REG - Ironveld PLC - £2.5m Fundraise & Proposed Capital Reorganisation
30/10/2024 14:00
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RNS Number : 2760K Ironveld PLC 30 October 2024
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.
30 October 2024
IRONVELD PLC
("Ironveld" or the "Company")
Successful Completion of Conditional £2.5 Million Fundraise
and Proposed Capital Reorganisation
Ironveld PLC ("Ironveld" or the "Company"), the owner of a High Purity Iron
("HPI"), Vanadium, and Titanium project located on the Northern Limb of the
Bushveld Complex in Limpopo Province, South Africa, is pleased to announce a
conditional placing and subscription with new and existing investors, raising
gross proceeds of £2.5 million at an issue price of 0.036 pence per share.
Highlights
· Proposed conditional placing ("Placing") and subscription
("Subscription") to raise gross proceeds of £2.5 million, through the issue
of 6,944,444,444 New Ordinary Shares at an issue price of 0.036 pence per
share (the "Issue Price");
· Funds raised will significantly improve the Company's working
capital position and enable Ironveld to advance its key strategic initiatives
and unlock the significant value inherent in its assets;
· Issue of a further 2,862,648,017 New Ordinary Shares at the Issue
Price in settlement of certain loan facilities, creditors and Directors'
salaries;
· Proposed Capital Reorganisation to subdivide each Existing
Ordinary Share into one New Ordinary Share of 0.01 pence each and nine
Deferred Share of 0.01 pence each; and
· Investor Warrants to be issued to recipients of New Ordinary
Shares pursuant to the transaction on a 1-for-1 basis, with each Investor
Warrant exercisable at 0.072 pence (being a 100% premium to the Issue Price)
for a period of three years.
The Placing, along with the issue and allotment of the Subscription Shares,
Loan Settlement Shares, Creditor Shares and Directors' Settlement Shares, and
the Capital Reorganisation are each conditional, inter alia, on the passing of
the Resolutions by Shareholders at the General Meeting. A circular
containing further details on the proposed transaction and Capital
Reorganisation ("Circular") and notice of meeting to convene the General
Meeting, which is to be held at the offices of Cavendish, One Bartholomew
Close, London EC1A 7BL at 10.00 a.m. on 20 November 2024, will be sent to
Shareholders today. Following its publication, the Circular will be available
on the Company's website at www.ironveld.com.
The fundraise will provide the capital required for Ironveld to advance its
key strategic initiatives and unlock the significant value inherent in its
assets. The Board believes that the current market capitalisation does not
accurately reflect the true potential of the Company's assets, and the new
funds will enable the Company to continue driving forward on several fronts,
including:
· Completion of essential upgrades at the smelter complex to
achieve profitable production capacity.
· Progression towards revenue generation and cash flow positivity,
anticipated by end of Q2 2025.
· Establishing Ironveld as the first producer of high-purity
water-atomised iron in the Southern Hemisphere, opening new market
opportunities.
· Capitalising on our significant untapped asset value, which
remains under appreciated in the current market valuation.
Ironveld has secured long-term, renewable Mining Licenses extending to 2045
and 2047, with a range of potential revenue streams from HPI, vanadium, and
titanium products. In addition, the Company is also actively exploring new
opportunities to diversify its asset portfolio, ensuring long-term growth and
value creation.
The Company will maintain its focus on operational improvements and the
production of high-quality coarse and water-atomised HPI powders. These
efforts are designed to generate revenue, achieve profitability, and
ultimately deliver long-term growth and increased shareholder value.
Kris Andersson, CEO of Ironveld, said: "We are incredibly grateful for the
strong support from both our new and existing investors. This fundraise
provides us with the capital needed to advance our strategic initiatives and
address key operational objectives.
"These funds will allow us to complete the necessary smelter upgrades and work
to address the disparity between our assets' inherent value and their
reflection in the Company's market cap. We are confident this will position us
for accelerated growth, value realisation, and enhanced shareholder returns.
"I would like to sincerely thank our shareholders for their continued belief
in the Company's vision and for standing by us during this critical phase."
Further details of the proposed transaction and Capital Reorganisation have
been extracted from the Circular and are set out below.
Defined terms in this announcement are set out at the end of the announcement.
For further information, please contact:
Ironveld plc c/o BlytheRay
Kristoffer Andersson, Chief Executive Officer +44 20 7138 3204
Cavendish Capital Markets Limited (Nomad and Broker) +44 20 7220 0500
Derrick Lee / Adam Rae
Turner Pope Investments (TPI) Ltd (Joint Broker) +44 20 3657 0050
Andrew Thacker / James Pope
BlytheRay +44 20 7138 3204
Tim Blythe / Megan Ray
Notes to Editors:
Ironveld (IRON.LN) is the owner of Mining Rights over approximately 28
kilometres of
outcropping Bushveld magnetite with a SAMREC compliant ore resource of some 56
million tons of ore grading 1,12% V2O5, 68,6% Fe2O3 and 14,7% TiO2.
