TIDMIRON
RNS Number : 5362N
Ironveld PLC
26 October 2016
26 October 2016
Ironveld plc ("Ironveld" or the "Company")
Placing to raise c.GBP1.8 million and
Notice of General Meeting
Ironveld plc, the owner of a High Purity Iron ("HPI"), Vanadium
and Titanium project located on the Northern Limb of the Bushveld
Complex in Limpopo Province, South Africa (the "Project"), is
pleased to announce that it has raised c.GBP1.8 million before
expenses through a firm and conditional placing of 40,000,003 new
ordinary shares of 1p each (the "Placing Shares") at a price of
4.5p each (the "Placing").
Highlights:
-- Placing to raise gross proceeds of c.GBP1.8 million through
the issue of 40,000,003 Placing Shares at a price of 4.5p each;
-- Placing comprises Firm Placing of c.GBP1.3 million and Conditional Placing of c.GBP500,000;
-- Proceeds of the placing will be used for working capital
including advancing the development phase of the 15MW DC
smelter
-- Project funding and development progressing strongly:
o Industrial Development Corporation ("IDC") has approved
facilities representing c.R244.08 million.
o Company in the advanced stages of completing the remaining
debt agreements for the Project.
o Land lease agreements are being processed by the Department of
Public Works and are expected to be received shortly.
o Offtake agreements in place for HPI, Vanadium and Titanium for
the first 5 years of production.
-- Giles Clarke and Nick Harrison to participate in the Placing
to acquire an additional 777,778 Ordinary Shares and 555,556
Ordinary Shares respectively. In addition, Westleigh Investments
Holdings Limited, a company wholly owned and controlled by Giles
Clarke and Nick Harrison is to participate in the Placing,
subscribing for 888,889 Ordinary Shares;
-- General Meeting on 14 November 2016 to approve Conditional Placing.
Application for admission
Application will be made to the London Stock Exchange for the
Firm Placing Shares to be admitted to trading on AIM. It is
expected that First Admission will become effective and that
dealings in the Firm Placing Shares will commence on 1 November
2016.
Application will be made to the London Stock Exchange for the
Conditional Placing Shares to be admitted to trading on AIM. It is
expected that Second Admission will become effective and that
dealings in the Conditional Placing Shares will commence on 15
November 2016, subject to the passing of the Resolutions at the
GM.
Total voting rights
Following the First Admission but before the Second Admission,
the Company's issued share capital will consist of 357,132,136
Ordinary Shares, with each Ordinary Share carrying the right to one
vote. The Company does not hold any Ordinary Shares in treasury.
This figure of 357,132,136 Ordinary Shares may therefore be used by
shareholders in the Company, between the dates of First Admission
and Second Admission, as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure Guidance and Transparency
Rules ("DTRs").
Following the Second Admission, the Company's issued share
capital will consist of 370,554,358 Ordinary Shares, with each
Ordinary Share carrying the right to one vote. The Company does not
hold any Ordinary Shares in treasury. This figure of 370,554,358
Ordinary Shares may therefore be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under
the DTRs.
Following the Second Admission, and subject to shareholder
approval, the Company's issued share capital will consist of
370,554,358 Ordinary Shares, with each Ordinary Share carrying the
right to one vote
Unless the context otherwise requires, defined terms shall have
the meaning ascribed to them in the circular being posted to
Shareholders today ("Circular"). The Shareholder Circular is
available on the Company's website www.ironveld.com/
Peter Cox CEO of Ironveld plc commented:
"Ironveld has had a busy period of activity including the
execution of the vitally important transaction with the IDC which
is a major stamp of approval from the South African government of
our project. I am delighted with the continued support from our
shareholders and the proceeds from this fundraise will enable us to
commence the development phase of the Project whilst we seek to
conclude the remaining debt agreements."
Giles Clarke Chairman of Ironveld plc commented:
"With a number of imminent catalysts we continue to strengthen
our position and advance the Project towards production. I would
like to thank all our existing and new shareholders for their
continued support."
