Member Info for LTbeliever

According to Sable's own JSE release in March, it seems they own (or will own) 50% of just the DMS Plant, and not of the Lapon Mine?

https://senspdf.jse.co.za/documents/SENS_20250306_S501754.pdf

"SEAM is pleased to announce that it signed an updated term sheet with Ironveld Holdings (Pty) Ltd (“Ironveld”) regarding the Lapon Plant on 5 March 2025...The plant will process, produce, market and sell DMS-grade magnetite. The joint venture will be structured as a 50/50 partnership between Altona Processing (Pty) Ltd (A 100% owned subsidiary of Ironveld) and SEAM via its wholly owned subsidiary Lapon Plant (Pty) Ltd."

Thanks SDad, not sure if they have 26% of the Lapon mine & the DMD Plant, isn't it 50% of BOTH?

as per March 6th RNS, "Following completion of the Plant, the joint venture will be structured as a 50/50 partnership between Altona Processing (Pty) Ltd, a wholly owned subsidiary of Ironveld Holdings, and SEAM's wholly owned subsidiary, Lapon Plant (Pty) Ltd. As part of the renegotiated agreement, SEAM has also committed to a prepayment of R5,000,000 for DMS grade magnetite material."

And from the Interims in April:"Work on completing the DMS Magnetite plant progressed steadily, and the Company successfully renegotiated the joint venture agreement with Sable Platinum Holdings, a wholly owned subsidiary of Sable Exploration and Mining (Pty) Ltd. As a result, the Company increased its equity stake in the project from 25% to 50%.

This was the May update: "A Heads of Agreement for a Joint Venture with Sable Platinum Pty Ltd., a subsidiary of Sable Exploration and Mining Ltd. (SEAM) has been concluded; final legal documentation is in progress and expected to be finalised in the next few weeks. Further details were notified by the Company on 6 March 2025."

And last week's RNS:"with the Mining Operations Agreement announced today and the DMS Joint Venture discussions with Sable Platinum Holdings, these developments mark the next phase in delivering a leaner, performance-driven, and cash-generative business."

So, to me it looks that IRON has agreed (but not concluded) increasing its stake to 50% but not sure if it's just just the DMS Plant or the Lapon mine too?

Sdad, can you please check the below numbers for me?

Anticipated - min - production of ore at Lapon, by November - 20.000 t per month; I say minimum because the new operator may be able to increase the monthly output;

We know that the DMS plant is now ready to produce 15.000 t per month (DMS grade magnetite - do you know the average price per ton?), which will be easily procured from Lapon.

There is already a party (Sable?) as per Febr. update, ready to take 1000t pm, looking to sell another 5-7500 t pm to Mozambique. But what if the new plant operator ( last week's RNS "a Plant Operator Agreement will be reached in the very near term") can sell the out put to their own offtakers?

If IRON can get this Plant Op. Agrmnt soon, it will also minimise its running expenses to much less than 100k pm (as per last Interims, it had 400k opex and 200k other admin over H2 2024), leaving it to spend its cashflow from potential DMS magnetite sales of up to 15.000 t pm on the smelter.

Unknown for me is the JV with Sable. DYOR

Just to add that the DMS plant'd be receiving ore, from Lapon, in 3-4 weeks (latest) as per the last RNS: "Production and first ore deliveries to the DMS plant under Daemaneng are targeted within the next 30 days. In parallel, initial ROM sales to offtakers are anticipated to begin, further enhancing near-term cash flow generation."

Therefore the JV needs to be sorted out, right? Then, they say:

"Discussions and negotiations are ongoing and progressing positively, with both parties confident that a mutually acceptable agreement for a Plant Operator Agreement will be reached in the very near term, which should enable and facilitate a natural transition towards the finalisation of the broader JV agreement with Sable Platinum Holdings (Pty) Ltd."

What's the "broader" JV agreement supposed to cover? The smelter?

