IFL.L Regulatory News (IFL)

9 Jul 2007 07:38

International Ferro Metals Limited09 July 2007 Not for release, publication or distribution in or into the United States, theRepublic of Ireland, Australia, the Republic of South Africa, Canada or Japan. 9 July 2007 International Ferro Metals Limited ("IFL" or "the Company") Placing of new ordinary shares and directors' dealing IFL announces that it has raised £85.2 million (before expenses) through theplacing by Numis Securities Limited of 71 million new ordinary shares withcertain existing shareholders and new institutional investors at 120 pence pershare. HIGHLIGHTS •The IFL group is a low cost ferrochrome producer with guaranteed off-take agreements, long life resources and a highly experienced management team £€85.2 million raised (before expenses) €71m new ordinary shares placed at 120p/share •Proceeds will be used to fund the equity component of the planned expansion of existing chromite mining and ferrochrome processing operations •Expansion is projected to increase production capacity by up to 150% to 665,000 tpa •Off-take agreements should more than double following the expansion •Strong forecast ferrochrome demand (66% growth between 2007 and 2015) driven by expanding demand for stainless steel especially from China •Move to the Official List of the Financial Services Authority and to trading on the main market of the London Stock Exchange in August 2007 Stephen Turner, Managing Director of International Ferro Metals commented "Thestronger equity base positions IFL to take full advantage of the current andforecast shortage in the supply of ferrochrome. Through the issue of additionalshares representing 16.5% of the Company, its production capacity will beincreased by up to 150%. With the ferrochrome price increasing to US$1/lb, IFLlooks forward to an excellent period of growth". For more information contact: International Ferro Metals Limited Brunswick Group Stephen Turner, Managing Director Carole Cable / Laure Korenian-Chabert Mob: +61 418 440 844 Tel: 020 7404 5959 www.ifml.com Grant Thornton Corporate Finance Numis Securities Limited Fiona Owen John Harrison Tel: 020 7383 5100 Tel: 020 7260 1000 Not for release, publication or distribution in or into the United States, theRepublic of Ireland, Australia, the Republic of South Africa, Canada or Japan. 9 July 2007 International Ferro Metals Limited ("IFL" or "the Company") Placing of new ordinary shares and directors' dealing IFL announces that it has raised £85.2 million (before expenses) through theplacing (the "Placing") by Numis Securities Limited of 71 million new ordinaryshares (the "Placing Shares") with certain existing shareholders and newinstitutional investors at 120 pence per share (the "Placing"). IFL, its subsidiary International Ferro Metals (SA) (Pty) Ltd ("IFMSA") and itsother subsidiaries (collectively "IFM" or "Group") are a low cost ferrochromeproducer. The proceeds of the Placing will be used to fund the equity componentof the planned expansion of IFM's existing chromite mining and ferrochromeprocessing operations at the Buffelsfontein mine, involving the construction ofup to three additional furnaces, a pelletising and sintering plant and abeneficiation plant (the "Expansion"). Further details of the Expansion aredescribed below. Further to the Company's announcement on 4 April 2007 regarding its proposedmove to the Official List of the Financial Services Authority ("FSA") and totrading on the main market of the London Stock Exchange ("LSE") for listedsecurities, the Company announces that this process is ongoing and expected tocomplete in August 2007. Further details are described below. The Expansion The layout of the Buffelsfontein processing facility was designed to allow forpotential expansion with sufficient space set aside for an additionalpelletising and sintering plant and additional furnaces. The Company intends toincrease production through the development of up to three additional furnacesat the site. IFM has commenced a feasibility study to confirm the economic viability ofincreasing the capacity of the Buffelsfontein facility up to 665ktpa offerrochrome. The Expansion would incorporate the installation of up to threeadditional 66MVA furnaces with pre-heaters, a 600ktpa pelletising and sinteringplant and an ore beneficiation plant of 1.1Mtpa, with associated services. TheCompany also proposes to fit pre-heaters to the two existing furnaces toincrease their efficiency, so that the total capacity on completion of theExpansion will more than double to 665ktpa (assuming that three additionalfurnaces are constructed). Further details will be announced followingcompletion of the feasibility study. SRK Consulting (South Africa) (Pty) Ltd ("SRK") has reviewed IFM's resources andreserves and its summary is extracted in the table in Appendix I. SRK estimatesthat IFL will have a 16 year mine life from current reserves for the currentfacility. Management believes that IFM's resources