REG - Ironveld PLC - Interim results for the 6 months ended 31 Dec 2022
30/03/2023 07:00
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RNS Number : 6715U Ironveld PLC 30 March 2023
30 March 2023
IRONVELD PLC
("Ironveld" or the "Company")
Interim results for the six months ended 31 December 2022
Ironveld plc, 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") is pleased to announce its interim
results for the six months ended 31 December 2022 ("the period").
Highlights
· A transformative period for the Company saw the acquisition and
commencement of refurbishment of the smelter facility at Rustenburg, from
August 2022 onwards;
· Acquisition and refurbishment funded by an equity Placing of
£4.50 million, which completed in August 2022;
· First mining activities also commenced prior to period end, to
ensure consistent supply of magnetite ore to the smelter; and
· Post period end saw first production from the smelter, an
additional £2.0 million fundraising from shareholders and the smelter
acquisition becoming unconditional.
Outlook
· First sales on track for Q2 2023 in line with original plans;
· Smelter anticipated to ramp up to full production capacity by mid
2023 with strong demand for Ironveld's suite of speciality metal products; and
· Additional revenues expected from DMS Magnetite joint venture,
also due around mid 2023.
Martin Eales, CEO, said: "I am very pleased with the progress we made over the
half year period to December 2022 and have already made so far this year. The
coming months are due to bring many more positive developments as we build up
production at the smelter and make progress with our other projects."
For further information, please contact:
Ironveld plc c/o BlytheRay
Martin Eales, Chief Executive Officer 020 7138 3204
finnCap (Nomad and Broker) 020 7220 0500
Christopher Raggett/Charlie Beeson
Turner Pope (Joint Broker) 020 3657 0050
Andy Thacker/James Pope
BlytheRay 020 7138 3204
Megan Ray/Tim Blythe
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/) .
Chairman's Statement:
This was a transformational period for the Company. In July 2022, Ironveld
announced that it had conditionally raised gross proceeds of £4.50 million
via a Placing of new ordinary shares at 0.30 pence per share and the
transaction was approved by shareholders in August 2022. The net funds from
the Placing were applied to the acquisition out of Business Rescue and
refurbishment of the smelter facility in Rustenburg, South Africa, previously
owned by Ferrochrome Furnaces (Pty) Limited ("FCF"), for which the Company had
agreed purchase terms in May 2022. The Sale and Purchase Agreement in respect
of the acquisition was signed on 31 August 2022 and the Debt Purchase
Agreement with the sole creditor was signed on 1 November 2022. The
acquisition became unconditional on 29 March 2023.
In mid-August 2022, Ironveld's team commenced its six to nine month work
programme to refurbish the smelter and the Company was able to announce that
production from the first of three planned operating furnaces had been
achieved in January 2023. Alongside the rapid progress at the smelter,
Ironveld's subsidiary, Ironveld Mining (Pty) Limited ("Ironveld Mining"),
commenced preparatory work for mining activities in the fourth quarter of
2022, and operations are now underway to provide required magnetite ore to the
smelter on a continuous basis.
The total number of employees across the Ironveld Group reflected this rapid
expansion in activities, increasing from 9 South Africa based employees as at
30 June 2022 to 130 as at 31 December 2022, a development of which we are
justifiably proud.
We remain committed to operating responsibly, working closely with
stakeholders and local communities at grassroots level to improve standards of
living. Under the terms of the 'Social and Labour Plans' ("SLPs") that
Ironveld Mining has had approved by the South African Department of Mineral
Resources and Energy alongside our existing mining rights, Ironveld Mining has
undertaken to fund and address local infrastructure requirements in the areas
in which we operate. These improvements include: water supply to local
municipalities; electrification and electricity upgrades; and roads and
stormwater infrastructure. In addition, Ironveld Mining has committed to
provide training, bursaries and employment to the various host communities.
Financial
Administrative expenses totalling £581,000 (H1 2021: £384,000) were incurred
in the period reflecting a return to normalised levels of expenditure compared
to the comparable period, the commencement of operational activities in the
fourth quarter of 2022 and the costs associated with a General Meeting
requisitioned by a shareholder.
The Group recorded a loss before tax of £522,000 (H1 2021: loss of
£382,000), broadly in line with Administrative expenses. The Company does not
plan to pay a dividend for the six months ended 31 December 2022.
There were no borrowings at the period end (30 June 2022: borrowings of
£499,000) as all outstanding balances were settled either in cash or by the
issue of new shares in August 2022.
Post Period End Events
As noted above, first production was achieved at the Rustenburg smelter in
January 2023.