Sdad, what's your take on Sable JV with IRON? Is it a drag or will it add value?

@Sdad, yes, $105 is the int. price; I only mentioned as a ballpark figure (if our offtakers will export, this is their base figure); good to know about the November release of the AFS June 2025, it'll go someway in enlightening everyone about the situation, especially cash burn or B/E; and by then we will know about the Mine operator's first month of activity, plus any agreement to outsource the DMS plant operations.

Yes, of course 0.1 possible with the right news; eg Mine operator producing/selling 20.000 tons (or more) of iron ore montly (@$105/t?) in 3-4 weeks, DMS magnetite processing also starting soon after, smelter operations approaching a definite start etc; plenty of positive catalysts, but plenty of potential issues too eg delays; so we will see what November brings. GLA

No change today from USD105 / ton, so situation is still calm; IMO, unless a trade war between US-China causes a global recession (not unlikely, depending on developments), this situation might be to the benefit of SAfrica and by extension, IRON (if it becomes a producer of the refined metals); titanium, vanadium and iron are important for today's economies and SAfrica sits - both politically and geographically - between the US and China; both will want to have ample stocks and steady supplies of these metals in the uncertain period ahead.

Sdad, according to this April's AFS 30 June 2024, I wouldn't worry about the smelter - "the agreement for the acquisition of Ferrochrome Furnaces (Pty) Limited ("FCF") remains in place under unchanged terms. The Board continues to regard the transaction as a highly attractive opportunity, taking into account, among other factors, the favourable terms agreed, the significant tax losses available within FCF, and the strong potential to successfully produce high-margin, high-purity iron powders. "

BTW, the max. output capacity is about 27.000 tons per month, so that's more positive than your estimate of 20.000 tons.

I worry more (and don't understand) what's up with Sable; it's suspended, has no money although according to this from JSE, as at 11 August 2025 "Company expects the plant to ramp up production progressively and anticipates achieving full operational capacity within the next two months".

https://senspdf.jse.co.za/documents/SENS_20250811_S508750.pdf

Re the Smelter purchase, IMO, IRON owns it outright; as per the below RNS, they paid 750k upfront for the Share Capital of the previous owners but still owe 5mln to the debt holders; however this amount will be paid - over 10 years - from the smelter profits (so, capped at 500k p.a., assuming the smelter will make profits above this level).

https://www.lse.co.uk/rns/IRON/terms-agreed-for-smelter-acquisition-c667noedmblf9u1.html

"Ironveld has agreed with the Business Rescue Practitioners, Tayfin Forensic and Investigative Auditors ("Tayfin"), to acquire the share capital of FCF for a nominal fee and to purchase outstanding debt from the sole creditor on the following terms:

o ZAR 15 million (approximately £0.75 million) payable upon completion; and

o ZAR 100 million (approximately £5.0 million) over 10 years calculated as a percentage of profits from the smelter, capped at 13.5 per cent per annum"

Sdad tnx, yes good to cross fertilise views about numbers; a couple of comments on your numbers:

1)"perceived cost is £21m over 5 years, or say £4.2m per year. If they mine say 20,000 tons per month, this would be 240,000 per year. At say $60 per ton (got from Chat GPT!) or £40 this equates to around £9.6m income";

There is an initial sunk cost of 8mln for Daemeneng, therefore this leaves 13mln in opex over 3 years**; however, the monthly opex is their "projected average monthly mining cost of approximately ZAR 8.3 million and is recoverable solely through realised sales of mined material." i.e. GBP340k x36m gives us 13mln of opex (**Agreement provides for an initial three-year operational term).

2) using your sales assumption of 240.000 tons p.a. @ GBP45 pt (USD/GBP is 1.33) gives GBP 10.8 mln of annual income; minus opex of 4.3mln leaves a Net income of GBP 6.5 mln p.a. (Vs your figure of 5mln pa).

