Europa Metals Regulatory News (EUZ)

29 April 2016

Ferrum Crescent Limited

("Ferrum Crescent", the "Company" or the "Group")(ASX: FCR, AIM: FCR, JSE: FCR)

Quarterly Activities and Cashflow Report

For the period ended 31 March 2016

Highlights

· Completion of review and strategic re-focusing of the group's assets and corporate structure

o Farm-in and joint venture agreement in place to progress the Company's flagship Moonlight project

o Costs further reduced in respect of the South African Moonlight operations

· Option secured to acquire GoldQuest Iberia S.L. ("GoldQuest"), which owns two lead-zinc exploration projects in the provinces of Leόn and Galicia, in historical Spanish mining areas (the "Iberian Projects") (the "Option")

o Due diligence field trips and desktop study completed

o Geological assessment indicates major potential for re-interpretation of historical data and delivery of a new geological model identifying significant continuous zones of mineralisation

o Mineralogical data supports initial assessment of the mineralisation at the Toral Project as being metallurgically straightforward and uncomplicated

o Merlin Marr-Johnson appointed as adviser to the Board, primarily to assist with the Iberian Projects

· Objective to exercise the Option in due course and then pursue a low cost, highly focused work programme to define the economic and geological characteristics of the Iberian Projects including the definition of JORC compliant resource estimates

Corporate

· Justin Tooth appointed to the Board of the Company (the "Board"), initially as Non-Executive Chairman, subsequently assuming the role of Executive Chairman

· Resignations of Thomas Revy (Managing Director) from the Board and Mr Robert Hair (Company Secretary)

· Dr Evan Kirby appointed as Non-Executive Director to the Board bringing with him, significant metallurgical experience

· Mr Grant Button appointed as Company Secretary

· Subscription completed to raise £179,618 before expenses via the issue of 149,681,797 new ordinary shares at a price of 0.12 pence per share, to maintain the GoldQuest Option and to provide additional working capital.

Post Quarter End

· Conditionally raised £650,000 before expenses via the issue of, in aggregate, 500,000,000 new ordinary shares at a price of 0.13 pence, through a placing and subscription, with the net proceeds intended to be used, inter alia, to fund the cash consideration payable upon the planned exercise in due course of the Option over GoldQuest

Justin Tooth, Executive Chairman of Ferrum Crescent, today commented:

"The reporting period saw a time of significant change within the Company, as we defined new pathways for generating shareholder value, via both our farm-in and joint venture agreement in respect of the Moonlight asset and through acquiring the option over GoldQuest and its Iberian Projects. Within the Company, we also made significant cost savings and restructured the Company to focus on the next stage of our growth. I believe we are now making rapid, efficient progress to move Ferrum Crescent forward and start generating news flow and results from the strong assets we have, which are backed by a highly capable team."

Option to Acquire Interests in Lead-Zinc Exploration Projects in Spain

On 16 February 2016, the Company announced that it had entered into an option and sale agreement (the "Option and Sale Agreement") for a staged option fee of up to £22,500, with TH Crestgate GmbH ("Crestgate"), a private Swiss-based company, in respect of the potential acquisition of GoldQuest Iberica, S.L. ("GoldQuest"), its indirect wholly-owned subsidiary. The Option and Sale Agreement affords the Company an exclusive option, valid until 31 July 2016, to acquire 100 per cent. of GoldQuest's issued share capital (the "Option"), for an aggregate consideration of approximately £460,000 (based on the Company's prevailing mid-market share price of approximately 0.14 pence per ordinary share), to be satisfied principally in cash and partly by the issue of new ordinary shares. The Option is exercisable entirely at Ferrum Crescent's discretion.

GoldQuest owns 100 per cent. of licences covering 2,024ha in the Province of León (the "Toral Project") and 100 per cent. of licences in the Province of Galicia (the "Lago Project"), all such licence areas being located in northern Spain and having high prospectivity for both lead and zinc.

The Board believes that the prevailing market prices for both lead and zinc will strengthen further, underpinned by an anticipated fall in market supply. Accordingly, the Board believes that the more advanced Toral Project, in particular, with significant exploration data already available and being located within a politically stable and historical mining region, represents a cost effective opportunity to enter this market sector.

Geological interpretation and review

The Toral Project area has been historically assessed as containing a single, tabular zone of mineralisation, at depths of 300-500m below surface. However, such historical modelling is simplistic and excludes a large amount of normally critical data and, following its recent due diligence enquiries, the Company believes that the existing NI 43-101 resource estimate significantly under-estimates the mineral potential of the Toral Project. The Company further believes that an initial low cost exploration programme should be able to test the mineralisation in a series of parallel, sub-vertical structures running from depth up to surface.

