Armco Metals To Buy Draco

(RTTNews) - Armco Metals Holdings Inc (AMCO), a distributor of imported metal ores and a steel recycler, Wednesday entered into a stock purchase agreement to acquire Draco Resources Inc, a California-based corporation engaged in the exploration and mining of iron ore and minerals.

The deal was effected via a stock exchange valued at about $46 million at the closing price of Armco Metals as of April 15, 2014, San Mateo, California-based Armco said in a statement.

Upon successful completion of the deal, Draco shareholders will own about 72.8% of the total outstanding shares of the combined companies.

Currently, Draco Resources owns exclusive rights of operation of about five million metric tons of iron ore fine in the state of Alabama.

Draco Resources commenced its first shipment of 55,000 metric tons on a vessel bound for China in March 2014 and plans to ship out 1 to 3 vessels of that same size to China on a monthly basis or a total of 55,000 to 165,000 metric tons per month over the course of the next four years or until such time as the total 5 million metric ton shipment is completed.

Draco Resources expects to generate gross profit of about $20 to $30 per metric ton based on the current spot price of iron ore, CFR China.