In 2022 Ironveld agreed to acquire and refurbish a smelter facility in
Rustenburg, South Africa, in which it can process its magnetite ore into the
marketable products of high purity iron, titanium slag and vanadium slag. This
transaction became unconditional in March 2023.
Ironveld is an AIM traded company. For further information on Ironveld please
refer to
www.ironveld.com (http://www.ironveld.com) .
To the Shareholders and, for information only, to holders of options /
warrants
Dear Shareholder,
CONDITIONAL PLACING AND SUBSCRIPTION
AT A PRICE OF 0.036 PENCE PER SHARE
TO RAISE £2.5 MILLION
NOTICE OF GENERAL MEETING
1. Introduction
The Company announced on 30 October 2024 a conditional placing with new and
existing investors, to raise £2.205 million before expenses through the issue
of 6,125,000,000 New Ordinary Shares at the Placing Price and a conditional
subscription with existing investors and directors to raise £0.295 million
before expenses through the issue of 819,444,444 New Ordinary Shares at the
Placing Price.
A further 1,941,852,777 New Ordinary Shares will be issued by the Company at
the Placing Price in settlement of the Loan Facilities, 276,627,721 New
Ordinary Shares will be issued by the Company at the Placing Price to certain
Directors in settlement of deferred salaries and fees and 644,167,519 New
Ordinary Shares will also be issued by the Company at the Placing Price to
certain creditors in settlement in all or part of outstanding debts owed by
the Company. Further details of the issue of these shares are set out in
paragraph 3 below.
The Placing Price was arranged at the closing middle market price of 0.036
pence per Existing Ordinary Share on 29 October 2024 (being the last
practicable date before the announcement of the Placing).
The purpose of this document is to provide you with details of the Placing,
the Subscription, the Capitalisation and the Capital Reorganisation, to
explain the background to and the reasons for the Placing, the Subscription,
the Capitalisation and the Capital Reorganisation and why the Directors
recommend that Shareholders vote in favour of the Resolutions to be proposed
at the General Meeting. As the Placing Price is below the nominal value of the
Company's Existing Ordinary Shares, the Company needs to effect the Capital
Reorganisation to facilitate the issue of the Placing Shares and the
Subscription Shares. Further details of the Capital Reorganisation are set out
in paragraph 4 below.
The Placing, along with the issue and allotment of the Subscription Shares,
Loan Settlement Shares, Creditor Shares and Directors' Settlement Shares, and
the Capital Reorganisation are each conditional, inter alia, on the passing of
the Resolutions by Shareholders at the General Meeting, notice of which is set
out at the end of this document. If the Resolutions are passed, admission of
the New Ordinary Shares, including the Transaction Shares, to trading on AIM
is expected to occur at 8.00 a.m. on 21 November 2024.
2. Background
2.1. Background to Placing
Ironveld (IRON.LN) is the owner of a High Purity Iron ("HPI"), Vanadium and
Titanium project located on the Northern Limb of the Bushveld Complex in
Limpopo Province, South Africa (the "Project"). This Project includes
long-term mining rights over approximately 28 kilometres of outcropping
Bushveld polymetallic deposit with a JORC compliant ore resource of some 56
million tons of ore grading 1.12% V2O5, 68.6% Fe2O3 and 14.7% TiO2.
In 2022 Ironveld agreed to acquire a smelter complex in Rustenburg, South
Africa consisting of four 2.5MW furnaces and associated convertors and a
granulator, to process its magnetite ore into marketable products such as
high-purity iron, titanium slag, and vanadium slag. The plan was to operate
three furnaces at a combined capacity of 7.5MW, while keeping one in
reserve. Since then, the Company has successfully refurbished one furnace, and
commissioned the convertors and the granulator. Whilst initial production
started, operational challenges and necessary modifications have delayed the
ramp-up of production, which was originally expected in late FY23, and further
work is required to bring these components into full production.
A detailed review of strategy, costs and objectives for the Project was
conducted by John Wardle, following his move to the role of Executive Chairman
of Ironveld in October 2023. This review identified key changes that were
necessary, and a decision was taken to place the smelter on care and
maintenance to minimise costs and conserve cash until sufficient funding was
available.
The Company has been in prolonged discussions with a South African-based
financial institution regarding financing of mining and smelting activities at
the Project, which would have enabled Ironveld to invest in Group operations,
including the transition to production of high purity iron powders. In June
2024 the Company received a communication which indicated that the finance
package potentially available may be substantially reduced from that
originally envisaged and that the formal offer of funding required further due
diligence and would be delayed due to the South African election process and
the resulting potential impact on policy decisions. Discussions on this
funding are ongoing, with the latest guidance being that in order to secure a
£10 million debt funding package, the Company must produce both coarse and
atomised HPI powders from its smelter to demonstrate product quality.