and reserves will besufficient to supply the expanded facility for at least 30 years. IFM is currently in negotiations with specialist contractors, who are recognisedas being industry leaders within their respective fields with experience insuccessfully erecting and commissioning plants of a similar nature, to constructthe new furnaces as part of the Expansion. It is the intention of the Directors,where possible, to engage these contractors on fixed price lump sum turn-key("LSTK") contracts with performance guarantees and penalty clauses for latecommissioning; an approach that was successfully employed by IFM in theconstruction of the existing facility. While contracts have not yet beenconcluded, acceptable quotes have been received and negotiations areprogressing. The Directors have set the following progress targets in order to implement theExpansion: July 2007: Complete Placing September 2007: Lock-in LSTK contractorsDecember 2007: Obtain addendum to environmental licenceJanuary 2008: Complete feasibility studyFebruary 2008: Secure debt financeMarch 2008: Commence constructionSeptember 2009: Complete construction and commence ramp-upMarch 2010: Reach full design capacity production The preliminary indicative capital cost of the Expansion has been estimated atapproximately £223.4 million (R3.2 billion) for three additional furnaces andthe preheaters to be installed at the current facilities, although this willneed to be confirmed by the feasibility study that is currently underway. TheCompany expects the feasibility study to recommend the Expansion, and is raisingfunds prior to completion of the feasibility study in order to take advantage ofthe buoyant ferrochrome market conditions and to be able to place orders forcertain long lead-time items without which the Expansion will not be able toproceed according to the planned timetable. Whilst the Directors are confident that the feasibility study will confirm theeconomic viability of the Expansion, in the event that it does not, IFM will usethe proceeds of the Placing to pursue consolidation opportunities within theferrometals industry. Financing the Expansion The Directors intend to finance the Expansion by a combination of equity anddebt. The equity element will consist of the net proceeds of the Placing withthe balance of the funding requirements to be provided by debt facilities. Theproposed debt facilities are intended to raise a minimum of approximately£143.8m (R2.1 billion). The Group has received indicative offers from four majorinternational banking groups to provide such debt facilities. The expectedsources and intended uses of such funds are summarised in Appendix II. IFM and the Ferrochrome market Continued increases in global stainless steel production have furtherstrengthened demand for ferrochrome with stainless steel production forecast togrow at 5.9% per annum. The restrictions on the export of chromite ore from India introduced in March2007 have threatened ferrochrome production in China. This and other factorshave resulted in a tight ferrochrome market. The demand for ferrochrome is forecast to grow 66% between 2007 and 2015 with aforecast annual growth rate of 5.2% to 2020. The price of charge chrome isforecast to average US$0.79 over the next decade (the current price beingUS$1.00/lb, up from US$0.75/lb in the first quarter of 2007). IFM continues to be a low-cost producer of ferrochrome, with total operatingcosts for 2008 expected to be around US$0.40/lb. Following Expansion and ramp upto full production, IFM's costs are expected to remain in the lowest quartile ofall producers, and one of the lowest of the South African producers. Guaranteed Off-take Agreements IFMSA has an off-take agreement with Jiuquan Iron and Steel Group CompanyLimited ("JISCO"), the largest steel maker in Northwest China. Under the termsof the agreement entered into in August 2005, JISCO agreed to purchase at least120,000 tpa of ferrochrome on a take-or-pay basis at a market related price.JISCO also agreed to act as agent for IFMSA to market ferrochrome in China,Taiwan, Japan and Korea. The duration of this contract is indefinite, althoughit may be terminated after five years in certain circumstances. JISCO hascommissioned a 600,000 tpa stainless steel production facility. Pursuant to anaddendum, JISCO has agreed to increase its commitment under the off-takeagreement to 300,000 tonnes of ferrochrome per year from the commencement ofproduction from IFM's expanded facility. In addition, IFMSA has a further off-take agreement with CMC Cometals, adivision of Commercial Metals Company, a New York Stock Exchange listed companywith a market capitalisation of approximately US$2.5 billion, to purchase 30,000tpa of ferrochrome, as well as 20,000 tpa of ferrochrome fines, on a take-or-paybasis at a market related price. In addition, CMC Cometals acts as an exclusiveagent selling the remainder of the Group's ferrochrome production outsideJISCO's territories as identified above. The