Ends
For further information, please contact:
Ironveld plc c/o Camarco
Peter Cox, Chief Executive 020 3757 4980
Shore Capital and Corporate Limited
Stephane Auton / Toby Gibbs (corporate
finance)
Jerry Keen (corporate broking) 020 7408 4090
Camarco
Gordon Poole / Billy Clegg 020 3757 4980
1. Introduction
The Company is proposing to raise GBP1.8 million (before
expenses) through a conditional placing of 40,000,003 Placing
Shares at the Placing Price. In addition, one Placing Warrant will
be issued to each Placee in respect of each Placing Share. Further
details of the terms of the Placing are set out below under the
heading "Details of Placing" and "Use of proceeds".
28,844,448 of the Placing Shares are being placed pursuant to
existing authorities granted to the Directors at the Company's
annual general meeting held on 18 December 2015 whilst the
remaining 11,155,555 Placing Shares are being placed conditional,
inter alia, on the passing of the Resolutions being proposed at the
GM. The Firm Placing is conditional, inter alia, on First Admission
(which is expected to become effective with dealings in the Firm
Placing Shares to commence on 1 November 2016); and the Conditional
Placing is conditional, inter alia, on Second Admission (which is
expected to become effective with dealings in the Conditional
Placing Shares to commence on 15 November 2016). The Placing has
not been underwritten.
2. Details of Placing
The Placing will raise, in aggregate, GBP1.8 million (before
commissions and expenses) through the conditional placing of the
Placing Shares at a price of 4.5 pence per share with institutional
and other investors. Having considered the price at which the
Ordinary Shares are currently traded, feedback from investor
marketing and other factors, the Directors have resolved that the
Placing Price is appropriate.
The Firm Placing Shares are being placed pursuant to existing
authorities granted to the Directors at the Company's annual
general meeting held on 18 December 2015 while the Conditional
Placing Shares are being placed conditional, inter alia, on the
passing of the Resolutions at the GM.
The Placing Shares, when issued, will represent approximately
10.79 per cent. of the Company's Enlarged Share Capital immediately
following Second Admission. The Placing Shares will rank in full
for all dividends with a record date on or after the date of
Admission and otherwise equally with the Ordinary Shares in issue
from the date of Admission.
The Firm Placing (which is not being underwritten) is
conditional, amongst other things, upon:
(a) the Placing Agreement becoming unconditional in all respects
(save for First Admission and Second Admission) and not having been
terminated in accordance with its terms prior to First Admission;
and
(b) Admission of the Firm Placing Shares becoming effective on
or before 8.00 am on 1 November 2016 or such later date as the
Company and Shore Capital may agree, being no later than 8.00 am on
4 November 2016.
The Conditional Placing (which is not being underwritten) is
conditional, amongst other things, upon:
(a) the Placing Agreement becoming unconditional in all respects
(save for Second Admission) and not having been terminated in
accordance with its terms prior to Admission;
(b) the Resolutions set out in the Notice of General Meeting
forming part of this Circular being approved by the Shareholders;
and
(c) Admission of the Conditional Placing Shares becoming
effective on or before 8.00 am on 15 November 2016 or such later
date as the Company and Shore Capital may agree, being no later
than 8.00 am on 30 November 2016.
2.1. Placing Warrants
One Placing Warrant will be issued to each Placee in respect of
each Placing Share under both the Firm Placing and the Conditional
Placing. In total 40,000,003 Placing Warrants will be issued,
28,844,448 pursuant to the Firm Placing and 11,155,555 pursuant to
the Conditional Placing. The Placing Warrants are exercisable at
6.75 pence at any time during the 12 months from the First
Admission or Second Admission, as applicable.
2.2. The Placing Agreement
Pursuant to the terms of the Placing Agreement, Shore Capital
has conditionally agreed to use its reasonable endeavours, as agent
for the Company, to procure subscribers for the Placing Shares at
the Placing Price with certain institutional and other
investors.