As a result of the delay to the institutional funding process, the Company has
recently been funded by certain shareholders and Directors, with its largest
shareholder Tracarta, an entity in which John Wardle has a 100% beneficial
interest, providing significant support. Despite being capital constrained,
the Company has made progress over the last year, having identified the
changes required to deliver strategic enhancements at the Project, implemented
key changes at Board and management levels, and the dialogue with the South
African institution on funding for the Project is ongoing.
The Company is now pleased to have agreed the terms of a conditional placing
and subscription with new and existing investors to raise gross proceeds of
£2.5 million. The proceeds of this capital raise are expected to enable the
Company to progress towards unlocking the value from Ironveld's assets, which
the Board believes is not currently reflected in the Company's market
capitalisation.
Completion of the Placing and the Subscription, which is subject to obtaining
the consent of Ironveld's Shareholders, will enable the Company to capitalize
on its JORC-compliant polymetallic deposit within the Bushveld Igneous Complex
and commence positive cash flow at the Project from April 2025. Spanning a 28
km strike surface, the Directors believe that this deposit has the potential
to supply 15% of the global vanadium demand, 3% of the titanium demand, and
10% of the high-purity iron (HPI) powders demand annually over the next 30
years.
The Company's established offtake agreements and marketing strategy set the
foundation for sustainable growth across three key revenue streams:
· High-Purity Iron (HPI) Powder: Exceeding 99.5% Fe, catering to
specialized industrial needs.
· Vanadium Slag: Serving stable markets through partnerships that
ensure revenue stability and growth.
· Titanium Slag: With existing agreements and a strong potential for
direct sales, offering diverse market opportunities.
The Company's short-term goals are to produce samples of coarse and
water-atomized HPI products during Q1 2025 and construct a small demonstration
unit, which will enable the Company to validate product quality. Production
trials have successfully demonstrated operational capability and market
readiness together with securing offtake agreements with customers for these
HPI products is expected to facilitate access to further funding to expand
operations. A portion of the net proceeds from the Placing and the
Subscription will be used to complete the operational facilities at the mine
and the DMS plant, where the crushing plant has already been installed.
The Directors expect the Company's strategic positioning, coupled with robust
operational plans and market demand projections, will enable Ironveld to
generate significant profits and sustainable growth in the years to come based
on coarse iron powder, vanadium slag and titanium slag production. In
addition, the Directors believe there to be significant future growth
potential at the Project, with exploration targets including phosphates, iron,
vanadium and titanium, potential to double DMS magnetite production,
transition to higher value products in 2025 and plans are being made to expand
the smelter facilities.
2.2. Use of Proceeds
The Directors intend to use the net proceeds of the Placing and the
Subscription, along with the Company's existing cash resources, as follows:
· Smelter
works
£1.108 million
· To expand operations at the mine
£0.205 million
· Partial creditor
repayment £0.693
million
· Working capital and contingency
£0.246 million
2.3. Working capital
At 18 October 2024, the Company had a cash balance of £17,892 and total
creditors of £3,685,410 with £2,972,711 payable to South African entities
(including the outstanding loan owed to Warmbad) and £757,698 due to
creditors in the United Kingdom, including outstanding fees and/ or salaries
owed to directors and the outstanding Loan Facilities. The Company has
entered into agreements with certain of these creditors to settle a total of
£693,000 from the net proceeds of the Placing and the Subscription.
The Company has also entered into agreements with certain of its creditors to
settle a further amount of £231,900 through the issue of 644,167,519 New
Ordinary Shares at the Placing Price, being the Creditor Shares.
Following the above cash and share-based settlements with certain creditors,
the Company will have total creditors of £2,515,888. The Company intends to
reduce this creditor position from cash flows generated from production,
whilst ensuring the Group's operational objectives can be met.
In the event that the Company is unable to complete the Placing and the
Subscription or find an alternative means by which to raise capital, the
Company may be unable to realise its assets and discharge its liabilities in
the normal course of business and in these circumstances, there would be a
significant material uncertainty over the Company's ability to continue as a
going concern.
The Directors are of the view that there is potential for future growth at the
Project, with exploration targets including phosphates, iron, vanadium, and
titanium. In addition smelter production will focus on higher-value products
in 2025 and there is the potential of increasing DMS magnetite production.
3. Details of the Placing, the Subscription and other shares
to be issued
3.1. Placing and Subscription
Placing
In total, 6,125,000,000 New Ordinary Shares are proposed to be allotted and
issued pursuant to the Placing, at a price of 0.036 pence per New Ordinary
Share to raise gross proceeds of £2.205 million.
Turner Pope has been appointed to act as agent for the Company in connection
with the Placing pursuant to the Placing Agreement. The Placing is
conditional, inter alia, on the passing of the Resolutions to provide the
relevant authorities to the Directors to issue and allot further New Ordinary
Shares on a non-pre-emptive basis and Admission. Turner Pope has the right to
terminate the Placing Agreement in certain circumstances, including a material
breach of the warranties being provided by the Company pursuant to the Placing
Agreement, a material adverse change affecting the current or prospective
financial conditions or business affairs of the Group or a material breach of
the Company's obligations under the Placing Agreement.