term of the agreement is eightyears from 1 July 2007. CMC Cometals has also agreed to double its minimumcommitment under the off-take agreement to 100,000 tonnes of ferrochrome peryear from the commencement of production from the expanded facility. The Placing IFL has raised £85.2 million (before expenses) through the placing by NumisSecurities Limited of 71 million new ordinary shares (the "Placing Shares"),with certain existing shareholders and new institutional investors at 120 penceper Placing Share. The Placing was not underwritten. As part of the Placing, the Company has issued and allocated 25,488,864 of thePlacing Shares (the "JISCO Subscription Shares") to JISCO pursuant to aSubscription Agreement, at a price of 120 pence per JISCO Subscription Share(the "JISCO Subscription"). JISCO's subscription for 6,957,864 of the JISCOSubscription Shares (which will increase its holding above its current 26.1%)(the "Additional JISCO Shares") will be conditional upon Australian ForeignInvestment Review Board approval "FIRB Approval") being obtained, which JISCO isin the process of applying for. In addition, certain Directors have exercised options ("Exercise of Options"),as detailed below, resulting in the issue of 2,250,000 new ordinary shares tothose Directors ("Option Shares"). The Exercise of Options also required theissue of a further 794,655 new ordinary shares ("Anti-dilution Shares) to JISCOas a result of its anti-dilution rights agreed at the time of its originalsubscription for shares in IFL. Following the Exercise of Options, pursuant to the Subscription Agreement JISCOhas agreed to acquire 8,108,333 ordinary shares in the Company from certainDirectors and senior management of the Company (the "Sale Shares"), at a priceof 120 pence per Sale Share. The transfer of the Sale Shares is conditional uponFIRB Approval being obtained. Following the Placing and JISCO Subscription, and subject to FIRB Approval beingobtained as described above, JISCO will have an interest of 146,143,081 ordinaryshares or 29.1% of the issued share capital of IFL. IFL's issued share capital following the issue of the Placing Shares, OptionShares, Anti-dilution Shares ("New Ordinary Shares")and receipt of FIRB Approvalwill be 502,206,551 ordinary shares. Application will be made for the New Ordinary Shares to be admitted to tradingon AIM. Dealings in the New Ordinary Shares (other than the Additional JISCOShares) on AIM are expected to commence on 12 July 2007. Dealings in theAdditional JISCO Shares will commence as soon as practicable following receiptof the FIRB Approval. Directors' exercise of options and dealings On 9 July 2007, the Company issued and allotted 2,250,000 ordinary shares to thefollowing Directors of IFL pursuant to an exercise of options. ---------- ----------- -----------Director Exercise Price Number of Outstanding------------------- ---------- Ordinary Shares Share Options ----------- -----------Anthony Grey* A$ 0.40 500,000 nil A$ 0.65 500,000 nilStephen Turner A$ 0.40 200,000 nil A$ 0.65 200,000 nilTerenceWillsteed** £ 0.35 250,000 nilStephen Oke £ 0.35 100,000 150,000Xiaoping Yang £ 0.35 250,000 nilTian Xia £ 0.35 250,000 nil------------------- ---------- ----------- ----------- TOTAL 2,250,000 150,000 * Anthony Grey's 1,000,000 ordinary shares are held by Dalvin Pty Limited, a company of which Anthony Grey is a beneficial owner. ** Terence Willsteed's 250,000 options are held by Patermat Pty Ltd as trustee for T.V.Willsteed & Associates Pty Ltd Superannuation Fund, in which Terence Willsteed has a beneficial interest. Directors' and Senior Management's sale of shares to JISCO On 9 July 2007, certain Directors and senior management (and persons connectedwith them) of IFL agreed to sell ordinary shares to JISCO at a price of 120p pershare, subject to FIRB Approval, as follows: -------------- -------------Director / Senior Manager Number of Subsequent------------------- Ordinary Shares Holding of sold Ordinary Shares -------------- -------------Anthony Grey* 633,333 1,266,667StephenTurner** 6,458,333 6,916,667Ian Watson 333,333 333,334TerenceWillsteed*** 83,333 166,667Stephen Oke 100,000 nilXiaoping Yang 83,333 166,667Tian Xia 83,333 166,667Ronald Barnard 333,333 333,334------------------- -------------- ------------- TOTAL 8,108,333 9,350,001 * Anthony Grey's 633,333 ordinary shares are being sold by Dalvin Pty Limited, a company of which Anthony Grey is a beneficial owner. **Stephen Turner's 6,458,333 ordinary shares are being sold by Kin Yip International Limited, a company of which Stephen Turner is a beneficial owner. *** Terence Willsteed's 83,333 ordinary shares are being sold by Patermat Pty Ltd as trustee for T.V.Willsteed & Associates Pty Ltd Superannuation Fund, in which Terence Willsteed has a beneficial interest. Statistics Number of Placing Shares being issued pursuant to the Placing 71,000,000 Number of Option Shares being issued pursuant to the Exerciseof Options and Anti-dilution Shares being issued