SOURCE: Stock Market Alerts

June 09, 2010 09:20 ET

Breaking News: China Armco Metals -- June 9, 2010

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by Stock Market Alerts LLC.

MIAMI, FL--(Marketwire - June 9, 2010) - Stock Market Alerts' performance stock list includes: China Armco Metals, Inc. (AMEX: CNAM), AK Steel (NYSE: AKS), Cliffs Natural Resources Inc. (NYSE: CLF) and EOG Resources, Inc. (NYSE: EOG).

This morning, China Armco Metals, Inc. (AMEX: CNAM) announced that it has agreed to Acquire up to a 19.9% stake in Apollo Minerals, Ltd. ("Apollo"), an Australian iron ore exploration company, for approximately U.S. $3.6 million in cash.

Apollo is an Australian iron ore exploration company listed on the Australian Securities Exchange. Apollo owns the exploration rights of two mineral tenements at Mount Oscar in the Pilbara region of Western Australia, containing a significant iron ore deposit. The Mount Oscar Project is located about 25 kilometers south of the Cape Lambert Iron Ore Project which delivered resource estimates of 1.5 billion tons of 31.2% iron ore that was sold in July 2008 to China Metallurgical Group Corporation (MCC) for over U.S. $300 million. Apollo's tenements are believed to contain a similar quality of iron ore as found at Cape Lambert. Geophysical models compiled by an independent consultant, Southern Geoscience Consultants, have estimated a total global tonnage of 800 million tons of iron ore between surface and a depth of 250 meters. Apollo intends to use the cash infusion to advance its exploration activities, to carry out processing option studies and to evaluate opportunities to access local infrastructure and other project opportunities. 

Under the terms of the agreement, Apollo will issue 12.5 million of its common shares in exchange for A$1,875,000 to be held in escrow pending Apollo shareholder approval of the issuance of an additional 16.75 million common shares in exchange for A$2,512,500. This will bring China Armco's total investment to A$4.3 million or approximately U.S.$3.6 million for a 19.9% stake in Apollo. China Armco will have the right to name one member to Apollo's board of directors for as long as it maintains at least a 12% stake in Apollo.

Upon completion of the transaction, Apollo will issue to China Armco, subject to shareholder approval, five year options to purchase an additional 5 million shares of common stock at a $0.25 per share, half of which will vest on the first anniversary of issuance with the balance vesting on the second anniversary of issuance. The options may only be exercised in order for China Armco to maintain its 19.9% stake should Apollo issue additional common shares in the future. The grant of the right and options is subject to approval from the Australian Securities Exchange.

Additionally, Apollo has agreed to give China Armco the off-take rights to no less than 15% of the iron ore production from its Mount Oscar Project. Based on Apollo's estimated 800 million metric tons of iron ore reserves, the Mount Oscar Project could potentially provide China Armco with approximately 1 million metric tons of iron ore per year after refining which has the potential to generate revenue for China Armco in excess of U.S. $135 million annually at today's market prices.

The stock closed yesterday at $3.76 cents a share.

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AK Steel (NYSE: AKS) up 1.6% on 10.9 million shares traded.
AK Steel produces flat-rolled carbon, stainless and electrical steels, primarily for automotive, appliance, construction and electrical power generation and distribution markets.

Cliffs Natural Resources Inc. (NYSE: CLF) up 4.4% on 8.1 million shares traded.
Cliffs Natural Resources Inc. is an international mining and natural resources company.

EOG Resources, Inc.(NYSE: EOG) up 4.1% on 4.1 million shares traded.
EOG Resources, Inc. is one of the largest independent (non-integrated) oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom and China.

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