It's not clear, however, whether the 8mln sunk costs will or will not be collected from an additional monthly charge OR, from Daemeneng's share of the net profit; if they do add their 2.65mln of annual initial expenses' share, then this'd leave a NProfit of 10.8 mln - 7ml appx i.e. just 3.8mln to be "shared" between the 2 parties;

However my own assumption would be that - based on "Daemaneng's upside is driven entirely by operating efficiently, mining cost-effectively, and marketing material at the most competitive prices" they will be paid less than 50% of the net profit, using a specific - unknown - formula that takes into account reasonable opex and a mkt price for the ore; this is because IRON will need to ensure that Daemaneng have an incentive to both a) keep their opex down and b) obtain the highest sales price possible, so as to get their reward; otherwise, they could inflate their costs or sell the ore at below mkt price.

One final comment; an asset not used / producing nothing but eating cash (eg the smelter, a mine with zero production etc) is worth a LOT LESS than an asset producing cash (or, B/Even as a minimum). The Mkt cap is less than 10mln whereas the smelter is valued (if not mistaken) at +30mln? Imagine its value once it becomes fully operational; and the mine too, once its at full productive capacity (now valued at nothing); IRON has no option than to "outsource" operations, especially those needing a lot of upfront cash, rather than keep assets mothballed (which still eats up cash). IMO, IRON is on the right track.

And has anyone noticed that the GMargin on SaaS revenues is +80%?

Probably we'll get more numbers/info when the AFS 2025 are released in a couple of months (under Post-year events).

Hi all, I'm new here (recently bought in). IMO it's a good deal for both parties (but as you all say, devil is in the details).

What do Daemeneng get? They invest appx GBP8mln now, to start operating a ready-to-produce mine, thus avoiding money/time/risk to prospect for a mine; then, over 36 months (3 years), they will have 12mln in oper. expenses (or less, if they are efficient), which they need to cover - month to month - from a) volume of production b) sale price of production; therefore, they have an incentive to mine as much as possible, and to sell it as high as possible; their risk is obviously production difficulties or cost overruns, and sale prices dropping a lot. BUT, they can pull out at the end of 3 years (not sure if they do so earlier); in effect, their sunk cost is the 8mln of initial investment that has to be recouped over the agreement period. 8mln against a license to print money if they play their cards right.

What do IRON get? They get an eager, experienced 3rd party operator for the mine, incentivised to produce as much as possible, as cost-effectively as possible; they avoid paying 8mln (which they don't have) to start producing (IMO, it'd cost them a lot more, both in cash and time wasted), plus they don't need to have extra cash t cover the monthly operating expenses until cash flow becomes positive; in addition, they can focus their little cash and mgt resources to their other projects, including the processing mill, which is guaranteed to have a ready supply from the mine. And, if the mine operator pulls out for any reason, they can have the mine back; in the good scenario, if things go well in 5 years, then the mine will be worth more as it'll have been managed efficiently and profitably and by then, hopefully, IRON's cashpile will be bigger, giving them plenty of options.

This is just IMO of course, DYOR. GLA!

Seems like First Eq took some profits, selling about 0.5% of the share capital.

Seems it made more people eager to commit more money; SP jumped after the event.

IMO 1408, on a mkt cap of 9mln even if a placing was needed, it'd be for maybe 1mln (given the cash expected to pour in from Q1 26), which'd lead to a 10% dilution (and won't necessarily lead to a drop in the SP).

1408, if not mistaken there is a licensing fee PLUS the ongoing need to use Xorbs (XSG's product) for the "Laundry Care" washes; so the more one uses their Wmachine, the more money XSG will make.

It's crazy actually that in August, SP jumped to 3p and now, with both CLN's already renewed (and one being paid off in instalments), plus another agreement (cash upfront) of 2.5 mln (over 2025-2026), the SP is languishing at 2p. We had 2.3mln Sales in H1 (B/E), can anyone say that H2 Sales will be less that 2.7mln and a small profit of 300-400k (based on H1 numbers)?