Conditional on the passing of the Resolutions, application will be made for
the Placing Shares to be admitted to trading on AIM and it is expected that
their admission to AIM will take place on or around 21 November 2024.
The Placing Shares will, when issued, be credited as fully paid and will
rank pari passu in all respects with the New Ordinary Shares of the Company,
including the right to receive all dividends or other distributions made,
paid, or declared in respect of such shares after the date of issue of the
relevant Placing Shares.
Subscription
819,444,444 New Ordinary Shares are proposed to be allotted and issued
pursuant to the Subscription, at a price of 0.036 pence per New Ordinary
Share to raise gross proceeds of £0.295 million, with Tracarta subscribing
for 708,333,333 New Ordinary Shares and Warmbad subscribing for 111,111,111
New Ordinary Shares each pursuant to subscription letters between each of
Tracarta and Warmbad and the Company.
Warrants
The Company is proposing to issue subscribers to the Placing and the
Subscription, together with those receiving the remaining Transaction Shares,
with an aggregate of 9,807,092,461 Investor Warrants to subscribe for New
Ordinary Shares on the basis of one (1) warrant for every one (1) Transaction
Share. The Investor Warrants are exercisable at 0.072 pence for a period of
three years from the date of their grant, being Admission, and are
non-transferrable.
In addition, the Company is proposing to issue 694,444,444 Broker Warrants to
subscribe for 694,444,444 New Ordinary Shares, representing 10% of the gross
placing proceeds, with 596,666,667 Broker Warrants to subscribe for
596,666,667 New Ordinary Shares being issued to TPI and 97,777,777 Broker
Warrants to subscribe for 97,777,777 New Ordinary Shares being issued to
Hobart. The Broker Warrants are exercisable at the Placing Price for a period
of five years from the date of their grant, being Admission.
The grant of the Investor Warrants and the Broker Warrants is conditional
on the passing of the Resolutions to provide the relevant authorities to the
Directors to issue and allot further New Ordinary Shares on a non-pre-emptive
basis. None of the Investor Warrants or the Broker Warrants will be admitted
to trading on AIM or any other stock exchange.
Placing Agreement
Under the terms of the Placing Agreement between the Company and Turner Pope,
Turner Pope has agreed to use its reasonable endeavours to procure subscribers
for the Placing Shares at the Placing Price and will receive from the Company,
conditional upon Admission, a corporate finance fee and commission relating to
the placing of the Placing Shares.
The Company will give customary warranties and undertakings to Turner Pope in
relation, inter alia, to its business and the performance of its
duties. In addition, the Company has agreed to indemnify Turner Pope in
relation to certain liabilities that it may incur in undertaking the Placing.
Turner Pope also has the right to terminate the Placing Agreement in certain
circumstances prior to Admission, in particular, in the event that there has
been, inter alia, a material breach of any of the warranties. No part of the
Placing is being underwritten.
3.2. Settlement of Loan Facilities and certain creditors
Tracarta Working Capital Loans and Warmbad Loan
On 18 September 2023, the Company announced that it had entered into working
capital loan agreements with Peter Cox, Giles Clarke, Nicholas Harrison and
Tracarta providing for the provision of working capital loans up to maximum of
£500,000, of which £250,000 was to be made available by Tracarta. The loans
had a term of six months and carried interest at 11% per annum on funds drawn,
along with an arrangement fee of 2.5% of the loans' value.
Peter Cox's working capital loan up to a maximum amount of R3,500,000, being
circa £151,712, was provided to Ironveld Holdings (Pty) Ltd via Warmbad. This
loan had a term of 24 months and was interest free during its term. The
outstanding balance of the loan owed to Warmbad is £144,067.
Whilst the loan agreements with Giles Clarke and Nicholas Harrison were
undrawn, on 2 February 2024 the Company announced that it had agreed to extend
the term of the working capital loan totalling £250,000 with Tracarta by 12
months, and in addition had entered into a new £125,000 working capital loan
agreement with Tracarta, the latter loan having a term of 6 months, interest
at 11% per annum and an arrangement fee of 2.5% of the loan's value.
On 24 April 2024, the Company announced that it had entered into a further
working capital loan agreement with Tracarta enabling the Company to draw down
up to a further £125,000 on equivalent terms to the existing loans with
Tracarta.
As at 15 October 2024, the principle amount of the loans, including the
arrangement fees, owed by the Company to Tracarta is £500,000 all of which,
together with interest in the sum of £55,321, is outstanding.
Tracarta has agreed to capitalise the working capital loans made to Company,
with an outstanding balance, including interest, of £555,000 into
1,541,666,666 New Ordinary Shares, with the balance of interest continuing to
accrue until capitalised and then repayable in cash, and Warmbad has agreed to
capitalise its loan made to Ironveld Holdings (Pty) Ltd for the purpose of
assisting with operating expenses and creditor payments in the latter part of
2023 and during 2024, with an outstanding balance of £144,067 into
400,186,111 New Ordinary Shares.
