TIDMIRON
RNS Number : 8702X
Ironveld PLC
03 September 2020
Ironveld Plc
("Ironveld" or the "Company")
Update on Financing and Further Extension of IIG Option
Agreement
Ironveld is pleased to announce that substantial progress has
been made, together with its prospective strategic partner,
Inclusive Investment Group Proprietary Limited ("IIG"), in securing
project development funding which, if completed, would provide
Ironveld with sufficient funds to start mining and production at
the Company's magnetite project in South Africa.
Highlights
-- IIG and Ironveld have made substantial progress in refining
the funding costs required to commence mining and production,
reducing the project funding total from ZAR240 million to ZAR160
million;
-- Discussions are advanced with financial and development
funding institutions in South Africa for the full balance of the
project funding required, based on BEE-qualifying IIG becoming the
major shareholder in Ironveld;
-- IIG and Ironveld have agreed a further extension to the
exercise date in terms of the Option Agreement between IIG and
Ironveld, from 30 September 2020 to 30 November 2020;
-- On grant of the Option (which is conditional), IIG can
subscribe for 440,176,070 new ordinary shares in the capital of the
Company at a price of 0.42 pence per Subscription Share;
-- IIG will extend a loan of US$1,000,000 (approximately
GBP750,000) to Ironveld on completion of the Subscription. Should
IIG choose to convert the loan and all accrued interest at the end
of the loan term (and also assuming no further shares are issued by
the Company other than those included in this announcement and
constant exchange rates), it will be issued with a further
233,373,349 shares, taking its holding to 46.8 per cent. of the
Company's issued share capital;
-- IIG has agreed to extend an additional Bridge Loan Facility
of up to ZAR3.30 million (approximately US$200,000),
unconditionally, in order to fund Ironveld through to the
anticipated project financing and exercise of the Option;
-- Ironveld has agreed, conditional on shareholder approval,
that any Bridge Loan funds drawndown plus accrued interest,
together with IIG's initial US$250,000 Option Fee, will convert
into Ironveld shares at the Subscription Price of 0.42 pence should
the Option expire; and
-- All other aspects of the Fundraising, comprising potential
gross proceeds of US$3.2 million, remain unchanged.
Martin Eales, Chief Executive Officer of Ironveld, said:
"We are pleased that IIG has demonstrated its continued
commitment to the transaction by agreeing to the additional Bridge
Loan Facility announced today. In the last three months we,
together with IIG, have made substantial progress towards the start
up of operations and eventual production of high purity iron
powders. We have been focused on refining Ironveld's project
funding costs and driving efficiencies by outsourcing aspects of
the production process, including the selection of experienced
mining contractors, identification of outsourced smelting capacity
and the appointment of Europe-based metallurgical specialists for
final stage processing of powders.
"We look forward to securing the funds necessary to commence
production and bring this process to a successful conclusion in the
near future."
The grant of the Option and the Fundraising in general are
wholly conditional on shareholder approval being granted at a
general meeting of the Company (the "General Meeting") and to the
Takeover Panel granting a Rule 9 Waiver*. The Company will publish
a circular together with a notice to convene the General Meeting in
due course. Should these conditions not be met, then the
Fundraising (comprising the Subscription and Loan Facility) will
not proceed, and the option fee of US$250,000 (approximately GBP
210,000) paid by IIG to the Company will be repayable in full .
Under the terms of the revised Option Agreement, exercise of the
Option must occur prior to 30 November 2020.
Capitalised terms in this announcement shall have the same
meaning as in the Company's announcement of 30 March 2020 unless
the context requires otherwise.
Background
Since June 2020 Ironveld and IIG have continued to work closely
together in order to secure project development funding, which
would facilitate the start of mining and production for Ironveld's
magnetite project in South Africa.
In particular the parties have worked to refine all aspects of
the production process by using outsourcing where appropriate, from
mining to smelting to final production of high purity iron powders
such that the project funding required has fallen substantially,
from ZAR240 million (approximately US$14.4 million) to ZAR160
million (approximately US$9.6 million). Subject to project funding
the parties have selected experienced mining contractors,
incorporated outsourced smelting solutions and appointed
Europe-based metallurgical facilities for final processing of
powders.
Discussions are now at an advanced stage with financial and
development funding institutions (based on the assumption that
BEE-qualifying IIG becomes Ironveld's major shareholder) to secure
the project funding required.
The transaction and project financing applications have also
been impacted by the effect of lockdown restrictions in South
Africa due to COVID-19, which has caused interruption at all levels
of commerce.
Due to both of these factors, Ironveld has agreed to IIG's
request to further extend the period during which the Option can be
exercised from prior to 30 September 2020 to prior to 30 November
2020. In exchange, IIG has agreed to provide bridge funding to
Ironveld so that it is capable of meeting its obligations prior to
the anticipated exercise of the Option.
Option Agreement
On 30 March 2020, the Company announced that it had entered into
arrangements with IIG to raise potential gross proceeds of
approximately US$3.2 million. In particular, the Company and IIG
entered into an Option Agreement pursuant to which on the grant of
the Option (which is conditional) IIG can subscribe for 440,176,070
new ordinary shares in the capital of the Company at a price of
0.42 pence per share ("Option"). The Option was initially set to
expire on 17 June 2020 and was extended to 30 September 2020 on 10
June 2020.
