Ferrum Americas Mining Inc.

Ferrum Americas Mining Inc.

December 08, 2011 17:30 ET

Ferrum Americas Mining Inc. Announces Completion of Amalgamation

TORONTO, ONTARIO--(Marketwire - Dec. 8, 2011) - Ferrum Americas Mining Inc. ("Amalco") announces that it has completed the previously announced amalgamation transaction (the "Amalgamation") pursuant to which with Ferrum Americas Mining Inc. ("FEM"), a private Canadian company, amalgamated with RAP Acquisition Corp. ("RAP") to form Amalco. Today, the TSX Venture Exchange issued its final Exchange Bulletin regarding the Amalgamation.

Prior to the Amalgamation, RAP consolidated its existing common shares on a 5 for one basis and FEM split its existing common shares on a one for 4.5 basis. Upon the occurrence of the Amalgamation, each outstanding FEM or RAP common share was exchanged for one Amalco common share and every five Class A shares of RAP were exchanged for one Amalco common share. Outstanding options and warrants of each of RAP and FEM were exchanged for comparable securities of Amalco, having the same economic terms as the respective securities had immediately prior to the Amalgamation. As a part of the Amalgamation, all of the share certificates representing common shares and class A shares of RAP outstanding immediately prior to the Amalgamation, but after giving effect to the consolidation, were cancelled and all registered common shareholders of RAP immediately prior to the Amalgamation have been issued replacement share certificates representing common shares of Amalco. The share certificates will be mailed to registered shareholders over the next few days.

In connection with the Amalgamation, FEM completed a non-brokered private placement financing of 6,685,500 subscription receipts priced at $0.50 per subscription receipt (each which were exchanged immediately prior to the Amalgamation for one FEM common share (on a post-split basis) and one FEM warrant). Gross proceeds raised by FEM pursuant to this placement were $3,342,250. This amount is comprised of the $3,050,000 previously announced by RAP on September 16, 2011, and all subsequent amounts raised. All of the securities issued in connection with this placement were exchanged for similar securities of Amalco. Accordingly, each Amalco warrant will be exercisable for a period of 24 months from the closing date of the Amalgamation to purchase one Amalco common share at a price of $1.00, subject to acceleration if the Amalco common shares trade at or in excess of $1.50 for 10 consecutive trading days.

In accordance with FEM's agreements with a joint venture partner, FEM's joint venture partner received 2,000,000 Amalco common shares.

The current number of issued and outstanding Amalco common shares is 33,483,501.

As a result of the Amalgamation, the board of directors of Amalco are: Laurence Curtis, Jordan Kupinsky, Barry Lavin, Alistair Maxwell and Nick Tintor. Mr. Tintor is also the President and Chief Executive Officer of Amalco. The Amalco management team is completed by Stephen Gledhill as Chief Financial Officer and Leslie Haddow as Corporate Secretary.

Haywood Securities Inc. acted as sponsor in connection with the Amalgamation. Additional details concerning the Amalgamation can be found on www.sedar.com.

The stock symbol FEM has been reserved by the TSX Venture Exchange as the trading symbol for Amalco. It is expected that trading under this symbol will resume on December 9, 2011.

"This is an important step in the growth of Ferrum Americas which allows us to advance our Cerro Rojo iron ore project in eastern Bolivia and to execute on our strategy of building an Americas focused iron ore company," Nick Tintor, President and CEO said.

Pursuant to the Amalgamation, Nick Tintor ("Tintor") acquired ownership and control of 7,767,001 common shares ("Tintor Acquired Common Shares") of Amalco and Laurence Curtis ("Curtis") acquired ownership and control of 7,375,001 Amalco common shares ("Curtis Acquired Common Shares"). Prior to the Amalgamation, Tintor and Curtis were shareholders in FEM.

Pursuant to the Amalgamation, each of Tintor and Curtis also acquired ownership and control over the option (the "Options") to acquire up to 315,000 Amalco common shares respectively. Tintor also acquired ownership and control of 392,000 warrants (each, an "Acquired Warrant") of Amalco. Each Acquired Warrant is exercisable for one Amalco common share.

After giving effect to the Amalgamation, Tintor holds: 7,767,001 Amalco common shares, representing 24.67% of the issued and outstanding Amalco common shares; 392,000 Acquired Warrants, representing 1.24% of the issued and outstanding Amalco warrants; and 315,000 Options, representing 14.34% of the outstanding Amalco options, and Curtis holds: 7,375,001 Amalco common shares, representing 23.425% of the issued and outstanding Amalco common shares; and 315,000 Options, representing 14.34% of the outstanding Amalco options.

The Tintor Acquired Common Shares, the Curtis Acquired Common Shares, the Options and the Acquired Warrants were acquired by Tintor and Curtis (as the case may be) pursuant to an amalgamation agreement between FEM and RAP (an NEX listed company).

The Tintor Acquired Common Shares, the Curtis Acquired Common Shares, the Options and the Acquired Warrants were acquired for investment purposes and further securities of the Corporation, including upon conversion of the Acquired Warrants, and exercise of the Options, may be acquired in the future for similar purposes.

A copy of each of the Early Warning Reports being filed with the applicable securities regulators regarding the Amalgamation will be available on SEDAR (www.sedar.com). A copy of these Early Warning Report may be obtained by contacting either of the parties listed below.

About Ferrum Americas Mining

Ferrum Americas has entered into two joint ventures to earn up to a 98% interest in the Cerro Rojo iron ore project in Bolivia. Located 600 km east of Santa Cruz and approximately 55 km from Puerto Suarez on the Hidrovia river system near Corumba, Brazil, Cerro Rojo hosts a large banded iron formation striking for more than 4 km and grading in excess of 50% Fe, according to reports prepared by Rio Tinto in 1999.

Forward-Looking Statements

This news release may contain forward-looking statements that are based on Ferrum Americas Mining Inc.'s expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Statements speak only as of the date on which they are made, and the Company undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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