Other creditors
Additionally, the Company has outstanding creditors in the sum of £3,685,410,
of which certain creditors, including Westleigh and Kristoffer Andersson in
the amount of £151,972, have agreed to the settlement of the outstanding
balance £46,337 in cash from the net proceeds of the Placing and the
Subscription and the settlement of the outstanding balance £231,900 by the
issue to them of New Ordinary Shares.
In settlement of the outstanding balance of £231,900 owed to certain
creditors, including Westleigh, the Company has agreed to issue 644,167,519
New Ordinary Shares at the Placing Price to those creditors.
Each recipient of Loan Settlement Shares, Directors' Settlement Shares or
Creditor Shares has signed a lock-in agreement with Turner Pope and the
Company pursuant to which they agree not to, and to use reasonable endeavours
to ensure that their related parties will not (subject to certain exceptions):
(i) dispose of any of their interests in their Loan Settlement Shares,
Directors' Settlement Shares or Creditor Shares for a period of three months
from Admission; and (ii) subject to certain conditions, following the expiry
of the lock-in period the Loan Settlement Shares, Directors' Settlement Shares
or Creditor Shares must be sold through Turner Pope.
3.3. Salary Shares and Related Party Opinion
Each of Giles Clarke, Nicholas Harrison and John Wardle being directors of the
Company, has deferred a portion of their salary in order to preserve cash
within the business. The aggregate gross amount owed to Giles Clarke, Nicholas
Harrison and John Wardle in respect of contractual fees is £144,583, of which
£44,997 of tax and employees' national insurance together with £19,639 of
employer's national insurance is to be paid in cash from the net Placing and
Subscription proceeds. Giles Clarke, Nicholas Harrison and John Wardle have
agreed to convert the balance of their outstanding contractual fees, in the
sum of £99,586 into 276,627,721 New Ordinary Shares at the Placing Price.
John Wardle via Tracarta and Peter Cox via Warmbad are also owed a further
£699,067 in respect of the Loan Facilities referred to above, and have agreed
to convert such accrued sums into New Ordinary Shares at the Placing Price.
As referred to above, each of Kris Andersson and Giles Clarke and Nicholas
Harrison via Westleigh as creditors of the Company are owed a further
£151,972 and have agreed to convert £82,424 of the amount owed into New
Ordinary Shares at the Placing Price.
Each of Giles Clarke, John Wardle, Kris Andersson, Nicholas Harrison and Peter
Cox is a related party of the Company for the purposes of the AIM Rules by
virtue of their status as directors of the Company.
Following the Capitalisation and completion of the Placing and the
Subscription, the above Directors' interests in the issued share capital of
the Company will be as follows (assuming no warrants, options or other rights
to subscribe for shares in the capital of the Company are exercised prior to
Completion):
Director's name No. of Existing Ordinary Shares (as at the date of this Document) % of Share Capital (as at the date of this document) Number of Transaction Shares No. of New Ordinary Shares (on Admission) % of Enlarged Share Capital (on Admission)(1)
G Clarke (2) 67,221,168 1.7% 297,763,888 364,985,056 2.66
J Wardle (3) 569,428,567 14.5% 2,341,416,610 2,910,845,177 21.18
K Andersson 0 0.0% 21,367,521 21,367,521 0.16
N Harrison (2) 48,562,761 1.2% 301,613,888 350,176,649 2.55
PJ Cox (4) 38,785,490 1.0% 511,297,222 550,082,712 4.00
(1)Assuming the issue of all of the New Ordinary Shares pursuant to the
Placing and the Subscription
(2)G Clarke and N Harrison's interests in 217,145,803 shares above are through
their shareholding in Westleigh.
(3)J Wardle's interest in some shares above is through his beneficial interest
in Tracarta.
(4)PJ Cox's interest in all shares above is through his beneficial interest in
Warmbad
John Wardle has a beneficial interest in Tracarta, Peter Cox has a beneficial
interest in Warmbad and each of Giles Clarke and Nicholas Harrison have
beneficial interests in Westleigh and as such, the issue of the Loan
Settlement Shares (and the relevant number of the Creditor Shares to
Westleigh) constitutes a related party transaction pursuant to Rule 13 of the
AIM Rules for Companies.
Each of Giles Clarke, Nicholas Harrison and John Wardle is a related party of
the Company for the purposes of the AIM Rules by virtue of their status as
Directors of the Company for the purpose of the issue of the Directors'
Settlement Shares.
Malebo Ratlhagane, being the independent director for this purpose, considers,
having consulted with the Company's nominated adviser, Cavendish, that the
terms of the Capitalisation and the issue of Transaction Shares and Investor
Warrants to the relevant directors or their associates companies is fair and
reasonable insofar as the Company's shareholders are concerned.
