Ironveld to Acquire South Africa Smelting Business.
M2 EQUITYBITES-April 13, 2017-Ironveld to Acquire South Africa Smelting Business
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13 April 2017 - UK-based, South Africa-focused mining company Ironveld plc (LSE: IRON) has signed two non-binding memoranda of understanding with, inter alia, Siyanda Inkwali Smelting Services Ltd to acquire a 100% interest in Siyanda Smelting and Refining Ltd and 70% of Power Alt Ltd., the company said.
Ironveld is the owner of an iron, vanadium and titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province, South Africa.
Siyanda Smelting currently owns a smelting plant comprising three arc furnaces and two induction furnaces, a convertor and associated equipment with a smelting capacity of 7.5mw.
Power Alt is the direct owner of an Independent Power Producing Plant that generates 10.6mw of electricity through four natural gas powered turbines.
The transactions will enable early production of HPI, Vanadium and Titanium from the Project and will facilitate supply into the company's offtake agreements.
They will provide the company with a readymade smelter that is expected to deliver highly attractive economic returns and early free cash flow whilst providing the platform for organic growth.
The Smelting Plant and IPP are located in Middleburg, South Africa, around 300 kilometres from the project.
Due diligence has been completed. The aim is to agree legally binding purchase agreements by the end of April 2017, with the final transaction being subject to shareholder approval with the necessary shareholder circular to be posted in due course. There can be no certainty that the transactions will occur, further announcements will be made in due course
Siyanda is a private South African company that owns Siyanda Smelting which will be the direct owner of five furnaces and the registered owner of the immovable property on which the furnaces are situated.
The company also owns 70% of Power Alt, the owner of the immovable property on which an associated Independent Power Producing Plant that generates 10.6mw of electricity through four natural gas powered Jenbacher turbines are situated. It is envisaged will serve as the supplement and backup power to the Smelting Plant.
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|Publication:||M2 EquityBites (EQB)|
|Date:||Apr 13, 2017|
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