In February 2023, the Company announced an equity Placing to raise gross
proceeds of £2.0 million at a price of 0.30p, and this was approved by
shareholders in March 2023.
In March 2023 the Company announced that the acquisition of FCF had become
unconditional.
Transactions with Grosvenor
Ironveld announced two agreed investment transactions with Grosvenor Resources
(Pty) Limited ("Grosvenor") in late 2021. Company updates since that date have
noted that Grosvenor was in talks to finalise its own funding to complete the
agreed transactions, and that Grosvenor has also been in regular and open
dialogue with the Company. As at today's date, the Company is aware that talks
with potential funders remain ongoing and the Board believes that a financing
offer has a good chance of being made however, given the changes in Ironveld's
position since the original agreements with Grosvenor were signed, any
financing offer will be assessed on its merits and its potential to create
value for all shareholders.
Going concern
Given the recent cash inflow from the equity Placing and the commencement of
sales from the smelter, the Directors have a reasonable expectation that the
Group will have adequate resources to continue in operational existence for
the foreseeable future being 12 months from the date of the approval of these
interim financial statements in the absence of any further funding and
therefore present these accounts on a Going Concern basis.
Outlook
There is a great deal to look forward to in 2023. We anticipate securing first
sales from the smelter in the second quarter and reaching full operational
production capacity around the middle of the year, with the Company now fully
funded to achieve this. There is strong demand from customers for all of our
three products of high purity iron, vanadium slag and titanium slag. In
addition, Ironveld Mining will benefit from its joint venture with Pace SA to
produce and sell DMS grade magnetite from the mine in mid 2023.
In due course the Company also anticipates investing in further equipment at
the smelter to upgrade the high purity iron product to powder form, which will
significantly enhance revenues, and is seeking innovative ways to finance this
expansion.
We would like to thank all of our shareholders for their continuing support
for both the Company and the Project and we look forward to providing further
updates in the near future.
Giles Clarke
Chairman
30 March 2023
IRONVELD PLC
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2022
6 Months 6 Months 12 Months
ended ended ended
31.12.22 31.12.21 30.06.22
£'000 £'000 £'000
Administrative expenses (581) (384) (798)
Operating loss (581) (384) (798)
Other gains and losses 47 - -
Investment revenues 23 2 4
Finance costs (11) - (17)
Loss before taxation (522) (382) (811)
Taxation - - -
Loss for the period (522) (382) (811)
Attributable to owners of the company (520) (379) (806)
Non-controlling interests (2) (3) (5)
(522) (382) (811)
Loss per share (pence)
Basic (0.02p) (0.03p) (0.06p)
Diluted n/a n/a n/a
The accompanying notes form an integral part of these financial statements.
IRONVELD PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022
6 Months 6 Months 12 Months
ended Ended ended
31.12.22 31.12.21 30.06.22
£'000 £'000 £'000
Loss for the period (522) (382) (811)
Exchange differences on the translation of foreign operations (576) (1,795) (199)
Total comprehensive loss for the period (1,098) (2,177) (1,010)
Attributable to:
Owners of the company (1,015) (1,894) (974)
Non-controlling interest (83) (283) (36)
(1,098) (2,177) (1,010)
The accompanying notes for an integral part of these financial statements.
IRONVELD PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022
As at As at
31.12.22 30.06.22
£'000 £'000
Non-current assets
Exploration and evaluation 26,634 26,350
Property, plant and equipment 1,212 2
Other receivables 6 3
27,852 26,355
Current assets
Trade and other receivables 507 198
Cash and bank balances 779 17
1,286 215
Total assets 29,138 26,570
Current liabilities
Trade and other payables (508) (619)
Borrowings - (499)
(508) (1,118)
Non-current liabilities
Lease liabilities (46) -
Deferred tax liabilities (4,616) (4,730)
(4,662) (4,730)
Total liabilities (5,170) (5,848)
Net assets 23,968 20,722
Equity
Share capital 12,013 10,453
Share premium 24,101 21,379
Other reserve 74 12
Retained earnings reserve (8,941) (8,421)
Foreign currency translation reserve (6,540) (6,045)
Equity attributable to owners of the company 20,707 17,378
Non-controlling interests 3,261 3,344
Total equity 23,968 20,722
The accompanying notes form an integral part of these financial statements.