to JISCO as aconsequence of such exercise 3,044,655 Number of JISCO Subscription Shares being issued pursuant tothe JISCO Subscription (assuming that FIRB Approval isgranted) 25,488,864 Number of Ordinary Shares in issue immediately following thePlacing, Exercise of Options, and the JISCO Subscription 502,206,551 Approximate percentage of issued Ordinary Share capitalsubject to the Placing 16.5% Approximate percentage of issued Ordinary Share capital to beheld by JISCO following the Placing, issue of Anti-dilution Shares and acquisition of Sale Shares (assuming that FIRBApproval is granted) 29.1% Estimated gross proceeds receivable by the Company pursuant to £85.2 millionthe Placing Proposed Move to the Main List of the London Stock Exchange Further to the Company's announcement on 4 April 2007 stating that IFL hadcommenced the process to apply for admission to the Official List of the FSA andto trading on the main market of the LSE for listed securities, the Companyannounces that it is continuing to progress the preparation of its prospectus insupport of its application for admission to the main market of the LSE. Pursuant to Rule 41 of the AIM Rules, the Company hereby gives notice of theintended cancellation of admission to trading of the Company's issued sharecapital on AIM. It is expected that the Ordinary Shares will be simultaneouslycancelled from trading on AIM and admitted to listing on the Official List ofthe FSA and to trading on the main market of the LSE in August 2007, subject tothe receipt of the necessary approvals from the UKLA. General Numis Securities, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting as broker to the Company in connectionwith the Placing and the JISCO Subscription and other matters referred to inthis announcement and will not be responsible to any person other than theCompany for providing the protections afforded to customers of Numis Securities,or for advising any such person on the contents of this announcement or anyother transaction, arrangement or matter referred to herein. Grant Thornton Corporate Finance, which is authorised and regulated in theUnited Kingdom by the Financial Services Authority, is acting as nominatedadviser to the Company in connection with the Placing and other matters referredto in this announcement and will not be responsible to any person other than theCompany for providing the protections afforded to customers of Grant ThorntonCorporate Finance, or for advising any such person on the contents of thisannouncement or any other transaction, arrangement or matter referred to herein. This Announcement does not constitute an offer to sell or issue or thesolicitation of an offer to buy or subscribe for securities in the UnitedStates, Canada, the Republic of Ireland, Australia, the Republic of South Africaor Japan or any jurisdiction in which such offer or solicitation is unlawful orwould impose any unfulfilled registration, publication or approval requirementson the Company or Numis and should not be relied upon in connection with anydecision to acquire the Ordinary Shares or any other IFL securities. The information contained in this Announcement is not for release, publicationor distribution, directly or indirectly, to persons in the United States.Neither this announcement nor any copy of it may be: (i) taken or transmittedinto the United States; (ii) distributed, directly or indirectly, in the UnitedStates or to any US Person (within the meaning of regulations made under theSecurities Act; (iii) taken or transmitted into or distributed in Canada, theRepublic of Ireland, Australia, the Republic of South Africa or Japan or to anresident thereof for the purpose of solicitation or subscription or offer forsale of any securities or in the context where the distribution thereof may beconstrued as such a solicitation or offer. Any failure to comply with theserestrictions may constitute a violation of the securities laws or the laws ofany such jurisdiction. The Ordinary Shares have not been, and will not be, registered under the UnitedStates Securities Act of 1933 (as amended) (the "Securities Act") or under thesecurities laws, or with any securities regulatory authority, of any state orother jurisdiction of the United States or of any province or territory ofCanada, Australia, the Republic of South Africa or Japan. Accordingly, unless anexemption under any applicable law is available, the Ordinary Shares may not bedirectly or indirectly offered, sold, taken up or delivered, in, into or fromthe United States, Canada, Australia, the Republic of South Africa or Japan orto or for the account or benefit of any national, resident or citizen of theUnited States or any person resident in Canada, Australia, the Republic of SouthAfrica or Japan. The distribution of this announcement in jurisdictions other than the UnitedKingdom may be restricted by law and therefore any persons who are subject tothe laws of any jurisdiction other than the United Kingdom should