FXPO Ferrexpo Plc

RNS Number:2453I
Ferrexpo PLC
22 November 2007




Expansion of Existing Operations beyond IPO Business Plan


Ferrexpo plc ("Ferrexpo") is pleased to announce the commencement of a US$158
million project to expand production at its current mining operation on the
Gorishne - Plavninskoye Lavrikovskoye ("GPL") deposit to approximately 32mt of
iron ore per annum by 2011 and to extend the life of the mine at these
production levels to at least 2035. This additional ore production will enable
the Company to take advantage of currently under-utilised processing capacity to
increase high quality pellet production by approximately 1.3mt per annum. This
production expansion and extension of mine life are in addition to that detailed
in the business plan associated with Ferrexpo's listing in June.

As foreshadowed at the time of the listing, a GPL pit optimisation study has
been undertaken by Ferrexpo in conjunction with Turgis Consulting (Proprietary)
Limited ("Turgis"), the Company's South Africa-based mining engineering partner,
which has determined that it is possible to increase production of iron ore at
the GPL mine from current production levels of approximately 28mt per annum to
at least 32mt per annum. The design of the pit expansion is such that the
incremental ore mined will consist entirely of richer ore, all of which will be
used to produce Ferrexpo's higher quality pellets containing 65% Fe. This
additional ore will be processed through the existing beneficiation and
pelletising plants, which have surplus capacity, enabling capital efficient
pellet production expansion to be achieved. Once full ore production is reached
in the GPL pit, it is expected that pellet production levels from produced ore
will be increased by about 1.3mt per annum of 65% Fe pellets.

The Board of Ferrexpo PLC has approved US$158 million in development capital
expenditure for this project. US$68 million will be spent on capitalised
stripping works over the next 3 years, to be implemented immediately to the
north of the of the current pit operations. Most of the remainder will be spent
on additional mining equipment.

The engineering design work carried out on the GPL open pit has determined that
the mine life can be extended at the expanded production levels by at least 12
years, to 2035. SRK Consulting and Turgis have been engaged to independently
review and verify the resource and reserve estimates and the GPL reserves will
be formally restated once this evaluation is complete.

Mike Oppenheimer, Ferrexpo CEO, said:

"In September we announced the initial capital commitment for the new
Yeristovskoye mine, the first of our major growth projects. While moving this
project and our other longer term growth options ahead on schedule, we have also
been aggressively pursuing nearer term options for expanding our production to
meet strong demand from our customers and to take full advantage of our
under-utilised processing capacity.

The results of the GPL optimisation study have confirmed the huge unrealised
potential of our resource at Poltava. Given our surplus ore processing capacity,
with relatively modest capital investment in the mine we can achieve a highly
capital efficient 15% increase in pellet production from our own ore over the
next 3 years. This incremental production will all be of the higher quality
favoured by our customers and will not require material additions to fixed
costs, thereby delivering higher margins.

We will continue to pursue opportunities for extracting greater value from our
current operations whilst not losing focus on our major growth projects."

For further information, please contact:

Ferrexpo:                                         +44 207 389 8304
Gavin Mackay

Finsbury:                                         +44 207 251 3801
Robin Walker
Alex Simmons

Notes to Editors:

Ferrexpo is a Swiss headquartered resources company with assets in Ukraine,
principally involved in the production and export of iron ore pellets, used in
producing steel. Current output is over 9 million tonnes, approximately 85% of
which is exported to steelmakers around the world. The Group is currently
undertaking a significant growth programme and listed on the main market of the 
London Stock Exchange in June 2007 under the ticker FXPO. For further 
information please visit www.ferrexpo.com.




                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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