4. Capital Reorganisation
4.1. General
The nominal value of the Existing Ordinary Shares is currently 0.1 pence per
share. As a matter of English law, the Company is unable to issue shares at an
issue price which is below their nominal value and therefore cannot issue
Existing Ordinary Shares at the Placing Price. It is therefore proposed to
sub-divide each Existing Ordinary Share into one ordinary share of 0.01 pence
nominal value each and nine deferred shares of 0.01 pence nominal value each,
thus enabling the Company to lawfully implement the Placing and the
Subscription at the Placing Price and effect the Capitalisation.
Each New Ordinary Share resulting from the Capital Reorganisation will have
the same rights (including voting and dividend rights and rights on a return
of capital) as each Existing Ordinary Share except that they will have a
nominal value of 0.01 pence each.
The New Deferred Shares resulting from the Capital Reorganisation will have
the same rights as the Company's Existing Deferred Shares which, as their name
suggests, are very limited, being deferred to the Ordinary Shares, and
effectively carrying no value as a result. Accordingly, the holders of the New
Deferred Shares will be entitled to receive notice of and to attend but not
vote at general meetings of the Company, they are not entitled to receive any
dividends nor are they entitled to any payment on a return of capital until at
least £1,000,000 has been paid on each New Ordinary Share. No application
will be made for the New Deferred Shares to be admitted to trading on AIM.
The Company also has the power to arrange for all the Deferred Shares to be
transferred to a custodian or to be purchased for 1 pence only without the
prior sanction of the holders of the Deferred Shares. No share certificates
for the New Deferred Shares will be issued.
No new certificates for the Existing Ordinary Shares will be dispatched if the
Capital Reorganisation becomes effective.
A request will be made to the London Stock Exchange to reflect on AIM the
sub-division of the Existing Ordinary Shares into New Ordinary Shares of 0.01
pence each. Each Existing Ordinary Share standing to the credit of a CREST
account will be subdivided into one New Ordinary Share of 0.01 pence each and
nine New Deferred Shares of 0.01 pence each at 6.00 p.m. on 20 November 2024.
Following the Capital Reorganisation, the ISIN code for the New Ordinary
Shares will remain unchanged.
4.2. Taxation
Any person who is in any doubt as to his tax position or who is subject to tax
in a jurisdiction other than the United Kingdom is strongly recommended to
consult his professional tax adviser immediately.
5. Shareholder Approval
For the Capital Reorganisation, the Placing and the Subscription to proceed,
together with the issue and allotment of the Creditor Shares, the Loan
Settlement Shares and the Directors' Settlement Shares and grant of the
Investor Warrants and the Broker Warrants, Shareholder approval is required.
Shareholder approve is therefore being sought (i) to effect the Capital
Reorganisation; (ii) to give the Directors authority to issue and allot the
Placing Shares, the Subscription Shares, the Creditor Shares, the Loan
Settlement Shares and the Directors' Settlement Shares; (iii) to give the
Directors authority to grant the Investor Warrants and the Broker Warrants and
to issue and allot New Ordinary Shares pursuant to such warrants; (iv) to
dis-apply statutory pre-emption rights in respect of such allotments and
grants; and (v) in accordance with standard AIM practice, to provide the
Directors with a 20 per cent. general allotment authority on a non-pre-emptive
basis.
Note that the Directors have no current intention to issue or allot New
Ordinary Shares in addition to the allotments set out in this document.
In order to obtain the necessary Shareholder approval, a General Meeting of
the Company is to be held at which the Resolutions will be proposed. Further
information regarding the General Meeting is set out in paragraph 7 below.
The Directors believe that the Placing and the Subscription is the most
appropriate way to provide the capital necessary to meet the Company's future
requirements. The Directors urge Shareholders to vote in favour of the
Resolutions set out in the Notice.
6. General Meeting
A notice convening the General Meeting to be held at the offices of Cavendish,
One Bartholomew Close, London EC1A 7BL at 10.00 a.m. on 20 November 2024 is
set out at the end of this document.
7. Action to be taken by Shareholders
Whether or not you intend to be present at the meeting you are requested to
complete a proxy vote either online at
https://investorcentre.linkgroup.co.uk/Login/Login
(https://investorcentre.linkgroup.co.uk/Login/Login) , by CREST as set out in
the notes below, or in hard copy by requesting a proxy form from Link Group on
the contact details set out in the notes of the Notice. Hard copy proxy forms
and any proxy votes should be completed, signed and returned to the
Registrars, Link Group PXS 1, Central Square, 29 Wellington Street, Leeds LS1
4DL as soon as possible but in any event so as to arrive not later than 10.00
a.m. on 18 November 2024. The completion and return of a proxy vote will not
preclude you from attending the General Meeting and voting in person should
you subsequently wish to do so.
