Ironveld confident as project study confirms 'compelling economics'

23rd Apr 2014 14:28

AIM-listed pig iron developer Ironveld saw its share price surge by a quarter on Wednesday after it announced that a Definitive Feasibility Study (DFS) has reaffirmed the 'compelling economics' for its eponymous project in South Africa.Ironveld said that the DFS confirmed the viability of the Ironveld Project to produce an exceptionally high grade iron product of 99.5% Fe, called High Purity Iron (HPI), which commands a premium to the pig iron price.Meanwhile, vanadium and titanium slag containing commercial grades of each element will also be produced and sold, which "add[s] to the project's robustness", according to Chief Executive Peter Cox.The project, which has a life in excess of 100 years, is expected to generate turnover of £26.4m and operating profits of £8.1m per annum. It is also projected to be cash-flow positive once production begins."This is a very exciting time for the company and we remain on track to commence construction later this year with first production scheduled for late 2015," Cox said.Ironveld said that the project has attracted interest from a number of capital providers and it is in advanced discussions with banks, other financial institutions and industry member "who are interested in providing the necessary capital as part of capital equipment and/or offtake agreements for the Project's HPI, vanadium and titanium".The stock was 25.6% higher at 11.15p in afternoon trade.BC