1 Oct 2014 11:55
1 October 2014
International Ferro Metals Limited
("IFL" or the "Company")
Offer to acquire coking assets
IFL announced today that it has made an offer to Greg Hall and David Merryweather of PricewaterhouseCoopers as receivers and managers of both Pacific Carbon Pty Ltd and Modderriver Minerals Pty Ltd for the assets of Pacific Carbon and Modderriver Minerals subject to certain conditions (including those set out below) (the "Offer"). The Offer is made in conjunction with Portnex International ("Portnex"), a private South African mining and commodities trading company who specialise in metallurgical coke products. IFL and Portnex intend to acquire the assets through a newly incorporated company (with IFL holding two thirds and Portnex holding one third of the issued capital of that new company respectively).
Pacific Carbon and Modderriver Minerals have together 6 retorts located on Kooragang Island in Newcastle, Australia used to produce intermediate or retort coke, which is used in ferroalloy and steel production. These retorts have a capacity of 100,000 tonnes of retort coke per annum, to serve an existing customer base in Australia, New Zealand and Asia.
The coking plants use bituminous coal, historically sourced from the western coalfields in New South Wales and produce a high quality retort coke, along with a small quantity of bituminous tar. The retort process both strengthens the coal and removes a substantial amount of the volatile matter, resulting in an industrial quality carbon which is used in the ferroalloy and steel industries.
The receivers and managers of each of Pacific Carbon and Modderriver Minerals have accepted the Offer, but the Offer is subject to a number of conditions including due diligence, the parties entering into definitive transaction documents and IFL obtaining Australian foreign investment approval. In this regard, IFL and Portnex have been granted exclusivity for 30 days in order to finalise its due diligence and negotiate agreed transaction documents. Should the transaction proceed, it will be funded through internally generated cash resources.
Chris Jordaan, Chief Executive Officer of IFL commented:
"This potential acquisition is an important step in executing our strategy of diversifying our product and customer base. The coke can be sold to a distinct customer base which demands high quality and security of supply. We have a long relationship with Portnex working with them on our alternative reductant initiative, and together we have confidence we can return the Pacific Carbon assets to profit."
For further information please visit www.ifml.comor contact:
International Ferro Metals Limited
Chris Jordaan, Chief Executive Officer
Mob: +27 (0) 82 653 1463
Brunswick Group
Carole Cable / Fiona Micallef-Eynaud
Tel: +44 (0) 20 7404 5959
Numis Securities Limited
James Black / Stuart Skinner / John Prior
Tel: +44 (0) 20 7260 1000
About Portnex International
The Portnex group was formed in 2004 as a privately owned mining company with its headquarters in Johannesburg, South Africa. Portnex has developed, owned and operated mining projects throughout Africa. Portnex's mining concerns included coal, copper, zinc, chrome and gold.
Since 2008, Portnex widened its core business to include the marketing of strategic commodities such as chrome ore, ferrochrome, thermal coal, lean coal, anthracite, coking coal and coke.
The Portnex group has grown to include professional services, ranging from bulk transport to expert consultancy on specialised mining topics.
Portnex is globally active in sourcing various grades of materials in order to meet our customers' specific requirements and ensure optimum performance in metallurgical processes.
About International Ferro Metals
International Ferro Metals produces ferrochrome, the essential ingredient in stainless steel, from its integrated chromite mine and ferrochrome processing operations in South Africa. International Ferro Metals is listed on the London Stock Exchange under the symbol IFL.
Forward Looking Statements
This announcement contains certain forward looking statements which by their nature contain risk and uncertainty because they relate to future events and depend on circumstances that occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward looking statements.