IFL.L Regulatory News (IFL)

20 Dec 2005 10:11

International Ferro Metals Limited20 December 2005 20 DECEMBER 2005 International Ferro Metals Limited ("IFM" or "the Company") Exercise of Option: Acquisition of SkyChrome International Ferro Metals Limited (TIDM: IFL) wishes to announce that it hasexercised its option to acquire all of the issued share capital of Purity MetalsHoldings Limited ("Purity"), the owner of an 80% interest in Sky Chrome Mining(Proprietary) Limited ("SkyChrome"), the owner of a chromite property that issituated five kilometres from the IFM site at the Buffelsfontein mine andprocessing facility in the North West Province of South Africa which iscurrently under construction and due for completion in 2006. Highlights • SkyChrome has Indicated Mineral Resource of 28.4 million tonnes at 36.6% Cr2O3 and Inferred Mineral Resource of 29.6 million tonnes at 36.6% Cr2O3; • Acquisition should allow IFM to significantly extend the life of the ferrochrome facility currently under construction; • Production capacity at the ferrochrome facility could be doubled; and • Acquisition provides significant additional value to the Company. Stephen Turner, Managing Director of IFM, commented: "Exercise of the option topurchase Purity brings to IFM a substantial additional chromite resource. TheCompany's Buffelsfontein mine has Measured and Indicated Mineral Resources of24.95 million tonnes at 37.65% Cr2O3 and Inferred Mineral Resource of 7.96million tonnes at 37.60% Cr2O3. Together this gives the Company a totalIndicated Mineral Resources of 53.35 million tonnes at 37.09% Cr2O3 and InferredMineral Resource of 37.56 million tonnes at 36.84% Cr2O3. Construction of theferrochrome facility at Buffelsfontein is progressing well and we remain ontarget to begin production in 2006, reaching a production level of 267,400 tpaby the end of 2007. IFM is well positioned to take advantage of the continuinghigh demand for ferrochrome from the world's stainless steel producers." The Acquisition Under an option agreement signed on 23 August 2005 between IFM, Hague HoldingsLimited ("Hague") and Purity, Hague granted to IFM or its nominee an irrevocableoption to purchase the entire issued share capital of Purity. On 15 December 2005, IFM exercised its option to purchase all the shares ofPurity for a total purchase consideration of the product of 80% of 58 millionmetric tonnes of chromite multiplied by US19.39 cents, less the aggregate of alloption fees paid by IFM to Hague. Interest will accrue on the capital outstanding. Full right of ownership willpass on final settlement of the purchase consideration. Completion is conditional on the approval of the South African CompetitionCommission being granted within 75 Business Days after lodgement of theapplication for such approval. It is anticipated that the application will belodged before the end of January 2006. The geological information in this report that relates to Mineral Resources andReserves is based on data compiled by FA Dabrowki (MSc in Mineral Explorationand member of the South African Council for Natural Scientific Professions) ofGeo consult International (Pty) Ltd, who has consented to the issue of theinformation in this announcement in the form and context in which it appears. ENDS For further information please contact:International Ferro Metals Limited Parkgreen CommunicationsStephen Turner, Managing Director Simon Robinson / Ana RibeiroMob: 07748 245 691 Tel: 020 7493 3713 Notes to Editors About International Ferro Metals Limited International Ferro Metals Limited ("IFM") listed on AIM in September 2005 whenit raised £80m with a Placing of 228,571,429 new Ordinary Shares at 35 penceeach. It had already raised debt financing from Standard Bank, Nedbank and SAABSupporter. The proceeds of the fund raising are being used to acquire and finance theconstruction of the Buffelsfontein ferrochrome smelting and mining operationnear Mooinooi in the North West province, South Africa. International Ferro Metals (SA) Pty Limited ("IFMSA") is the wholly ownedsubsidiary of IFM and will operate the Buffelsfontein project. Global Eagle,chaired by Seth Phalatse, is IFMSA's black economic empowerment partner. One of IFM's major shareholders is its Chinese partner, Jiuquan Iron and SteelGroup Company Limited ("JISCO"). JISCO has entered into an off-take agreementto buy ferrochrome from IFM at market related prices and will market ferrochromein China, Taiwan, Japan and Korea. IFM has also entered into a marketingagreement with New York-listed Commercial Metals Company, which will act as anagent outside JISCO's territories. Ferrochrome Ferrochrome is a common raw material used in stainless steel production. Thisalloy consists of iron and up to 72% chromium. Chromite The elemental name for chromite is Cr2O3. This information is provided by RNS The company news service from the London Stock Exchange