Grosvenor Transaction Update & Further Investment

RNS Number : 3409W

Ironveld PLC

21 December 2021

 

Ironveld Plc

("Ironveld" or the "Company")

Update on Grosvenor Transaction and Additional Investment

Further to the announcements dated 9 November 2021 and 2 December 2021 in connection with the agreed £5.6 million subscription by Grosvenor Resources Pty Limited ("Grosvenor"), Ironveld announces that the two parties continue to remain in close regular contact concerning the closing of the transaction which is still expected to complete in accordance with its terms shortly.

In addition to the Subscription Agreement, the two parties have now agreed subject to contract an additional transaction which, if completed, will see Grosvenor purchase 51% of the equity of one of Ironveld's subsidiary companies, Luge Prospecting and Mining Company Pty Limited ("Luge") for ZAR 50 million (approximately £2.4 million), taking Grosvenor's total agreed investment in Ironveld to approximately £8.0 million.

Highlights:

· Grosvenor to acquire 51% of the equity of Luge from Ironveld for ZAR 50 million cash (approximately £2.4 million), leaving Ironveld's residual interest at 23%;

· This will increase Grosvenor's planned total investment in Ironveld group to approximately £8.0 million, following completion of all transactions;

· No conditions to completion, total funds from Grosvenor for both transactions still expected to be remitted shortly; and

· Upon receipt of funds Ironveld will be fully funded to commence mining operations and ore processing before the end of 2022.

Martin Eales, Chief Executive of Ironveld, commented: "At the time of the announcement of the Subscription Agreement we indicated that Grosvenor was looking to ensure that Ironveld would be financed to start project development in the near term and today's additional transaction achieves that goal.

" With Luge being an early-stage property and not included in any published calculations of Ironveld's Mineral Resources, we will generate substantial value for shareholders from this deal and will utilise all of the investment from Grosvenor to commence project development."

Luge Transaction

Ironveld's 100% owned subsidiary company, Ironveld Mining Pty Limited ("Ironveld Mining"), has agreed subject to contract with Grosvenor to sell it 51% of the issued share capital of Luge for a consideration of ZAR 50 million (approximately £2.4 millio n).

Luge has held Prospecting Rights for two farms, Luge 697 LR and Non Plus Ultra 683 LR (the "Farms") since 2016 and announced in June 2021 that a Mining Right application for the property had been accepted by the Department for Mineral Resources and Energy and would be granted pending standard environmental, water use licence and community works.

Ironveld's residual interest, held via Ironveld Mining, in Luge will be 23%, with BBBEE and community interests holding the remaining 26%.

There was no value ascribed to Luge according to the Company's last published balance sheet and Luge generated no revenue or profit in the last financial year.

Closing of Transactions

Grosvenor is finalising its own funding package for both transactions and Ironveld expects that Closing will take place shortly.

Project Development

With approximately £8.0 million being invested by Grosvenor in Ironveld, the Company will be fully funded to commence development of its mining and processing project. Subject to completion, Ironveld intends to commence mining in 2022 and will look to secure access to the most efficient and cost-effective smelting facilities for processing of its magnetite ore. This may involve construction of new facilities on site, acquiring existing facilities or paying for access to third party facilities.

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

For further information, please contact:

Ironveld plc Martin Eales, Chief Executive Officer	c/o Blytheweigh 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
Blytheweigh Megan Ray Tim Blythe	020 7138 3204

 

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