JOHANNESBURG (miningweekly.com) – Ferrum Crescent’s share price on the JSE fell by 25% on Friday as the company announced it would withdraw from the Moonlight iron-ore project, in South Africa’s Limpopo province, unless an alternative development opportunity can be secured in the short term.
This follows after the February termination of a joint venture (JV) agreement with Business Venture Investments (BVI), which had intended to earn a 43% interest in the project, in exchange for funding a bankable feasibility study (BFS) on the project. BVI had been unable to fund the BFS.
Ferrum, which is listed on the JSE, the Aim and the ASX, had subsequently entered into negotiations with a third-party group about the potential development of the project, but these negotiations have now been terminated.
“The company spent considerable time, effort and resources in searching for the right development partner for the Moonlight project to help address the significant headwinds of the global iron-ore market.
“The board has explored conventional technology routes and, more recently, certain new technological advancements which potentially offered lower capital requirements and operating expenses.
“However, despite our best endeavours, we have been unable to secure a path for the development of the Moonlight project and are mindful of the significant costs associated with continuing to hold and maintain the project,” Ferrum chairperson Justin Tooth said in a statement to shareholders on Friday.
He added that the company would now focus on its first drill programme at the Toral lead-zinc project in northern Spain.
The drill programme is aimed at establishing the presence of mineralisation at surface and defining the most prospective areas of mineralisation for a targeted drill campaign.
It will intersect shallow untested targets within the main anomalous area.
“During the quarter under review, we have advanced our lead-zinc assets in Spain smoothly through channel sampling, soil sampling and mapping activities, culminating in the final stages of preparation for a drilling campaign,” Tooth said.