The Placing Agreement contains warranties from the Company in
favour of Shore Capital in relation to, inter alia, the accuracy of
the information in the Circular and other matters relating to the
Group and its business. In addition, the Company has agreed to
indemnify Shore Capital in relation to certain liabilities it may
incur in respect of the Placing. Shore Capital has the right to
terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, in the event of a material breach of the
warranties given in the Placing Agreement, the failure of the
Company to comply in any material respect with its obligations
under the Placing Agreement, the occurrence of a force majeure
event which in Shore Capital's opinion may be material and adverse
to the Company or the Placing, or a material adverse change
affecting the financial position or business or prospects of the
Company.
As part of the Placing, Shore Capital has agreed that certain
fees due to Shore Capital will be satisfied through the issue of
2,266,667 Placing Shares at the Placing Price on Second
Admission.
2.3. Settlement and dealings
Application will be made to the London Stock Exchange for the
Firm Placing Shares to be admitted to trading on AIM. It is
expected that First Admission will become effective and that
dealings in the Firm Placing Shares will commence on 1 November
2016.
Application will be made to the London Stock Exchange for the
Conditional Placing Shares to be admitted to trading on AIM. It is
expected that Second Admission will become effective and that
dealings in the Conditional Placing Shares will commence on 15
November 2016, subject to the passing of the Resolutions at the
GM.
The Placing Shares being issued pursuant to the Placing will, on
Admission, rank in full for all dividends and other distributions
declared, made or paid on the Ordinary Shares after Admission and
will otherwise rank pari passu in all respects with the issued
Ordinary Shares.
3. Use of proceeds
The Company intends to use the net proceeds of the Firm Placing
and Conditional Placing for the Company's funding requirements up
until 30 June 2017, by which time the Directors expect to have
completed the full funding of the Project.
4. Status of the Ironveld Project
Overview
The Group is the owner of a High Purity Iron, Vanadium and
Titanum project located in the Northern Limb of the Bushveld
Complex in Limpopo Province, South Africa.
The Definitive Feasibility Study published in April 2014
confirmed the Project's viability to deliver an exceptionally high
grade iron product (called "High Purity Iron"). The Project
involves the Group mining its own VTM ore as feedstock for a 15 MW
DC smelter which will produce High Purity Iron powder as well as
vanadium and titanium products.
The Directors believe that all three products are in demand and
the Group has entered into offtake agreements for all the products
for the first five years of production. Iron powders are widely
used in powder metallurgy (which the Directors believe is a growing
market, driven by the continuous introduction of new materials and
technologies), in magnetic materials and in the manufacturing of
welding rods.
Whilst vanadium has historically been used as ferrovanadium or
as a steel additive adding a considerable increase of strength to
steel, it is the development of vanadium redox flow battery systems
for grid energy storage applications that the Directors believe has
the most potential to significantly impact on the demand for
vanadium.
Titanium slag is used in the manufacture of paint, paper and
plastics but scientists have recently developed a new battery with
a new gel material made from titanium dioxide which can be charged
up to 70 % in only two minutes and has a longer projected lifespan
over 20 years which again the Directors believe will, if
commercialised, increase demand for titanium.
Key mining rights and prospecting rights together with the
relevant approvals have been granted in respect of the Project to
enable the mining to commence. The Project is supported by
excellent infrastructure of roads, rail and has access to power and
water. The Group has a formal letter from Eskom confirming power
supply availability for the smelter and has opted for the
'self-build' option, allowing the Group to ensure build quality of
the network and to standards that will ensure the Group's
operations are stable. The land lease for the smelter is being
processed by the Department of Public Works and the Group is in the
process of appointing Tenova Pyromet, part of the Techint Group, to
design and supply the smelter.
Project Funding
The Company announced on 6 October 2016 that IDC has approved a
R244m funding package for the Project and was in the process of
executing formal funding agreements. Under the term of the funding
package IDC will provide senior loan facilities to Ironveld Mining
and Ironveld Smelting, subsidiaries of the Company. The total value
of the facilities represents R244.08 million and will form part of
an approximately. R871 million financing package for the
development of the Project.
