TIDMIRON
RNS Number : 0220O
Ironveld PLC
27 January 2023
Ironveld Plc
("Ironveld" or the "Company")
DMS Grade Magnetite Joint Venture Agreement
Ironveld is pleased to confirm that its subsidiary, Ironveld
Mining (Pty) Limited ("Ironveld Mining"), has entered into a Joint
Venture Agreement ("JVA") with Pace SA (Pty) Limited ("Pace"), as
equal partners to produce and sell Dense Media Separation ("DMS")
grade magnetite from Ironveld's mine in Limpopo, South Africa.
Highlights
-- Ironveld to participate in a 50:50 joint venture ("JV") to
process and sell DMS grade magnetite, to be sourced from existing
mining operations;
-- All initial capital and establishment costs of approximately
ZAR 35 million (GBP1.65 million) to be funded by Ironveld's JV
partner, Pace SA (Pty) Limited;
-- Maximum design capacity of beneficiation plant approximately 60 tonnes per hour; and
-- First production and sales from the JV expected mid 2023.
Martin Eales, CEO of Ironveld, said : "This is an exciting and
value additive transaction for Ironveld, which will utilise our
existing mining infrastructure to supply extra quantities of ore,
at multiples of the expected smelter requirements per month, to the
JV from which we expect profitable cashflow within months. We would
like to thank Pace for funding the initial capital contribution at
a time when we are focusing our resources on the Rustenburg smelter
ramp up, and we look forward to working with them."
Ms Thabisa Hanise, CEO of Pace, said : "This opportunity is a
highly attractive legacy project in South Africa and forms an
important part of the development of Pace's vision. I look forward
to a long and successful relationship with Ironveld."
Details of the Joint Venture Agreement
The JVA states that Ironveld Mining and Pace will establish a
newly incorporated company to be called IPace Pty Limited ("IPace")
owned in equal 50% shares. Pace will fund all necessary capital
equipment and establishment costs of a beneficiation plant to
produce the DMS grade magnetite, currently estimated at
approximately ZAR 35 million (approximately GBP1.65 million), which
will be sited on Ironveld's Lapon mining area.
Ironveld Mining will sell magnetite ore to the JV at cost for
processing into DMS grade magnetite and be responsible for
operating the beneficiation plant, whilst Pace will be responsible
for trading the DMS grade magnetite to end customers.
Ironveld and Pace have agreed to share all profits arising from
the JV (after mining costs, production costs and management fees)
on a 50:50 basis, save for an initial period whereby Pace will
recoup its capital funding on a 60:40 profit share basis.
Further Information on Pace
Pace SA was established in 2009 and is a South African company
specialising in Mining and Industrial supply chain solutions in the
Southern African region. Pace currently trades DMS grade magnetite
as a part of its business.
Planned Operations
The beneficiation plant will have a maximum capacity of
approximately 27,000 tonnes per month of DMS grade magnetite, based
on a design throughput of 60 tonnes per hour. The plant equipment
includes screens, crushers, mill and a low intensity magnetic
separator ("LIMS").
Feedstock for the beneficiation plant will be delivered directly
from Ironveld Mining's operations which are also providing material
for the Rustenburg smelter. Crucially, approximately 30% of the
normal run of mine material is classed as "fines" which are
unsuitable for the smelter but can be processed into DMS grade
magnetite, thereby enabling Ironveld to earn a revenue stream from
what was previously a waste product.
The demand for magnetite ore by the JV will have a material
positive impact in reducing Ironveld's average mining costs per
tonne, and the JV will refund Ironveld's mining costs and
management fees prior to profit share.
All operations will take place under Ironveld Mining's existing
permits and no further regulatory approvals are required.
Pace anticipates selling the DMS grade magnetite to a number of
customers in the market.
Timetable
Ironveld and Pace expect that site preparation, plant
procurement and construction will take approximately four to five
months, with first sales of DMS grade magnetite in mid 2023.
For further information, please contact:
Ironveld plc c/o BlytheRay
Martin Eales, Chief Executive Officer 020 7138 3204
finnCap (Nomad and Broker)
Christopher Raggett
Charlie Beeson 020 7220 0500
Turner Pope (Joint Broker)
Andy Thacker
James Pope 020 3657 0050
BlytheRay
Megan Ray
Tim Blythe 020 7138 3204
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.
Ironveld is an AIM traded company. For further information on
Ironveld please refer to www.ironveld.com .
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
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