informthemselves about, and observe any applicable requirements. Any failure to complywith these requirements may constitute a violation of the securities laws orother laws of any such jurisdiction. This announcement has been prepared for thepurposes of complying with English law and the information disclosed may not bethe same as that which would have been disclosed if this announcement had beenprepared in accordance with the laws of jurisdictions outside England. APPENDIX I------------- ------ ------ ------ --------------- ------ ------ ------MINERAL MINERALRESERVES RESOURCES Tonnage Cr2O3 Cr:Fe (geological Tonnage Cr2O3 Cr:Fe losses applied) (kt) (%) ratio (kt) (%) ratio ------------- ------ ------ ------ --------------- ------ ------ ------Proved MeasuredBuffelsfontein Buffelsfontein MG3 5,013 34.93 1.25 MG2T 2,026 36.84 1.33MG2 (1) 5,916 21.30 1.04 MG2B 5,227 37.25 1.33MG1 4,310 32.97 1.11 MG1 5,338 40.25 1.47Probable IndicatedBuffelsfontein Buffelsfontein MG3 1,235 34.46 1.19 MG2T 542 37.14 1.36MG2 (1) 1,537 21.30 1.11 MG2B 1,452 37.93 1.37MG1 1,194 32.97 1.23 MG1 1,584 40.49 1.48------------- ------ ------ ------ --------------- ------ ------ ------Proved &Probable 12,957 26.26 1.09 Measured & 22,417 37.53 1.35 IndicatedReserves Resources------------- ------ ------ ------ --------------- ------ ------ ------ Inferred Buffelsfontein MG3 1,906 34.38 1.18 MG2T 739 37.27 1.36 MG2B 2,107 38.00 1.36 MG1 2,216 40.55 1.49 Sky Chrome MG1 55,552(3) 36.63 n/r ------------- ------ ------ ------ --------------- ------ ------ ------ Inferred 62,520 36.75 - (2) ------------- ------ ------ ------ Resources ------ ------ ------ ---------------Total Reserves 12,957 26.26 1.09 Total Resources 84,937 36.96 - (2)------------- ------ ------ ------ --------------- ------ ------ ------ 1 Tonnages and grades for the MG2 are before scalping underground and include the parting between the MG2B and MG2T reefs. 2 The Cr:Fe ratio cannot be calculated for the totals since this value was not reported for the MG1 at Sky Chrome. The MG2 resource at Sky Chrome is excluded from the table. 3 Total inferred resource of 55,552Kt, of which 80% is attributable to IFL. IFL also has the right to mine the remaining 20% subject to payment of a royalty. APPENDIX II EXPECTED SOURCE OF FUNDS AND USE OF FUNDS EXPECTED SOURCE OF FUNDS1 Equity Rand £2 ------ ----Financial institutions 775,509,757 54,613,363JISCO 434,330,243 30,586,637----------- ----------- ----------- 1,209,840,000 85,200,000Debt3Senior debt (excl interest) 2,042,010,803 143,803,578Working capital facility 187,500,000 13,204,225----------- ----------- ----------- 2,229,510,803 157,007,803Total financing 3,439,350,803 242,207,803----------- ----------- ----------- 1. Based on 3 furnace expansion 2. Using R14.2: £1.00 exchange rate 3. Balancing figure: assumes no finance from operating cash flow EXPECTED USE OF FUNDS 3 smelters Buffelsfontein site Rand --------------Three furnaces 1,530,000,000Pelletising & Sintering plant 605,000,000 Bulk earthworks - plant area 21,700,000Additional internal/external roads 75,300,000Railway line and sidings for finished product & rawmaterial 31,200,000offloadingServices 59,300,000Infrastructure 33,700,000Smelter Services 34,700,000Admin, infrastructure, general 96,400,000Slag dump conveyor & stacker 7,700,000Allowance for price escalation 50,100,000 Skychrome projectFeasibility study 18,200,000Opencast mining - establishment per strip 13,500,000Preparation for underground mining 185,300,000Infrastructure, building services 18,000,000Beneficiation plant, including crush & screen, 187,300,000tailings damAllowance for price escalation 34,800,000--------------------- -------------------------Total expansion project 3,002,200,000 Preheaters 145,000,000Capital projects identified as part of 2008 budget &costs 25,650,803related to the feasibility study of Skychrome --------------------- ------------------------- 3,172,850,803 Working capital 187,500,000Transaction costs 79,000,000 --------------------- -------------------------Total costs 3,439,350,803--------------------- ------------------------- IMPORTANT INFORMATION APPENDIX III RISK FACTORS RISK FACTORS Any investment in IFL is subject to a number of risks. Some of the followingfactors relate principally to the Group's business and the sector in which itoperates. Other factors relate principally to an investment in ordinary sharesin the Company ("Ordinary Shares"). The risks and uncertainties described beloware not intended to be exhaustive and are not the only ones facing the Group.Additional risks and uncertainties not currently known to the Group, or that theGroup currently deems immaterial, may also have a material adverse effect on theGroup's business, financial condition and results of operations. If this occurs,the price of the Ordinary Shares may decline and shareholders could lose all orpart of their investment. Investors should consider carefully whether aninvestment in Ordinary Share is suitable