16th Mar 2007 07:01
Aricom PLC16 March 2007 Press Release 16 March 2007 Aricom plc ("Aricom" or "the Group") Acquisition of majority stake in leading Russian mining design institute Aricom plc (AIM:TIO), the Anglo-Russian developer of mineral resources, todayannounces that it has agreed to acquire a 68.49% holding in OJSC Giproruda ("Giproruda") for a cash consideration of RUR211m (c.US$8m) conditional on Russian Anti-Monopoly approval. Based in St Petersburg, and employing 148 people, Giproruda is one of Russia'smost respected mining design institutes specialising in the analysis and designof mining projects. Giproruda has unique experience in the design of pits andmines in extreme mining, geological and climatic conditions. Other areas ofexpertise include the development of efficient mining technologies, projectrepair base layout, design and transportation services, the repair of technicalequipment, storage facilities and the design of administrative and domesticfacilities. Iron ore is a key area of specialisation for the institute. This will be ofspecific benefit in the analysis and design of a number of Aricom's future andexisting development projects. Giproruda will continue its work programme forother customers but will be given an opportunity to focus attention on Aricom'sportfolio of projects. Giproruda believes it currently has a c.60% market share in the project designservices market in the Russian mining sphere. As well as development plans togrow its operations within the CIS, Giproruda is advancing its internationalprogramme with contracts signed on a number of projects as well as anapplication for ISO 9000 status. Jay Hambro, Chief Executive of Aricom plc, commented: "Aricom's project portfolio now contains a sizeable amount of reserves andresources which are all located within 500 miles from the Russian Chineseborder. We are an existing client of Giproruda and their position, as a leaderin Russian mine design and development, will significantly enhance the Group'sability to exploit the massive potential inherent in our assets. With Kuranakhnearing production, Aricom's next task is to bring on stream two very large ironore projects - with Giproruda's wealth of experience in iron ore, I believethere will be significant benefits in them becoming part of our Group." - Ends - For further information:Aricom plcJay Hambro, Chief Executive Tel: +44 (0) 20 7201 8939 www.aricom.plc.uk Canaccord AdamsChris Bowman Tel: +44 (0) 20 7050 6500 www.canaccordadams.com AbchurchCharlie Jack / George Parker Tel: +44 (0) 20 7398 7700 www.abchurch-group.com Notes to Editors Aricom plc is a leading developer of Russian metal and mining assets, focusingon iron ore and ilmenite production and delivery. The Company was establishedin September 2003 to develop projects, situated in the north west of the AmurRegion, in Russia's Far East. These projects are set to service the Chinese andRussian commodity market. Aricom currently operates three projects in the Amur region and the adjoiningJewish Autonomous Region. The Company's projects Kuranakh, K&S and Bolshoi Seymhave combined estimated reserves and resources of over one billion tonnes ofIron Ore and Ilmenite ores. The location of the Company's deposits offer asignificant logistical advantage being close to the Trans-Siberian-Express andthe Baikal-Amur Magistral railways. In 2005, 700 million tonnes of iron ore were shipped globally, of that 300million (43%) was shipped to China. It is currently estimated that China is oncourse to have imported 300 million tonnes of ore by the end of 2006 tofacilitate its demand for steel production. In June 2006, Aricom announced aMemorandum of Understanding with China's largest nonferrous metal companyAluminium Corporation of China ("Chinalco"), to co-operate in the design anddevelopment of a Titanium Sponge production plant in China. Aricom is headquartered in London, with a highly experienced board of directorscomposed of British and Russian citizens. The Company's shares were admitted totrading on the AIM Market in December 2003 and trade under the symbol TIO.L. Forfurther information please visit www.aricom.plc.uk Giproruda Giproruda Institute is the oldest leading design institute in Russia, working inthe complex mining enterprise design sphere dealing with open-pit andunderground excavation. Giproruda has built and reconstructed around 200enterprises in Russia, Kazakhstan and Transcaucasia. The institute has designedenterprises, which now work in China, India, Iran, Egypt, Bulgaria, Yugoslaviaand other countries. For the calendar year ended 31 December 2006, Giproruda had revenue of US$6.8m,operating profit of US$1.4m, profit after tax of US$1.5m and net assets ofUS$3.3m - all of these figures are as yet unaudited. Part of Giproruda's incomecomes from the lease of its 46% share of an office building in St Petersburg.Giproruda's stake in this building has recently been independently valued atUS$20.6m although this number is not included in the above net asset valuation. For further information on Giproruda please visit www.giproruda.spb.ru. Aricomaccepts no responsibility for the content of this website or for any relianceplaced on information contained in it. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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