated in 1993, the company focuses on high value added and unique niche products and has a successful track record of acquiring and
integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia and in North America, thus securing its
supplies of raw materials. In 2007, Severstal produced 17.5 million tons of steel. Revenues were $15.2 billion and EBITDA was $3.7 billion.
EPS was $1.92.

    Severstal Resources manages all Severstal's mining assets: two iron ore mining complexes (Karelsky Okatysh and Olcon), one coking coal
complex (Vorkutaugol) in northwest Russia, one coking coal complex in USA (PBS Coals) as well as gold mining assets in Russia and
Kazakhstan. In 2007 Severstal's Mining division produced 5.8 million tonnes of coal concentrate, 1.8 million tonnes of coking coal, 1.8
million tonnes of steam coal, 10.0 million tonnes of iron ore pellets and 4.7 million tonnes of iron ore concentrate (excluding PBS Coal
production).  

    Contacts
    OAO Severstal
    Dmitry Druzhinin, Investor Relations
    +7 495 926 7766

    Severstal Resources
    Ekaterina Kapralova, Director of Communications
    +7 495 9810910 ext 6833
    +7 985 7620027
    ey.kapralova@severstalresurs.ru
    Forward Looking Statements:
    This communication may contain projections and other forward-looking statements regarding future events or the future financial
performance of OAO Severstal (Severstal). Forward looking statements are identified by terms such as "expect," "believe," "anticipate,"
"estimate," "intend," "will," "could," "may" or "might", the negative of such terms, or other similar expressions. Severstal wishes to
caution you that these statements are only predictions and that actual events or results may differ materially. Severstal does not intend to
update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated
events. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements
of Severstal may include, among others, general economic conditions in the markets in which Severstal operates, the competitive environment
in, and risks associated with operating in, such markets, market change in the steel and mining industries, as well as many other risks affecting Severstal and its operations.


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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