Ironveld rises progress towards production

17th Oct 2022 14:28

(Sharecast News) - Ironveld updated the market on recent progress at its subsidiaries Ironveld Smelting and Ironveld Mining on Monday, as they moved towards production.

The AIM-traded firm said pre-operations power at the Rustenburg smelter was now fully installed, and systems and equipment testing was underway.

It said the smelter refurbishment was on schedule, with first production expected in the first quarter of 2023.

Mine planning was also on track to start operations in the current quarter, to provide ore to the smelter.

On the financial front, Ironveld said the debt purchase agreement with its sole creditor was expected to be signed in the coming two weeks, with the exclusivity period extended.

"Commencement of mining operations has been scheduled to begin in the current quarter, in order to cost-efficiently supply a feedstock of magnetite ore for the smelter as the three furnaces are brought into operation sequentially," the board said in its statement.

"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 said it was currently investigating options to produce a product from the 'fines', which were not suitable for the smelter, for third-party purchasers, thus reducing average mining costs per tonne.

"On 31 August, Ironveld announced that the share purchase agreement to acquire 100% of Ferrochrome Furnaces (FCF) had been signed by its subsidiary company Ironveld Smelting.

"The only condition precedent in the agreement is the signing of a debt purchase agreement between Ironveld Smelting and the sole creditor of FCF for a total of ZAR 115m (£5.75m)."

Ironveld said it and the sole creditor had agreed "all commercial issues" in the debt purchase agreement, with signing expected in the next fortnight.

"The sole creditor has also confirmed Ironveld's exclusivity remains in place until the debt purchase agreement is signed.

"Following completion of the debt purchase agreement, Ironveld and the business rescue practitioner will proceed with the formal steps to remove FCF from business rescue."

At 1317 BST, shares in Ironveld were up 2.35% at 0.26p.

Reporting by Josh White at Sharecast.com.