(Alliance News) - Ironveld PLC on Friday announced it has entered a joint venture agreement with Pace SA Pty Ltd to produce and sell dense media separation grade magnetite from its mine in Limpopo, South Africa.
Ironveld, through its subsidiary Ironveld Mining Pty Ltd, enters the joint venture as equal partners with Pace. The joint venture will be called IPace Pty Ltd.
All profits from the joint venture will be split on a 50:50 basis, save for an initial period where Pace will recoup its capital funding on a 60:40 profit share basis.
Pace has agreed to fund all capital equipment and establishment costs to produce the DMS grade magnetite at Ironveld's Lapon mining area. The current costs are estimated at around ZAR35 million, or GBP1.7 million.
Ironveld Mining will sell magnetite ore to the joint venture 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.
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.
First production and sales from the joint venture are expected mid-2023.
"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," said Chief Executive Martin Eales.
Shares in the South Africa-focused iron, vanadium and titanium project developer were up 7.9% at 0.33 pence on Friday morning in London.
By Heather Rydings, Alliance News senior economics reporter
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Ironveld (IRON)