Wednesday, April 16, 2014

Armco Metal Holdings, Inc. (AMCO) Enters Agreement for Total Acquisition of Draco Resources, Inc.

Today, Armco Metal Holdings announced its entrance into a stock purchase agreement for 100% acquisition of Draco Resources, a California-based company engaged in the exploration, mining, and trading of iron ore and minerals. The stock purchase agreement calls for a stock exchange valued at approximately $46 million at the closing price of Armco Metal Holdings as of April 15, 2014.

The closing of the acquisition is subject to the completion of due diligence, approval from shareholders, approval for continued listing by the New York Stock Exchange, and approval by any applicable governmental regulatory agency. Once the acquisition is successfully concluded, Draco Resources shareholders will own approximately 72.8% of the total outstanding shares of the combined companies.

Commenting on the stock purchase agreement, Kexuan Yao, Chairman and CEO of Armco Metals, stated, “We are very excited about this acquisition for our company as we believe it will enable strong, rapid growth over the next four years. Draco has the plan in place to generate substantial cash flow for Armco Metals on a monthly basis which in turn will enable us to use that cash flow to further expand our own mineral trading business as well as our metal recycling operations. Management believes the combined companies will significantly improve overall shareholder value for years to come.”

At present, Draco Resources holds exclusive rights of management, operation, distribution, and sale of approximately five million metric tons of iron ore fine in the state of Alabama. The company completed its first shipment of 55,000 metric tons on a vessel bound for China in March 2014. Draco Resources anticipates shipping out 1 to 3 vessels of the same size to China per month. That equates to a total of 55,000 to 165,000 metric tons per month over the course of the next four years or until the 5 million metric ton shipment is complete. Draco Resources projects that it will make approximately $20 to $30 per metric ton based on the current spot price of iron ore, CFR China.

A distributor of imported metal ores and a steel recycler, Armco Metal Holdings has customers which include some of the fastest growing steel producing mills and foundries. The company’s product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet, and recycled scrap metals.

For more information, visit www.armcometals.com

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