11th Jun 2014 09:47
LONDON (Alliance News) - Ferrum Crescent Ltd Wednesday said an independent valuation of its mineral assets at the Moonlight iron ore project has shown a preferred valuation of USD33.0 million, as it continues to seek funding to conduct a bankable feasibility study for the site.
The iron ore developer said the valuation was carried out by South African consultants, The Mineral Corp, and valued the project with a range between USD24.8 million and USD41.3 million, using the principles and guidelines of the South African Code for the Reporting of Mineral Asset Valuation.
The company noted that the mineral valuation for the company, which was carried out in order to achieve bank approval for the issue of shares to Anvwar Asian Investment, excludes the value of any surface infrastructure established on the site, any movable assets, and the balance sheet circumstances of Ferrum Crescent.
The news comes after Ferrum Crescent said in May that it had 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.
It 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, which it also failed to meet.
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 the expected receipt of the first two payments from Anvwar, it would re-start the bankable feasibility study under the supervision of recently-appointed Managing Director Tom Revy.
The Moonlight Project's most recent mineral resource update showed a total resource of 307.7 million tonnes at 26.9% iron for 82.8 million tonnes of contained iron.
On Wednesday, the company said it remains in discussions with Anvwar and other parties over financing for the Moonlight project's bankable feasibility study, and it will update the market in due course.
Ferrum Crescent shares were down 22% to 1.13 pence, putting it in the top five AIM ALL-share fallers on Wednesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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