IIG also agreed to extend a loan of US$1,000,000 (approximately
GBP750,000) to Ironveld on completion of the Subscription. Should
IIG choose to convert the loan and all accrued interest at the end
of the loan term (and also assuming no further shares are issued by
the Company other than those included in this announcement and
constant exchange rates), it will be issued with a further
233,373,349 shares, taking its holding to 46.8 per cent. of the
Company's issued share capital.
In recognition of the time required to complete the proposed
project financing the Company has agreed to a further extension to
the exercise period of the Option to 30 November 2020.
In consideration, IIG has agreed to provide the Company with a
further bridge funding facility of up to ZAR3.30 million
(approximately US$200,000) ("Bridge Loan Facility") which is
intended to provide the Company with the requisite funds to
continue its operations until such time as the funding package is
complete.
Bridge Loan Facility
IIG has agreed to advance to Ironveld a further two tranches of
ZAR1.65 million (approximately US$100,000 each) in September 2020
and October 2020 on an unconditional and unsecured basis. The loan
amounts will bear interest of 10 per cent. per annum (in line with
the cost of borrowing in South Africa). Any loan amounts plus
interest will be convertible into New Ordinary Shares in Ironveld
at a price of 0.42 pence per New Ordinary Share on completion of
the exercise of the Option or failing such exercise, on the date
being five business days after 30 November 2020 or such later date
as agreed between the parties. If the Resolutions are not passed on
or before 30 November 2020, any loan amounts plus interest will
instead be convertible into Existing Ordinary Shares in Ironveld at
a price of 1 pence per Existing Ordinary Share. If the Bridge Loan
Facility is converted into New Ordinary Shares , the amount of the
Option and therefore the number of Subscription Shares to be issued
pursuant to its exercise will be reduced commensurate with the
amount of the Bridge Loan Facility that is converted. The Company
will give standard representations and warranties to IIG pursuant
to the Bridging Loan Facility.
The parties have further agreed, subject to shareholder
approval, that if IIG's Option expires on 30 November 2020 then any
loan amounts plus interest plus IIG's original US$250,000 Option
Fee will be converted into new Ironveld Shares at the Subscription
Price of 0.42 pence.
General Meeting and Shareholder Approval
As announced on 30 March 2020, Shareholder approval will be
required for the Option to come into effect and to allow any New
Ordinary Shares to be issued pursuant to the Fundraising. Ironveld
now expects to publish the Circular required for the General
Meeting in October 2020, assuming satisfactory completion of the
project funding process.
Resolutions required at the General Meeting will include:
a) a Rule 9 Waiver Resolution, in accordance with the provisions of the Takeover Code;
b) by way of ordinary resolution to give the Directors authority
to subdivide each existing ordinary share of 1 pence each into one
ordinary share of 0.1 pence each and nine deferred shares of 0.1
pence each, with the deferred shares having the same rights and
restrictions as the Company's existing deferred shares of 1 pence
each;
c) by way of ordinary resolution to give the Directors authority
to allot the New Ordinary Shares;
d) by way of special resolution to dis-apply statutory pre-emption rights in respect thereof; and
e) by way of special resolution to amend Ironveld's current
articles of association to include reference to the New Ordinary
Shares, in particular detailing the rights attaching to the New
Ordinary Shares.
The Directors (representing 4.41 per cent. of the issued
ordinary share capital) and Tracarta Limited (representing 12.27
per cent. of the issued share capital) have all indicated that they
will support the resolutions to be put forward at the General
Meeting.
For further information, please contact:
Ironveld plc c/o Blytheweigh
Giles Clarke, Chairman +44 20 7138 3204
Martin Eales, Chief Executive Officer
finnCap (Nomad and Broker)
Christopher Raggett / Charlie Beeson +44 20 7220 0500
Blytheweigh
Tim Blythe / Megan Ray +44 20 7138 3204
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
*Rule 9 Waiver means the waiver, conditional on its approval by
the Independent Shareholders** taken by a poll, by the Takeover
Panel Executive (the "Panel") of the obligation that, following the
issue of the shares pursuant to the exercise of the Option
Agreement, would otherwise arise on IIG to make a general offer to
all shareholders of the Company pursuant to Rule 9 of the Takeover
Code as a result of the allotment and issue of shares pursuant to
exercise of the Option Agreement by IIG.
**Independent Shareholders means the shareholders of the
Company, excluding (i) IIG and any person acting in concert with
them who holds Ordinary Shares and (ii) the directors of the
Company, with the exception of the Independent Director.
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.
The Definitive Feasibility Study published in April 2014
confirms the project's viability to deliver a Vanadium slag product
for which the company has an offtake agreement as well a High
Purity Iron product which commands a premium in the market place
and Titanium slag containing commercial grades of titanium.
Ironveld is an AIM traded company. For further information on
Ironveld please refer to www.ironveld.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
AGRFLFFRAFIFIII
(END) Dow Jones Newswires
September 03, 2020 02:00 ET (06:00 GMT)
Ironveld (LSE:IRON)
Historical Stock Chart
From Apr 2024 to May 2024
Ironveld (LSE:IRON)
Historical Stock Chart
From May 2023 to May 2024