8. Recommendation
The Directors consider that the Placing and the Subscription will promote the
success of the Company for the benefit of its members as a whole. Accordingly,
the Directors unanimously recommend and strongly urge Shareholders to vote in
favour of the Resolutions to be proposed at the General Meeting as they intend
to do in respect of their own beneficial holdings representing approximately
18.4 per cent. of the Existing Ordinary Shares in issue as at the last
practicable date before publication of this document.
Yours faithfully,
Dr John Wardle
Chairman
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2024
Announcement of the Placing and the Subscription 30 October
Date of publication and posting of this document 30 October
Last date and time for receipt of Forms of Proxy 10.00 a.m. 18 November
General Meeting 10.00 a.m. 20 November
Announcement of the results of the General Meeting 20 November
Capital Reorganisation effective 6.00 p.m. 20 November
Admission and commencement of dealings in Transaction shares (and New Ordinary 8.00 a.m. 21 November
Shares (post Capital Reorganisation)) on AIM
CREST accounts credited with Transaction Shares in uncertificated form 21 November
Definitive share certificates in respect of Transaction Shares in certificated within 10 days of Admission
form despatched
Certificates in respect of the Investor Warrants despatched within 10 days of Admission
KEY STATISTICS
Existing Ordinary Shares in issue as at the date of the Document 3,934,996,886
1pence Deferred Shares in issue as at the date of the Document 322,447,158
0.1pence Deferred Shares in issue as at the date of the Document 5,894,917,569
New Ordinary Shares following the Capital Reorganisation 3,934,996,886
0.01pence Deferred Shares in issue following the Capital Reorganisation 35,414,971,974
New Ordinary Shares to be issued as part of the Placing 6,125,000,000
New Ordinary Shares to be issued as part of the Subscription 819,444,444
New Ordinary Shares to be issued in settlement of the Loan Settlement Shares 1,941,852,777
New Ordinary Shares to be issued in settlement of the Creditors Shares 644,167,519
New Ordinary Shares to be issued in settlement of the Directors' Settlement 276,627,721
Shares
Enlarged Share Capital following the issue of the Transaction Shares and the 13,742,089,347
Capital Reorganisation
Placing Price 0.036 pence
Gross proceeds of the Placing and the Subscription £2.5 million
Notes: the figures assume that no options / warrants are exercised prior to
Admission.
DEFINITIONS
The following definitions apply throughout this document unless the context
otherwise requires:
"Admission" the admission of the Transaction Shares to trading on AIM having become
effective in accordance with the AIM Rules;
"AIM" the AIM Market, a market operated by the London Stock Exchange;
"AIM Rules" together, the rules published by the London Stock Exchange governing the
admission to, and the operation of, AIM, consisting of the AIM Rules for
Companies (including the guidance notes thereto) and the AIM Rules for
Nominated Advisers, published by the London Stock Exchange from time-to-time;
"Broker Warrants" the 694,444,444 warrants to subscribe for 694,444,444 New Ordinary Shares
pursuant to the Broker Warrant Instrument;
"Broker Warrant Instrument" the warrant instrument creating 694,444,444 warrants to subscribe for
694,444,444 New Ordinary Shares at the Placing Price within five years from
the date of grant of a warrant;
"Capital Reorganisation" the proposed subdivision of each Existing Ordinary Share with a nominal value
of 0.1 pence into one New Ordinary Share with a nominal value of 0.01 pence
and nine deferred shares each with a nominal value of 0.01 pence, further
details of which are set out in paragraph 4 of the Letter from the Chairman in
this document;
"Capitalisation" the capitalisation by the Company of monies owed by it to Tracarta and Warmbad
pursuant to the Loan Facilities, certain of its creditors including Westleigh
and Kristoffer Andersson and certain Directors in respect of salaries and fees
into an aggregate of 2,862,648,017 New Ordinary Shares as described in
paragraph 3.2 of this document;
"Cavendish" Cavendish Capital Markets Limited, nominated adviser to the Company;
"City Code" City Code on Takeover and Mergers;
"Company" or "Ironveld" Ironveld Plc, incorporated and registered in England & Wales under the
Companies Act 1985, registered number 04095614 and having its registered
office at Unit D, De Clare House, Sir Alfred Owen Way, Pontygwindy Industrial
Estate, Caerphilly, Wales CF83 3HU;
"Creditor Shares" the 644,167,519 New Ordinary Shares to be issued and allotted by the Company
at the Placing Price by way of partial settlement of debts owed to certain of
the Company's creditors, including Westleigh and Kristoffer Andersson, as part
of the Capitalisation;
"CREST" the relevant system for paperless settlement of share transfers and the
holding of shares in uncertificated form, which is administered by Euroclear
UK & International Limited;
"CREST Regulations" the Uncertificated Securities Regulations 2001 (S.I. 2001/3755), as amended
from time to time;
"Deferred Shares" as the context requires, 1p Deferred Shares or 0.1p Deferred Shares issued
prior to the Capital Reorganisation becoming effective and the New Deferred