for them in light of the information inthis document and their personal circumstances Risks specific to the Group's operations The successful completion of the Expansion depends on the following key matters:the completion of a feasibility study; agreeing contracts for construction onappropriate terms; the obtaining of necessary permits and rights including a neworder mining right to mine the Sky Chrome deposit; the sourcing of suitableequipment and labour in an economic manner; the Company's reliance oncontractors; the long lead times involved in obtaining certain key capitalitems; and the receipt of sufficient financing. Problems arising with any ofthese elements may prevent the Group from successfully carrying out the plannedExpansion. Any increase in the price of electricity, which is a major element of theGroup's cost structure, and which is subject to a range of different factors,could have a negative impact on the Group's future profitability. Interruptions in the electricity supply to the Group's operations may adverselyaffect the Group's business due to the downtime to the furnaces that they cause.An inadequate supply of water, which has been a problem at certain occasions inthe past, may negatively impact production. The failure to retain or recruit key senior personnel of the appropriate calibrewould adversely affect the Group's business due to the Group's dependence on theexperience and expertise of such senior employees. The failure to retain or recruit sufficient skilled labour from the localpopulace may cause a loss in productivity to the Group's operations. The Group's operations may be adversely affected by labour disputes or changesin South African labour laws. There is no guarantee that the Group will be able to source sufficient financingto maintain or expand its operations in the planned manner. A weakening of the US$ against the Rand may have a negative impact on theGroup's financial position as the Group's revenues are generally US$ denominatedwhilst its costs are generally Rand denominated. Any disruption or weakening in the Group's current key business relationships,particularly with JISCO and CMC Cometals, could have a negative impact on theGroup's ability to carry on its business. Risks specific to the Group's South African location South African land and mineral rights could be subject to land claims, whichcould impose significant costs and burdens on the Group. In addition, someuncertainty exists in relation to the legislation surrounding South AfricanBlack Economic Empowerment mining transactions, which could have a negativeimpact on the Group's ability to procure new order mining rights. If the outstanding land claim relating to the farm Buffelsfontein 465 JQ issuccessful, the Group may have to mediate and potentially pay compensation. There is no assurance that future political and economic conditions in SouthAfrica will be conducive to the development of natural resources by foreignfinancial investors. HIV/AIDS is perceived as a serious threat to maintaining a skilled workforcefrom the local populace. Risks specific to the Group's industry Fluctuations in the price of ferrochrome, which can occur through many differentfactors, may adversely impact the Group's business. The Group's business operations are subject to risks and hazards inherent in themining industry, which could adversely effect, among other things, thedevelopment of the Lesedi and Skychrome properties, production quantities andrates, and various costs and expenditures. There can be no guarantee that an identified reserve or resource will become orcontinue to qualify as a commercially mineable and exploitable deposit. Legal proceedings may arise from time to time in the course of the Company'sbusiness, for example in the case of the delay in Bateman's completion of thepelletising and sintering plant. There can be no guarantee that the Group willbe successful in any litigation or that it will be able to negotiate anacceptable settlement. The Company's insurance may not provide adequate cover in certain unforeseencircumstances, and insurance against certain risks (including certainliabilities for environmental pollution or other hazards as a result ofexploration and production) is not generally available. The Group is subject to environmental risks inherent in the mining industrywhich may materialise in the form of significant costs relating to any clean-upor rehabilitation. Failure to comply with health and safety legislation could result in litigationwhich in turn could adversely affect the Group's business. Unforeseen economic and political events may have a negative impact on theGroup's share price. Risks relating to the Ordinary Shares There is no guarantee that JISCO's interests will be aligned to the interests ofholders of Ordinary Shares. IFL's share price is subject to market and other forces and may consequently bevolatile. This information is provided by RNS The company news service from the London Stock Exchange