IRONVELD PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
Share capital Share premium Retained earnings Other reserve Attributable to the owners of the company Non-controlling interests Total equity
Foreign currency translation reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 10,436 21,261 (7,618) (5,877) 15 18,217 3,380 21,597
Loss for the year - - (806) - - (806) (5) (811)
Exchange differences on translation of foreign operations - - - (168) - (168) (31) (199)
Issue of shares 17 118 - - - 135 - 135
Exercise of share warrants - - 3 - (3) - - -
Balance at 30 June 2022 10,453 21,379 (8,421) (6,045) 12 17,378 3,344 20,722
Loss for the period - - (520) - - (520) (2) (522)
Issue of shares and warrants 1,560 2,722 - - 62 4,344 - 4,344
Exchange differences on translation of foreign operations - - - (495) - (495) (81) (576)
Balance at 31 December 2022 12,013 24,101 (8,941) (6,540) 74 20,707 3,261 23,968
IRONVELD PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2022
6 Months 6 Months 12 Months
Ended Ended Ended
31.12.22 31.12.21 30.06.22
£'000 £'000 £'000
Net cash from operating activities (799) (48) (337)
Investing activities
Interest received 23 2 4
Purchase of property, plant and equipment (1,172) - (1)
Purchase of exploration and evaluation assets (917) (198) (396)
Net cash used in investing activities (2,066) (196) (393)
Financing activities
Proceeds on issue of equity (net of costs) 4,031 - -
Proceeds from new loans - - 482
Repayment of loans (403) - -
Net cash generated in financing activities 3,628 - 482
Net increase/ (decrease) in cash and cash equivalents 763 (244) (248)
Cash and cash equivalents at the start of the period 17 270 270
Effect of foreign exchange rates (1) (2) (5)
Cash and cash equivalents at end of period 779 24 17
Note to the cash flow statement
Operating loss (581) (384) (798)
Depreciation on property, plant and equipment 6 1 1
Foreign exchange differences (50) - -
Share based payments 60 - 100
Operating cash flows before movements in working capital (565) (383) (697)
Movement in receivables (316) 27 (8)
Movement in payables 82 308 368
Net cash from operating activities (799) (48) (337)
The accompanying notes form an integral part of these financial statements.
IRONVELD PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
1 Basis of preparation and accounting policies
The results for the six months to 31 December 2022 have been prepared under
International Financial Reporting Standards (IFRS) as adopted by the EU and
International Accounting Standards Board.
The accounting policies are consistent with those of the annual financial
statements for the year ended 30 June 2022, as described in those financial
statements.
The financial information does not constitute statutory accounts as defined by
section 435 of the Companies Act 2006. Full accounts of the company for the
year ended 30 June 2022 on which the Auditors gave an unqualified report, have
been delivered to the Registrar of Companies.
2 Loss per share
The calculation of basic and diluted loss per share is based upon the loss for
the period and the weighted average number of ordinary shares in issue during
the period.
6 Months 6 Months 12 Months
to 31.12.22 to 31.12.21 to 30.06.22
'000 '000 '000
Weighted average number of shares 2,628,958 1,316,440 1,322,832
Options/warrants - dilution - - -
2,628,958 1,316,440 1,322,832
Pence Pence Pence
Basic loss per share - continuing (0.02) (0.03) (0.06)
Diluted earnings per share n/a n/a n/a
Where the Group reports a loss for any period, then in accordance with IAS 33,
the share options and warrants in issue are not considered dilutive.
3 Registered office and copies of the report
The registered office is Ironveld plc, Unit D De Clare House Sir Alfred Owen
Way, Pontygwindy Industrial Estate, Caerphilly, Wales, CF83 3HU and copies of
this report are available from the registered office.
IRONVELD PLC
OFFICERS, ADVISORS AND AGENTS
Directors: Giles Clarke
(Chairman)
Martin Eales (Chief Executive
Officer)
Nick Harrison (Non-Executive
Director)
Peter Cox (Technical
Director)
John Wardle (Non-Executive
Director)
Secretary: Brian
James
Company Number: 04095614 (England and Wales)
Registered Office: Ironveld Plc
Unit D De Clare House Sir Alfred Owen Way
Pontygwindy Industrial Estate
Caerphilly Wales CF83 3HU
Nominated Advisor finnCap Ltd
One Bartholomew Close
London EC1A 7BL
Joint Broker finnCap Ltd
One Bartholomew Close
London EC1A 7BL
Joint Broker Turner Pope
8
Frederick's Place
London EC2R 8AB
Solicitors: Kuit Steinart Levy LLP
3
St Marys Parsonage
Manchester M3 2RD
Auditors: Crowe U.K. LLP
55 Ludgate Hill
London EC4M 7JW
Bankers: HSBC
97 Bute Street
Cardiff CF10 5NA
Registrars: Link Asset Services
10(th) Floor Central Square
29 Wellington Street
Leeds LS1 4DL
Financial PR BlytheRay
4
- 5 Castle Court
London EC3V 9DL
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