Utilising the existing data and applying an exploration process that takes into account key structural controls and the characteristics of existing nearby mines will be a key initial work programme priority. Ferrum Crescent's objective, following the anticipated exercise of its Option in due course, will be to establish a JORC compliant resource estimate at both the Toral Project and the Lago Project as well as re-examining the scale and continuity of mineralisation at the Toral Project.

Mineralogical assessment and future process design

Ferrum Crescent's ultimate objective would be to establish a credible mineral reserve in a cost effective manner for consideration by potential future acquirers and/or development finance groups.

Following assessment of the geology, together with a desktop study of nearby mining operations, the Company believes that the metallurgy at the Toral Project is straightforward and uncomplicated. Furthermore, it is anticipated that any economic ores defined at Toral will be capable of being processed using simple industry standard techniques. Preliminary assessment also indicates that the environmental aspects of the project pose no unusual challenges, whilst the main social impact will be a desirable increase in employment opportunities for the region.

Future activities will be focused on challenging all assumptions and conducting appropriate project development studies.

Licencing and political risks and routes to key markets

During March 2016, the licences in respect of the Toral Project and the Lago Project were renewed by the Government of León for a period of twelve months further to the fulfilment of a basic work programme at the two sites. The assets are located in a region containing existing mines and are situated away from any significant conurbations or sites of interest. Spain is increasingly supportive towards its mining sector and it is host to a number of recent, new, mining developments. In addition, Spain has a first tier infrastructure system for the transportation of potential future product to a major international port in order to supply concentrate to export markets.

During the quarter, the Company further announced that it had completed its comprehensive due diligence investigations on GoldQuest and the Iberian Projects.

The Board believes that, following the expected exercise of the Option in due course, the Company will be able to implement a cost effective work programme to derive a new interpretation of the Toral and Lago Projects. Both assets have extensive pre-existing data which can be used to underpin meaningful additional exploration and metallurgical campaigns, to ultimately deliver JORC complaint resource estimates and an updated, accurate, assessment of the mineralisation characteristics and their scale.

Corporate

Completion of Private Placements

On 25 February 2016, the Company announced the completion of a private subscription for 149,681,797 new ordinary shares of no par value each in the capital of Ferrum Crescent ("Ordinary Shares") at a price of £0.0012 per share, to raise £179,618 before expenses.

In addition, following the quarter end, on 27 April 2016, the Company announced that it had conditionally raised £650,000 before expenses via the issue of, in aggregate, 500,000,000 new Ordinary Shares at a price of 0.13 pence per share, via a placing and subscription. The Company intends to use the net proceeds from the placing and subscription to fund the cash consideration payable upon the planned exercise in due course of the Option and for general working capital purposes.

Directorate Changes

During the quarter, the Company announced the resignations of both Tom Revy, as a Board director and Managing Director, and Bob Hair, Company Secretary. The Board would like to thank both Tom and Bob for their significant contributions to the Company's development.

Mr Justin Tooth assumed the role of Executive Chairman, based in London. This will significantly reduce management costs and locates the executive management function in the same country as the majority of the Group's principal advisers and shareholder base, with more closely aligned time zones for our project teams in South Africa and Spain. Mr Grant Button assumed the role of Company Secretary.

In addition, Dr Evan Kirby joined the Board as Non-Executive Director. Dr Kirby is a metallurgist with over 30 years' of international experience in the mining sector. He has held senior management positions with Impala Platinum, Rand Mines and Rustenburg Platinum Mines and worked as a director and technical consultant for a number of mining companies. He is currently a director of Bezant Resources plc (AIM: BZT) and Nyota Minerals Limited (ASX: NYO, AIM: NYO).

The Board appointed Mr Merlin Marr-Johnson as a consultant, to advise the Board on all aspects of the Iberian Projects, on which he has previously worked. Mr Marr-Johnson completed a course at the University of Granada as part of his geology degree and has undertaken exploration campaigns in a number of Spanish-speaking countries. He has previously worked for over 22 years in the minerals industry at Rio Tinto plc, as a Commodity and Equities Analyst at HSBC plc, various mining juniors and most recently as a resources fund manager at Blakeney Management. In the event that the Company elects to exercise its Option over GoldQuest, Mr Marr-Johnson will advise, in particular, on the structure of the Spanish project team and an optimised exploration campaign.

EXPLORATION INTERESTS

As at 31 March 2016, the Company held interests in the following mining Rights ("Rights"):

No licences were acquired or disposed of during the quarter.

