LONDON, UK: Ironveld Mining has entered into a Joint Venture Agreement with Pace SA as equal partners to produce and sell Dense Media Separation (DMS) grade magnetite from Ironveld’s mine in Limpopo, South Africa.
Martin Eales, CEO of Ironveld, said: “This is an exciting and value additive transaction for Ironveld, which will utilise our existing mining infrastructure to supply extra quantities of ore, at multiples of the expected smelter requirements per month, to the JV from which we expect profitable cashflow within months. We would like to thank Pace SA for funding the initial capital contribution at a time when we are focusing our resources on the Rustenburg smelter ramp up, and we look forward to working with them.”
Ms Thabisa Hanise, CEO of Pace, said: “This opportunity is a highly attractive legacy project in South Africa and forms an important part of the development of Pace’s vision. I look forward to a long and successful relationship with Ironveld.”
The joint venture states that Ironveld Mining and Pace will establish a newly incorporated company to be called IPace Pty Limited (“IPace”) owned in equal 50% shares. Pace will fund all necessary capital equipment and establishment costs of a beneficiation plant to produce the DMS grade magnetite, currently estimated at approximately ZAR 35 million (approximately £1.65 million), which will be sited on Ironveld’s Lapon mining area.
Ironveld Mining will sell magnetite ore to the JV at cost for processing into DMS grade magnetite and be responsible for operating the beneficiation plant, whilst Pace will be responsible for trading the DMS grade magnetite to end customers.
Ironveld and Pace have agreed to share all profits arising from the JV (after mining costs, production costs and management fees) on a 50:50 basis, save for an initial period whereby Pace will recoup its capital funding on a 60:40 profit share basis.