11 July 2011

Putu iron ore resource increased to 3.2 billion tonnes

OAO Severstal, one of the world’s leading vertically integrated steel and mining companies, today announces that an independent mineral resource report has estimated a 3.2 billion tonnes deposit at its Putu iron ore project in Liberia. Severstal is the majority stakeholder in the project with a 61.5% interest and Afferro Mining Inc. has a 38.5% stake.

The National Instrument 43−101 compliant report issued by independent engineers SRK Consulting (“SRK”) marks a 36% increase in the previous estimated size of the resource in the existing pit at Putu which has a 34% iron concentration.

Boris Granovsky, Head of Strategy for Severstal Resources, commented: “The estimated increase in the resource places Putu among the largest deposits of iron ore in West Africa. We are planning to prepare the preliminary and final feasibility studies of the Putu project to start-up the operations ahead of schedule.”

More detailed information about the SRK report can be found in the Afferro Mining announcement here: http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10916324

The Putu iron ore project is a 13km long iron rich ridge, located only 130km inland from the deepwater shoreline of eastern Liberia. In February 2011 an independent mineral resource report estimated 2.4 billion tonnes of iron ore at 34% total Fe for the project, in June 2011 the resource estimate was increased to 3.2 billion tonnes of iron ore. A Mineral Development Agreement detailing the fiscal and legal terms for the development and mining of the Putu iron ore deposit was granted and ratified by the Government of Liberia on 9th September 2010. The Agreement term is for a period of 25 years and this can be extended further in line with the life of mine. Severstal has held a 61.5% interest in the project since 2008.