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. Last Updated: 07/27/2016

Aricom to Buy Iron Deposit

Aricom, a London-listed miner with assets in the Amur region, plans to acquire control of an iron ore deposit with a view to supplying China's booming economy, its CEO said Friday.

Aricom has agreed to pay $27 million for 60 percent of Lapwing, which owns the rights to develop the Garinskoye deposit in the Amur region. It also paid $19.7 million for an option to buy another 25 percent of Cyprus-based Lapwing for $100 million within two years.

CEO Jay Hambro said the higher price for the 25 percent stake would reward Aricom's Russian partners for their role in acquiring the deposit at a tender last year, while leaving room for an increase in value as the project is developed.

"The tender process is us getting in at cost," Hambro said by telephone from London. "We believe it's worth a lot more than that, because I'm leaving a lot of money on the table for the Aricom shareholders."

Hambro said the other 40 percent of Lapwing was owned by "Russian individuals and institutions who helped us with the tender process."

JP Morgan Cazenove has valued Garinskoye at about $2 billion in a preliminary estimate for clients seen by Reuters. On that basis, Aricom's 60 percent share would be worth ?1.13 ($2.22) per share, giving a total per-share value of ?2.02.

Aricom shares traded flat on Friday at 66 pence.