MMX Celebrates Agreement for the Acquisition of a Mining Right

July 2, 2008

July 2nd (Marketwire) – MMX Mineracao e Metalicos S.A. (“MMX” or “Company”) (BOVESPA: MMXM3) (CA:XMM: news, chart, profile) , in compliance with article 157 of Law 6,404/76, and CVM Instruction 358/02, hereby makes the following announcement:

The Company, through an indirect subsidiary of MMX Sudeste Ltda., AVG Mineracao S/A (“AVG”), and LGA – Mineracao e Siderurgia Ltda (“LGA”) agreed to the terms and conditions of the legal procedures (“the Contract”) for the acquisition of a mining right owned by LGA, located in a 755.65-hectares area in the Municipality of Bom Sucesso, Minas Gerais State (“Mining Right” or “Bom Sucesso Mine”). The Mining Right is located 200 km away from Belo Horizonte, 250 km from LLX Port Sudeste, and around 40 km from the railway operated by MRS.
For the acquisition of the Mining Right, the Company will pay LGA an amount equivalent to US$ 193,300,109.60, in four installments, with maturity on 01/05/2010. Complementary disbursements may be done depending on the results of the drilling campaign of a geological research program to be carried out by the Company in the Mining Right area, in an 18-months period. Therefore, in case the mineral resources volume, according to the conditions specified in the Contract, is greater than 241.6 million tons, AVG will pay LGA US$0.80 per additional measured ton.
Along with the drilling campaign, the Company will carry out engineering studies to determine the amount of investments required to develop the Bom Sucesso Mine. Operations are expected to commence in 2012 with an estimated production of up to 10 million annual tons of high-quality iron ore for the export market. MMX plans to transport the production by railway to LLX Port Sudeste, in Rio de Janeiro State.
After the closing of the above mentioned Contract, which shall occur by July 7, 2008, the MMX Sudeste System will be composed of the Serra Azul Unit — composed of AVG and Minerminas mines — and the Bom Sucesso Mine, and may reach an annual capacity of 25 to 30 million tons as of 2012.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: