30th May 2014 06:57
LONDON (Alliance News) - Ferrum Crescent Ltd Friday said it has failed to receive the second funding payment of GBP500,000 from Anvwar Asian Investment, as part of a deal to sell 35% interest in a subsidiary that holds its Moonlight iron ore assets in South Africa for USD10 million, within a requested extension period.
The iron ore developer was paid USD500,000 as part of the deal during March, and expected a second USD500,000 payment by the end of April. However, earlier in May, the company said Anvwar has failed to make this payment and noted that the investor had requested a delay until May 26.
On Friday, the company said that, although it did not agree to a revised timetable, the payment had still not been received, and it is in discussions with Anvwar over its breach of contract.
The investment deal was set up in March. Ferrum said the payment of the first USD1 million of the deal would trigger a bankable feasibility study at the Moonlight Iron Ore Project. The remaining USD9 million is due to be paid by the end of 2015.
A bankable feasibility study is an evaluation of a proposed mining project to determine whether the mineral resource can be mined economically. It is of sufficient detail that it can be used to arrange project financing.
In March, Ferrum had said that following its two first payments, it will re-start the bankable feasibility study under the supervision of recently-appointed Managing Director Tom Revy.
"I believe the recommencement of the BFS is the first step towards realising the true value of the project to Ferrum Crescent investors. The investment by [Anvwar] directly into the project clearly highlights the undervalued position of the company," Revy said in March.
On Friday, Ferrum said it is in discussions with other parties over funding, and it is looking at financing options that will secure partnerships for the completion of the BFS and beyond.
By Tom McIvor; [email protected]; @TomMcIvor1
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