REG - Ironveld PLC - Progress Update

IronveldAnnouncement

17/10/2022 07:00

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RNS Number : 0046D  Ironveld PLC  17 October 2022

Ironveld Plc

("Ironveld" or the "Company")

Progress Update

 

Ironveld (AIM:IRON) is pleased to provide a further update on progress made by
its subsidiaries Ironveld Smelting Pty Limited ("Ironveld Smelting") and
Ironveld Mining towards production.

Highlights

·    Pre-Operations power at the Rustenburg smelter now fully installed
and systems and equipment testing underway;

·    Smelter refurbishment on schedule and first production anticipated in
Q1 2023;

·    Mine planning on track to commence operations in current quarter to
provide ore to the smelter; and

·    Debt Purchase Agreement with sole creditor anticipated to be signed
in coming two weeks, with Exclusivity extended.

Ironveld Smelting

Power supply

As announced on 12 September 2022, Enernet Global Inc. ("Enernet") has
successfully installed a pre-operations power supply at the Rustenburg smelter
that is being used to test and recommission the plant.  Further temporary
additional power will be added to this facility to enable scaling up of plant
operations in the coming months prior to full completion of Enernet's
optimised power solution (including solar, battery storage and gas
generation), expected in Q3 2023.

The Rustenburg smelter will not be reliant on the South African electricity
grid at any stage of production, thereby removing any risk to operations
caused by Eskom's daily programme of 'load shedding'.

Furthermore, Ironveld and Enernet have agreed to incorporate certain aspects
of the required refurbishment upgrades to the electrical system at the smelter
into Enernet's project installation, thereby enabling Ironveld to make savings
in planned short term capital expenditure.

Testing, Recommissioning and first Production

A planned programme of systems and equipment testing and upgrades is now
underway at the smelter and orders have been placed for critical long lead
time components. Where specialist skills have been identified as being needed
for the refurbishment work specialist contractors have been engaged and are
active on site.  Based on a review of work successfully completed to date,
Ironveld Smelting anticipates first production of its suite of products (high
purity iron, vanadium in slag and titanium in slag) in Q1 2023, in line with
its original estimate of the six to nine month refurbishment programme.

 

Labour Force

 

Since completion of the placing in August 2022, which enabled the Company to
proceed with the Ferrochrome Furnaces Pty Limited ("FCF") acquisition,
Ironveld Smelting has taken rapid steps to recruit appropriately skilled
operational and maintenance staff for the smelter operation.  As at today's
date around 40% of envisaged total employees have commenced work or have
accepted employment offers. These staff members are currently engaged in the
refurbishment work.

 

Debt Purchase Agreement

On 31 August 2022 Ironveld announced that the Share Purchase Agreement ("SPA")
to acquire 100% of FCF had been signed by its subsidiary company Ironveld
Smelting.  The only condition precedent in the SPA is the signing of a Debt
Purchase Agreement ("DPA") between Ironveld Smelting and the sole creditor of
FCF for a total of ZAR 115 million (approximately £5.75 million).

 

Ironveld and the sole creditor have agreed all commercial issues in the DPA
and it is expected to be signed in the next two weeks.  The sole creditor has
also confirmed Ironveld's exclusivity remains in place until the DPA is
signed.  Following completion of the DPA, Ironveld and the Business Rescue
Practitioner will proceed with the formal steps to remove FCF from Business
Rescue.

 

 

Ironveld Mining

 

Commencement of mining operations has been scheduled to begin in the current
quarter (Q4 2022) in order to cost efficiently supply a feedstock of magnetite
ore for the smelter as the three furnaces are brought into operation
sequentially. Necessary contractors have been selected and recruitment of key
operational staff is substantially complete.

 

When fully operational the smelter will require approximately 40,000 tonnes of
ore per annum, a relatively modest amount that can be effectively mined with a
small equipment fleet. Based on current demand in the South African mining
industry, Ironveld Mining is currently investigating options to produce a
product from the 'fines', which are not suitable for the smelter, for third
party purchasers and thereby reduce average mining costs per tonne.

 

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

 

 

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