Established in 1940, IDC is a national development finance
institution set up to promote economic growth and industrial
development. It is owned by the South African government under the
supervision of the Economic Development Department. IDC's main
objective is to be the primary source of commercially sustainable
development and innovation to benefit both South Africa and the
rest of Africa.
The Company is in the advanced stages of negotiating the
remaining debt agreements for the Project.
Sylvania Loan Facility
At the time of the acquisition of the assets of the Ironveld
Project from the Sylvania Group in July 2012, the Company entered
into a loan facility of R15 million with Sylvania Metals Pty
Limited ("Sylvania"). Under the terms of the Loan Facility the
Company undertook to grant Sylvania warrants as a guarantee. The
Loan Facility, which now bears interest at 4% above the South
African prime rate, was repayable no later than 30 June 2016,
subsequently extended to 31 December 2016. The Directors' intention
is to pay off the Loan Facility as part of the funding package for
the Ironveld Project. As a consequence, the Directors have entered
into an agreement with Sylvania which extends the repayment date
for the R15 million principal amount to 30 June 2017.
5. Irrevocable undertakings
The Company has received irrevocable undertakings to vote in
favour of the Resolutions from Directors who hold, or are
interested in, an aggregate of 22,158,380 Ordinary Shares,
representing 6.75 per cent. of the Company's current issued share
capital.
6. Director Participation
Giles Clarke and Nick Harrison, both directors of the Company,
are to participate in the Firm Placing, subscribing for 777,778
Ordinary Shares and 555,556 Ordinary Shares respectively. In
addition, Westleigh Investments Holdings Limited ("WIHL"), a
company wholly owned and controlled by Giles Clarke and Nick
Harrison is to participate in the Placing, subscribing for 888,889
Ordinary Shares. Following the completion of the Placing and Second
Admission, and subject to shareholder approval, Giles Clarke will
hold an interest in 9,148,580 Ordinary Shares (representing 2.47%
of the Enlarged Share Capital), Nick Harrison will hold an interest
in 4,147,840 Ordinary Shares (representing 1.12% of the Enlarged
Share Capital) and WIHL will hold an interest in 10,062,470
Ordinary Shares (representing 2.72% of the Enlarged Share
Capital).
7. General Meeting
Set out at the end of the Circular is a notice convening the
General Meeting to be held at the Company's registered office at
Lakeside, Fountain Lane, St Mellons, Cardiff, CF3 0FB on 14
November 2016 at 11 a.m., at which the Resolutions will be proposed
as ordinary or special resolutions as set out below:
Ordinary Resolution
1. to provide the Directors with the relevant authority pursuant
to section 551 of the Act to issue and allot equity securities up
to an aggregate nominal value of GBP245,777.77 which will
facilitate, inter alia, the Conditional Placing and provide the
Directors with authority to issue and allot further equity
securities up to an aggregate nominal value of GBP741,110;
Special Resolution
2. to disapply pre-emption rights pursuant to section 570 of the
Act in connection with the issue and allotment of equity securities
up to an aggregate nominal value of GBP245,777.77 which will
facilitate, inter alia, the Conditional Placing and provide the
Directors with authority to issue and allot further equity
securities on a non-pre-emptive basis up to an aggregate nominal
value of GBP741,110.
Resolution 1 will be proposed as an ordinary resolution and
require a majority of more than 50 per cent. of the Shareholders
voting in person or by proxy in favour of the resolution.
Resolution 2 will be proposed as a special resolution and will
require not less than 75 per cent. of the Shareholders voting in
person or by proxy in favour of the resolution.
8. Recommendation
The Directors consider the Placing to be in the best interests
of the Company and its Shareholders as a whole and accordingly
unanimously recommend Shareholders to vote in favour of the
Resolutions to be proposed at the General Meeting as they intend to
do in respect of their beneficial holdings amounting, in aggregate,
to 22,158,380 Ordinary Shares, representing 6.75 per cent. of the
Company's current issued share capital of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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