LONDON: Along with its prospective strategic partner, Inclusive Investment Group Proprietary Limited (IIG), Ironveld has made an application to a major South African funding institution for project development funding which, if successful, would provide Ironveld with sufficient funds to start mining and production at the Company’s magnetite project in South Africa.

On 30 March 2020, the Company announced that it had entered into arrangements with IIG to raise potential gross proceeds of approximately US$3.2 million. In particular, the Company and IIG entered into an Option Agreement pursuant to which on the grant of the Option (which is conditional) IIG can subscribe for 440,176,070 new ordinary shares in the capital of the Company at a price of 0.42 pence per share. The option was to expire on 17 June 2020.

In order to bring the timetable for the potential Option exercise in line with the proposed project financing the Company has agreed to an extension to the exercise period of the Option to 30 September 2020.

In consideration, IIG has agreed to provide the Company with a bridge funding facility of up to ZAR3.70 million (approximately US$200,000) which is intended to provide the Company with the requisite funds to continue its operations until such time as the funding application is reviewed.

Martin Eales, Chief Executive Officer of Ironveld, said: “In recent weeks we have been working very productively with IIG and the potential for a larger project financing for Ironveld is becoming much more realistic.  If successful, the financing will allow the Company to progress various workstreams and transition to mining and production at our magnetite project, marking a transformative milestone for Ironveld.

“Due to the timescale of this financing and the impact of COVID-19 restrictions we have agreed to IIG’s request to extend the period for exercising the Option to 30 September 2020.  We are pleased that IIG has demonstrated its continued commitment to the transaction by agreeing to the Bridge Loan Facility announced today.”