Aim-listed iron-ore miner Ironveld is considering a proposed new major investment by natural resource company Grosvenor Resources, which will potentially invest £5.6-million in the company through a subscription for more than 561.5-million new ordinary shares.
Grosvenor is a new South African private company formed by young entrepreneurs who wish to expand their investments and mining operations in South Africa beyond the bulk commodities space and develop high-value vertically integrated projects.
Following the completion of the subscription, Ironveld and Grosvenor have agreed that Grosvenor will nominate two nonexecutive directors to Ironveld’s board following completion of the subscription.
However, the subscription is conditional on shareholder approval being granted at a general meeting of the company.
Ironveld chairperson Giles Clarke on October 22 said the agreement was “the culmination of a huge effort by the Ironveld team in what have been trying circumstances in South Africa this year”.
The substantial investment in Ironveld by Grosvenor represents an exciting opportunity for Ironveld to bring on board a credible and serious partner to help drive its strategy, the company said.
It added that the net proceeds from the subscription would provide a substantial proportion of the overall project funding required as well as ensure that all corporate overheads and costs associated with the new mining right application for the company’s subsidiary, Luge Prospecting and Mining, were covered for the foreseeable future.
The company will look to use Grosvenor’s expertise and access to further funding in order to progress the broader financing required to bring the company’s project into development.
Both parties have indicated their commitment to ensuring Ironveld can start mining and processing of its magnetite ore in the near term.