Ferrum Crescent reaches final agreement with AAI on Moonlight project

18th Mar 2014 10:09

Ferrum Cresent shares rose strongly on Tuesday after the group announced it had signed a final investment agreement with Anvwar Asian Investment (AAI) to progress the bankable feasibility study (BFS) at the Moonlight Iron Ore Project in South Africa. The company will be paid a total of $10m by AAI in return for a 35% interest in the subsidiary company holding the Moonlight assets, Ferrum Iron Ore. Ferrum Crescent will recommence activity on the BFS once it has received the first $1m. The first payment of $500,000 will be paid to Ferrum Iron Ore by March 24th, with the second scheduled for April 30th. The key differences to the original letter of intent is that there is no fixed payment schedule up to December 31st 2015 cut-off and no fixed expenditure contribution from AAI in addition to the $10m payment.Ferrum Managing Director, Tom Revy, said: "I believe the recommencement of the BFS is the first step towards realising the true value of the project to Ferrum Crescent investors. The investment by AAI directly into the Project clearly highlights the undervalued position of the company."The company said on its website that it plans to mine at Moonlight and then pump the iron ore slurry by pipeline to a manufacturing facility near a railhead at Thabazimbi in Limpopo. The planned production is 6m tonnes per annum. Chairman Ed Nealon further explained: "[The] agreement is the definitive arrangement between the Omani based AAI group and ourselves. We receive funds upfront with our partners allotting more investment as the BFS progresses. I now look forward to progressing key elements of the BFS at Moonlight under the supervision of Tom Revy."NR