REG - Ironveld PLC - Update on DMS Magnetite Joint Venture

IronveldAnnouncement

01/09/2023 07:00

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RNS Number : 0312L  Ironveld PLC  01 September 2023

Ironveld Plc

("Ironveld" or the "Company")

Update on DMS Magnetite Joint Venture

 

Ironveld, the AIM quoted mining development company, is pleased to confirm
that its subsidiary, Ironveld Mining (Pty) Limited ("Ironveld Mining"), and
its Joint Venture ("JV") partner, Pace SA Pty Limited ("Pace"), have agreed
with a subsidiary of JSE-listed Sable Exploration and Mining Limited ("SEAM",
ticker code SXM) certain amendments to the funding and operational structure
of the DMS Magnetite operation currently being established at Ironveld's
mining area. The new structure retains Ironveld's ability to supply ore into
the JV and benefit from a share of positive cashflows without having to fund
the initial capital expenditure.

 

The JV between Ironveld and Pace, IPace Pty Limited ("IPace"), shall continue
to be responsible for erecting, operating, and maintaining the plant alongside
all marketing of the final product and Ironveld Mining will continue to supply
ore on a 'cost plus' basis to IPace.

 

The parties have now agreed that SEAM, via a subsidiary company Sable Platinum
Holdings (Pty) Limited ("SPH"), will advance all necessary funding of
approximately ZAR 15 million (approximately £650,000) for the establishment
of an initial quick start 10,000 tonnes per month ("tpm") capacity plant.
There will also be an option to fund future expansions in capacity, depending
on the success of the venture.

 

Once SPH's capital loan has been repaid out of 70% profits, it will retain a
50% interest and IPace will own 50% of the venture and remain entitled to 50%
of all profits.

 

SEAM and Pace have both introduced significant offtake customers to IPace, and
forecasted tonnage volumes are now approximately double the level envisaged in
early 2023 when Ironveld Mining and Pace established the JV. The amendments to
percentage interests between the parties will have a negligible effect on the
positive cashflows likely to accrue to Ironveld.

 

This revised structure maintains the benefits for Ironveld Mining in being
able to mine and sell additional ore, including 'fines' that would otherwise
not be suitable for the Group's Rustenburg smelter. The reduced upfront
capital requirement for a smaller and more efficient plant, which minimises
unused capacity versus the original plant design, means that, based on
anticipated sales, the period before such capital is repaid is also reduced,
thereby bringing forward the point where positive cashflows are likely to
arise for IPace.

 

Ground works and civil works at the site are progressing well, with the
expectation of the plant to be installed in around four weeks, and first sales
to follow approximately four to six weeks after that.

 

Martin Eales, Chief Executive Officer, said: "Ironveld and Pace welcome SEAM
as a funding partner for the DMS Magnetite Joint Venture. The DMS Magnetite
project is beneficial for Ironveld Mining in terms of reducing overall average
mining costs and should in time contribute positive cashflow, without us
having to divert funding from our core smelting activities in order to
establish the venture."

 

James Allan, Chief Executive Officer of SEAM, said: "Sable is really pleased
to be partnering with IPace in this exciting project that we believe will
generate good cashflow for all the parties and provide a base for further
developments."

 

For further information, please contact:

 Ironveld plc                                                c/o BlytheRay

 Martin Eales, Chief Executive Officer                       +44 20 7138 3204

                                                             +44 20 7220 0500

 finnCap (Nomad and Broker)

 Christopher Raggett / Charlie Beeson / George Dollemore

 Turner Pope (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/) .

 

 

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