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SKY ALLIANCE RESOURCES, INC. DISCLOSES ITS POSITION IN WEST AFRICAN IRON ORE CORP.

^{Published on 2011-04-01 14:25:23 - Market Wire}
 

CENTRAL, Hong Kong, April 1 /CNW Telbec/ - SKY ALLIANCE RESOURCES, INC. ("SARI") announces that on March 31, 2011, it acquired ownership of 24,500,000 common shares of West African Iron Ore Corp. (TSX-V: WAI) (the "Issuer" or "WAIOC") pursuant to the terms of a share purchase agreement dated January 28, 2011, as amended on February 22, 2011 (the "Share Purchase Agreement"). In addition to cash consideration in the amount of USD 1,000,000.00, the Issuer issued 24,500,000 common shares to SARI as part of the purchase price for all of the issued and outstanding shares in the capital of SKY ALLIANCE RESSOURCES GUINEE SA which were held by SARI. As of the date hereof, SARI owns 24,500,000 common shares of the Issuer, representing 14.03% of the issued and outstanding common shares of the Issuer.

As disclosed by the Issuer in its press release dated March 31, 2011, WAIOC is also obliged, under the terms of the Share Purchase Agreement to pay further consideration to SARI upon completion of certain resource milestones, as follows:

a) an additional US$1,000,000 and the issuance of a further 16,000,000 common shares of the Issuer upon establishment of an iron ore mineral resource of greater than 750,000,000 tonnes;

b) an additional US$1,500,000 and the issuance of a further 40,000,000 common shares of the Issuer upon establishment of an iron ore mineral resource of greater less than 2 billion tonnes;

c) an additional 50,000,000 common shares of the Issuer and grant of a 1% royalty to SARI upon establishment of an iron ore mineral resource of greater than 3 billion tonnes. The royalty can be purchased by the Issuer for US$300 million at any time within one year of the commencement of commercial production;

d) an additional 10,000,000 common shares of the Issuer upon establishment of each additional 500,000,000 tonne iron ore mineral resource, up to a maximum 120,000,000 additional common shares.

The securities issued pursuant to the Share Purchase Agreement are subject to a four-month hold period and to the applicable escrow requirements of the TSX Venture Exchange.

The common shares of the Issuer acquired by SARI were acquired for investment purposes. Although SARI may receive additional shares of the Issuer in the event that the previously mentioned resource targets are met, SARI has no current intention to acquire further shares of the Issuer. In the future, SARI may, from time to time, acquire additional securities of the Issuer, may continue to hold its present position or may dispose of its securities.

This press release is being issued in order to comply with the disclosure requirements under applicable securities legislation. This press release is not an admission that SARI owns or controls any WAIOC securities, or is a joint actor, with another entity.

The TSX Venture Exchange has neither approved nor disapproved the information contained herein.