Cliffs Natural Resources subsidiary, Cliffs Greene B.V., announces obtaining further equity stake in KWG Resources Inc. as a result of conversion of debenture

2009-04-15 15:54 ET - News Release

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CLEVELAND, OH, April 15 /CNW/ - Further to the press release of Cliffs Natural Resources ("Cliffs") dated March 16, 2009 announcing that its subsidiary, Cliffs Greene B.V. ("Cliffs Greene"), acquired, by way of private placement, certain securities issued from treasury by KWG Resources Inc. ("KWG"), Cliffs announces that Cliffs Greene has been issued additional units of KWG as a result of the conversion today, further to KWG shareholder approval, of the convertible debenture in the principal amount of US$1,033,398 purchased by Cliffs Greene on March 16, 2009.

As a result of the conversion of the debenture into 21,135,069 units, each unit comprising one common share and approximately 0.44 of a common share purchase warrant, Cliffs Greene has received (i) an additional 21,135,069 common shares representing 5.9% of the total outstanding KWG common shares, such that, together with the 50,448,987 common shares already held, Cliffs Greene's aggregate percentage holding of common shares is now 19.9%, for a total of 71,584,056 common shares and (ii) an additional 9,310,839 warrants, representing 5.9% of the total outstanding warrants and together with the 22,224,784 warrants already held, representing 19.9% of the total outstanding warrants, for a total of 31,535,623 warrants. One warrant becomes exercisable for every five common shares issued pursuant to outstanding warrants, options or other rights to purchase common shares as at January 20, 2009, and entitles Cliffs Greene to acquire one common share at a price of US$0.05, such price to remain in effect until March 16, 2010 and thereafter at a price of US$0.10 (subject to the undertaking of KWG to reduce such price to US$0.05 upon regulatory approval), with all warrants expiring by March 16, 2014 at the latest. The acquisition of common shares pursuant to the exercise of the warrants will not increase Cliffs Greene's percentage holding of common shares in KWG beyond 19.9%, such warrants having been issued for anti-dilutive purposes. KWG has disclosed that the number of outstanding common shares following the conversion is 359,718,877 and the number of outstanding warrants (including warrants issued to Cliffs Greene) is 158,470,468.

The debenture was converted, at no additional cost, into units at the rate of US$0.048894(C$0.062213) per unit.

Cliffs Greene acquired the securities of KWG as a strategic investment. Cliffs Greene and KWG are parties to a shareholder agreement conferring rights of first refusal and pre-emptive rights in favour of Cliffs Greene in connection with the issuance of voting shares or convertible securities by KWG (subject to certain excluded issuances as provided therein) and the right to designate a representative to the board of directors of KWG. In pursuance of the foregoing, Cliffs Greene designated Mr. Richard P. Fink, General Manager, Acquisitions and Development of Cliffs, as its nominee, and Mr. Fink was elected to the board of KWG on April 15, 2009. Subject to restrictions under applicable law, Cliffs Greene may in the future acquire or dispose of additional securities of KWG depending on factors such as the business and prospects of KWG and future market conditions.

About Cliffs Natural Resources Inc.

Cliffs Natural Resources is an international mining and natural resources company. It is the largest producer of iron ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia and a significant producer of metallurgical coal. With core values of environmental and capital stewardship, our colleagues across the globe endeavor to provide all stakeholders operating and financial transparency as embodied in the Global Reporting Initiative (GRI) framework. Cliffs Natural Resources is organized through three geographic business units:

The North American business unit is comprised of six iron ore mines owned or managed in Michigan, Minnesota and Eastern Canada, and two coking coal mining complexes located in West Virginia and Alabama. The Asia Pacific business unit is comprised of two iron ore mining complexes in Western Australia and a 45% economic interest in a coking and thermal coal mine in Queensland, Australia. The South American business unit includes a 30% interest in the Amapa Project, an iron ore project in the state of Amapa in Brazil, as well as a number of smaller greenfield projects not yet in production.

Over recent years, Cliffs has been executing a strategy designed to achieve scale in the mining industry and focused on serving the world's largest and fastest growing steel markets.

About KWG Resources Inc.

KWG Resources is a mineral exploration company with extensive claim holdings in the James Bay Lowlands of Northern Ontario, Canada, where important discoveries of nickel and chrome have been made recently in the so-called Ring of Fire. KWG has an equal joint venture interest in a large claim block in the central part of the discovery area, with Spider Resources Inc. (TSXV: SPQ). The joint venture is developing the Big Daddy chromite deposit adjacent to the Black Thor and Black Label chromite discoveries of Freewest Resources Canada Inc. (TSXV: FWR).