Must be close to conclusion19 Oct 2020 12:38
Thu, 3rd Sep 2020 07:00
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 £750,000) 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
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