Shares issued upon the Capital Reorganisation becoming effective at the
Effective Time;
"1p Deferred Shares" deferred shares of 1 pence each in issue in the capital of the Company;
"0.1p Deferred Shares" deferred shares of 0.1 pence each in issue in the capital of the Company;
"Directors" or "Board" the board of directors of the Company, as at the date of this document, whose
names are set out on page 10 of this document;
"Directors' Settlement Shares" the 276,627,721 New Ordinary Shares to be issued and allotted by the Company
at the Placing Price by way of full and final settlement of outstanding fees
and/ or salaries owed to directors as part of the Capitalisation;
"Effective Time" 6.00 p.m. on 20 November 2024 (or, if the General Meeting is adjourned, 6.00
p.m. on the date of the adjourned General Meeting);
"Excluded Territory" each and any of Australia, Canada, Japan, New Zealand, the Republic of South
Africa or the United States
"Existing Deferred Shares" 1p Deferred Shares and 0.1p Deferred Shares in issue prior to the Capital
Reorganisation;
"Existing Ordinary Shares" ordinary shares of 0.1 pence each in issue in the capital of the Company;
"General Meeting" or "GM" the general meeting of the Shareholders of the Company to be held at the
office of Cavendish, One Bartholomew Close, London, EC1A 7BL at 10.00 a.m. on
20 November 2024;
"Group" the Company together with its subsidiaries, both directly and indirectly
owned;
"Investor Warrants" the 9,807,092,461 warrants to subscribe for 9,807,092,461 New Ordinary Shares
pursuant to the Investor Warrant Instrument;
"Investor Warrant Instrument" the warrant instrument creating 9,807,092,461 warrants to subscribe for
9,807,092,461 New Ordinary Shares at a price of 0.072 pence per share within
three years from the date of grant of a warrant;
"Loan Facilities" the loan facilities of an aggregate amount of £555,321 including interest and
fees as at 15 October 2024 provided to the Company by Tracarta and of
£144,067 provided to the Company by Warmbad;
"Loan Settlement Shares" the 1,941,852,777 New Ordinary Shares to be issued and allotted by the Company
to Tracarta and Warmbad (as applicable) at the Placing Price by way of full
and final settlement of outstanding amounts owed under the Loan Facilities as
part of the Capitalisation;
"London Stock Exchange" London Stock Exchange plc;
"New Deferred Shares" deferred shares of 0.01 pence each in the capital of the Company resulting
from the Capital Reorganisation;
"New Ordinary Shares" ordinary shares of 0.01 pence each in issue in the capital of the Company upon
the Capital Reorganisation becoming effective at the Effective Time;
"Notice" the notice of the General Meeting, which is set out at the end of this
document;
"Ordinary Shares" as the context requires, ordinary shares in the capital of the Company having
a nominal value of 0.1 pence each prior to the Capital Reorganisation becoming
effective and having a nominal value of 0.01 pence upon the Capital
Reorganisation becoming effective at the Effective Time;
"Placing" the conditional placing of the Placing Shares by Turner Pope with new and
existing investors at the Placing Price;
"Placing Agreement" the conditional placing agreement dated 30 October 2024 and made between
Turner Pope and the Company in relation to the Placing, further details of
which are set out in this document;
"Placing Price" 0.036 pence per Placing Share;
"Placing Shares" the 6,125,000,000 New Ordinary Shares to be issued pursuant to the Placing;
"Prospectus Regulation Rules" the prospectus regulation rules of the Financial Conduct Authority made
pursuant to the Financial Services and Markets Act 2000 (Prospectus)
Regulations 2019 (as amended);
"Registrars" Link Group;
"Resolutions" the resolutions to provide the Directors with the relevant authorities to,
inter alia, implement the Capital Reorganisation and issue and allot the
Transaction Shares, which are set out in the Notice;
"Shareholder(s)" holder(s) of the Ordinary Shares;
"Subscription" the conditional subscription for the Subscription Shares pursuant to the terms
of subscription letters;
"Subscription Shares" the 819,444,444 New Ordinary Shares to be issued pursuant to the Subscription;
"this document" this document, including the Notice at the end of this document;
"Tracarta" Tracarta Limited, a company in which John Wardle has a beneficial interest;
"Transaction Shares" together the Placing Shares, Subscription Shares, Loan Settlement Shares,
Creditor Shares and Directors' Settlement Shares;
"Turner Pope" Turner Pope Investments (TPI) Ltd, the Company's broker for the purposes of
the Placing;
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland;
"Warmbad" Warmbad Investment Holdings (Pty) Ltd, a Namibian company, in respect of which
Dr Peter Cox is a director and has a beneficial interest;
"Westleigh" Westleigh Investments Holdings Limited, a company in respect of which each of
Giles Clarke and Nicholas Harrison is a director and has a beneficial
interest; and
"in uncertificated form" recorded on the register of Ordinary Shares as being held in uncertificated
form in CREST, entitlement to which by virtue of the CREST Regulations, may be
transferred by means of CREST.
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