(Alliance News) - Ironveld PLC on Monday reported a widened interim loss but has ended its strategic review following a partnership agreement with Inclusive Investment Group.
In the six months to December 31, Ironveld recorded a pretax loss of GBP276,000, widened from GBP254,000 in the same period the year before.
Administrative expenses rose to GBP278,000 from GBP270,000 year on year.
Ironveld did not generate any revenue in either period.
During the period, Ironveld underwent a strategic review and held discussions with a number of potential funding partners.
"Administrative expenses reflect the continued low level of activity during the period whilst the company engaged with possible partners," Ironveld said.
The company added: "Your board remains confident that the company's asset, containing 27 million tons of HPI, together with significant vanadium and titanium content, continues to demonstrate robust economics and has a potential value many times in excess of the company's market capitalisation and balance sheet carrying value."
As part of that review, Ironveld, separately, announced a new strategic partnership with Inclusive Investment Group as part of which the company has entered into arrangements to raise potential total gross proceeds of approximately GBP2.7 million.
The fundraising consists of an option agreement between Ironveld and IIG, where IIG can subscribe for 440.2 million new shares in Ironveld at 0.42 pence each, for about GBP1.9 million.
Shares in Ironveld were 38% higher in London on Monday afternoon at 0.55 pence each.
The second half of the agreement will see IIG supply Ironveld with a roughly GBP840,000 term loan once the subscription is complete.
Following the subscription, IIG will hold a 36% interest in Ironveld, making it the company's largest shareholder.
Should IIG decide to convert its loan into shares, its stake will rise to 46.8%.
As part of the agreement, IIG will nominate two non-executive directors to Ironveld's board.
IIG is an investment vehicle associated with Mcebisi Jonas and Monwabisi Twantwa in South Africa.
Ironveld will use the fundraising proceeds for essential running costs and overheads, until cashflows can be successfully derived from Phase 1 of the company's development project.
Ironveld Chief Executive Martin Eales said: "This fundraising and strategic partnership mark a significant milestone for the company which we believe will allow us to commence unlocking value from our project.
"We are delighted to be working alongside IIG as our strategic partner and have no doubt that together we can capitalise on Ironveld's huge potential. We look forward to keeping the market updated on our progress."
By Paul McGowan; paulmcgowan@alliancenews.com
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Ironveld (IRON)