Ironveld PLC Project Finance Facilities and Offtake (8239L)
October 06 2016 - 1:00AM
UK Regulatory
TIDMIRON
RNS Number : 8239L
Ironveld PLC
06 October 2016
6 October 2016
IRONVELD PLC
("Ironveld" or the "Company")
Project Finance Facilities and Offtake
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 that the Industrial Development Corporation
("IDC") has approved a R244m funding package to the Project and is
in the process of executing formal funding agreements.
Highlights
-- The IDC will provide senior loan facilities ("the
Facilities") to Ironveld Mining (Pty) Ltd and Ironveld Smelting
(Pty) Ltd, subsidiaries of Ironveld plc. The total value of the
facilities represents R244.08 million (approx.US$17.9 million).
-- The funds will form part of an approx. R841 million financing
package for the development of the Project.
-- The IDC is providing funding for the Broad-Based Black
Economic Empowerment's ("BBBEE") capital contribution in Ironveld
Smelting (Pty) (in line with its 26% shareholding in the smelting
project).
-- The Company is also in the advanced stages of completing the
remaining debt agreements for the Project.
-- Land lease agreements also expected to be received shortly.
Established in 1940, the IDC is a national development finance
institution set up to promote economic growth and industrial
development. It is owned by the South African government under the
supervision of the Economic Development Department. The IDC's main
objective is to be the primary source of commercially sustainable
development and innovation to benefit both South Africa and the
rest of Africa.
The following facilities have been approved:
1. R100.80 million Preference Shares (BBBEE Shareholding)
2. R101.1 million Senior Loan to Ironveld Smelting (Pty) Ltd
3. R18.1 million Senior Loan to Ironveld Mining (Pty) Ltd
4. R24.08 million capitalized interest
Offtake
The Company has also finalised an offtake agreement with Oreport
(Pty) Ltd for 100 per cent of the HPI powder production for a
period of five years from first production. This represents 42,000
tonnes per annum of HPI (as projected in the Projects Definitive
Feasibility Study). Oreport (Pty) Ltd is also taking 100 per cent
of the titanium slag as previously announced. The Company has now
signed offtake agreements for all three products.
Peter Cox, CEO said:
"The IDC is an extremely important partner to have on board and
we are very pleased to be working with them on this strategically,
economically and socially important project for South Africa. This
is a significant step forward in the funding of our project and we
are confident of closing the remaining debt package shortly.
With such a significant financial partner in South Africa, who
completed an extensive due diligence exercise on the project and
offtake secured across our three products, we are now in the
strongest possible position to conclude the financing package on
the best terms for shareholders and move towards construction.
The team remains firmly focused on delivering returns to our
shareholders and on delivering this highly exciting project."
Giles Clarke, Chairman said:
"This material financial support from the South Africa
government is a significant milestone in the Company's development.
I look forward to updating you shortly with the complete funding
package."
For further information, please contact:
Ironveld plc c/o Camarco
Peter Cox, Chief Executive 020 3757 4980
Shore Capital and Corporate Limited
Stephane Auton / Toby Gibbs (corporate
finance)
Jerry Keen (corporate broking) 020 7408 4090
Camarco
Gordon Poole / Billy Clegg 020 3757 4980
Notes to Editors:
Ironveld (IRON.LN) is the owner of a High Purity Iron, Vanadium
and Titanium project located on the Northern Limb of the Bushveld
Complex in Limpopo Province South Africa. Ironveld expects to mine
its own VTM ore as feedstock for a 15MW DC smelter which will
produce speciality iron products including high purity iron powder
as well as vanadium and titanium slag products.
The Definitive Feasibility Study published in April 2014
confirms the project's viability to deliver an exceptionally high
grade iron product (99.5% Fe) called High Purity Iron which
commands a premium in the market place. High Purity Iron Powder is
widely used in powder metallurgy, in magnetic materials and in
manufacturing of welding rods. Vanadium and Titanium slag
containing commercial grades of vanadium and titanium will also be
produced and sold. Vanadium has historically been used as
ferrovanadium or as a steel additive adding a considerable increase
of strength to steel. However it is the development of vanadium
redox flow battery systems for grid energy storage applications
that has the most potential to have a significant impact on future
vanadium demand. Titanium Slag is an upgraded white pigment that is
used in the manufacture of paint, paper and plastics.
Ironveld's Board includes; Giles Clarke as Chairman, Peter Cox
as CEO, Vred von Ketelhodt as CFO, Nick Harrison and Rupert Fraser
as a Non-Executive Directors.
Ironveld is an AIM traded company. For further information on
Ironveld please refer to www.ironveld.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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