SOURCE: U Mining Resources Inc.

February 21, 2008 08:30 ET

U Mining Resources Inc. Announces $4.7 Billion Potential Value of BOOT Agreement to Be Signed With the Republic of Guinea

Potential Value Based on Estimated Annual Export Sales of Iron Ore From Mining Concession

NEW YORK, NY--(Marketwire - February 21, 2008) - U Mining Resources Inc. (PINKSHEETS: UMNG) today announced that the BOOT (Build-Own-Operate-Transfer) Agreement (the "Agreement") that Comitrag (U Mining's majority-owned subsidiary) will enter into with the Republic of Guinea has a potential value of $4.7 billion.

The potential value figure is based on the estimated annual export sales of iron ore and iron pallets or nuggets from the Mining Concession that will be awarded to U Mining, through Comitrag, upon signing of the Agreement. The export sales were then multiplied by the following current benchmark contract prices: Iron Ore: $85.00 per ton and Iron Pellets: $115.00 per ton (Sources: CVRD, Wall Street Journal, US Steel and other steel producers).

As per the Agreement: "The Investor (i.e. Comitrag) foresees to produce annually for export 15 million tons of pallets or nuggets. It also foresees to export annually 35 million tons of iron ore. The Investor may increase these quantities as required to meet the level of demand."

These projected annual export sales are based on the following Guarantee with respect to the Mining Concession: "The State guarantees the Investor an iron ore reserve of at least three (3) billion tons for the whole duration (i.e. 60 years) of this Agreement."

In addition, the Agreement will assign a management contract to U Mining for the construction and re-development of a new railroad and mineral seaport. The $4.7 billion potential value of the Agreement does not take into account the revenues that will be generated from the operation of these infrastructure projects. U Mining will earn revenue from the commercial transport of iron ore on the new railroad and from the export of bauxite via the mineral seaport.

Chairman of the Board of Directors, Colonel James Krilich, stated the following: "The strategic importance of this Agreement for U Mining cannot be overstated, given the potential size and quality of the iron ore deposit, the market opportunity, and its profound positive impact on the people of Guinea."

About the Mining Concession

The Mining Concession covers a 55-km-long zone in the Simandou Mountain Range. Drill assays from previous exploration programs on the Simandou Range indicated a high-grade hematite, with a concentration of over 67% Fe (Iron), and an estimate of over 3 billion metric tons of iron ore resources. In fact, the nearby Pic de Fon iron ore deposit has an estimated 1.2 billion metric tons of iron ore at a grade of about 65% to 68% iron (Source: Guinea Ministry of Mines and Geology, 2005d). It is this fact together with the previous tests done in the area that have lead U Mining and its team to believe that this Mining Concession will soon be regarded as a world-class iron ore resource, and the Simandou region home to Africa's largest iron ore deposits.

To be added on the Company's mailing list, please speak with the Investor Communications Representatives at U Mining's Investor Relations firm Equiti-trend Advisors. Reps are available from 9:30 a.m. to 5:30 p.m. EST daily by calling (800) 953-3350. Interested investors are also encouraged to visit the Company's corporate website regularly for updates at www.umining.com.

Forward-Looking Statements

Please be advised that statements made herein, other than historical data, constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements. The potential risks and uncertainties include, among others, potential volatility in the company's stock price, increased competition, customer acceptance of new products and services offered by the company, and uncertainty of future revenue and profitability and fluctuations in its quarterly operating results. Please also be advised that the company's stock is not currently registered with the Securities and Exchange Commission.

Contact Information

  • Contact:

    Equiti-trend Advisors
    (800) 953-3350 U.S. & Canada
    (858) 436-3350 Local