For further information on the Company, please visit www.ferrumcrescent.com or contact:

Ferrum Crescent Limited

Justin Tooth, Executive Chairman

Grant Button, Company Secretary

T: +61 8 9474 2995

UK enquiries:

Laurence Read (UK representative)

T: +44 7557 672 432

Strand Hanson Limited (Nominated Adviser)

Rory Murphy/Matthew Chandler

T: +44 (0)20 7409 3494

Beaufort Securities Limited (Broker)

Elliot Hance

T: +44 (0)20 7382 8300

Bravura Capital (Pty) Ltd (JSE Sponsor)

Doné HattinghT (direct): +27 11 459 5037

APPENDIX 5B:

http://www.rns-pdf.londonstockexchange.com/rns/7257W_-2016-4-28.pdf 

Notes to Editors:

Further Information on GoldQuest and the Iberian Projects

GoldQuest is a private company incorporated in Spain which owns 100 per cent. of both the Toral Project and the Lago Project in northern Spain, each having high prospectivity for lead and zinc.

Principal Terms of Ferrum Crescent's Option

· Option to potentially acquire 100 per cent. of GoldQuest. GoldQuest owns 100 per cent. of two lead-zinc exploration projects in the provinces of León and Galicia, in historic Spanish mining areas.

· Up to £22,500 staged option fee, in part shares and part cash, being paid by Ferrum Crescent in return for an exclusive option, valid until 31 July 2016. If exercised, Ferrum Crescent, will be required to:

o pay up to approximately £320,000 in cash consideration (calculated as a fixed amount of £250,000 plus a further cash payment comprising the lesser of 50 per cent. of GoldQuest's current liabilities and £92,500, minus the above mentioned option consideration); and

o issue, credited as fully paid, 100 million new ordinary shares in the capital of Ferrum Crescent.

Toral Project

The Toral Project has been extensively explored historically by its previous owners Portex Minerals Inc. and Lundin Mining S.L. and the 2,024ha of mineral rights contains extensive high grade zinc mineralisation. Located in north-west Spain, approximately 400km north-west of Madrid, the project's licence area hosts excellent road, rail and power infrastructure and is situated in a known historic mining jurisdiction. The asset also has a pre-existing NI 43-101 resource estimate reported by Micon International Co. Limited on 30 April 2012.  

Lago Project

The Lago Project is located approximately 54km to the north-east of the Toral Project. Historical investigations completed by or on behalf of the Spanish mining firm, Exploracion Minera International Espana S.A. ("EXMINESA"), between 1985 and 1990, indicated that mineralisation at the Lago Project may be similar to that encountered at the Toral Project with vertical, lenticular bodies (probably more than one) approximately 800m long by 300m wide.

Further Information on the Moonlight Project, South Africa

Ferrum Crescent's principal project is the Moonlight Iron Project located in Limpopo Province in the north of South Africa. The Moonlight Deposit (upon which the Project is based) is a magnetite deposit located on the Moonlight, Gouda Fontein and Julietta farms and is the main operational focus for the Company. Iscor Limited ("Iscor"), which explored the Project in the 1980s and '90s, reported mineralisation capable of producing a concentrate grading at 68.7% iron. At that time, Iscor concluded that the deposit, which was described as being comparable to the world's best, was easily mineable due to its low waste-to-ore ratio. The beneficiation attributes of Moonlight ore are extremely impressive, with low-intensity magnetic separation considered suitable for optimum concentration.

Metallurgical tests on Moonlight material, undertaken since then by Ferrum Crescent, suggest that Iscor's historical results are conservative, that good metal recoveries can be achieved, and that the resulting concentrates have a high iron content and only negligible impurities, at grind sizes considered to be industry standard (P80 of 75 - 125 microns).

Key features of the Project to date are:

Ø JORC (2012) compliant Mineral Resource;

Ø Historical drilling, drilling by the Group, geological modelling and a high density geophysical survey conducted by the Company in 2012 confirm tonnage upside potential;

Ø 30 year Mining Right granted;

Ø Environmental licence (EIA) in place for the Moonlight mining area (approved 4 April 2013);

Ø Metallurgical test work indicates the potential for high quality concentrate and/or pellets with in excess of 69% iron content and low deleterious elements (DR grade pellets for use in direct reduction iron/electric arc steel-making processes);

Ø The quality of product that can potentially be produced at Moonlight is a clear differentiator against its industry peers, as is the access to infrastructure (port, power and rail);

Ø Duferco offtake partner (4.5 Mtpa plus first right on a further 1.5 Mtpa if not sold domestically). South Africa currently has a growing demand for high grade iron concentrate and/or pellets for its steel industry;

Ø Independent valuation by The Mineral Corporation completed in June 2014 - this valuation served as the basis for the recent BVI (Ovation Capital) transaction;

Ø BEE compliant South African investment company (BVI) will provide a completed BFS to the Group by 2018/19 at no expense to the Group in return for a 39-43% equity position in the Moonlight Project;

Ø Located near Kumba railhead at Thabazimbi (Kumba operation depleting in grade), Limpopo Province, northern South Africa;

Ø New Eskom power plant (4,800MW) commissioning first 800MW module;

Ø Richards Bay port expansion for potential export of future iron ore products; and

Ø Local community, Ga-Seleka, has an effective 3% carried interest in the Moonlight Project.