8th May 2014 11:23
LONDON (Alliance News) - Ferrum Crescent Ltd saw its shares slide Thursday, after it said it has not received the second payment from Anvwar Asian Investment that was due as part of a deal to sell a 35% interest in its subsidiary that holds its Moonlight iron ore assets in South Africa for USD10 million.
The iron ore developer was paid USD500,000 as part of the deal during March, and said at the time that it expected a second USD500,000 payment by the end of April. However, on Thursday, the company said Anvwar Asian Investment has failed to make this payment and requested a delay until May 26.
Ferrum said it is taking advice on how to move forward regarding the delay.
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 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 AAI directly into the project clearly highlights the undervalued position of the company," Revy said in March.
Ferrum Crescent shares were down 31% to 0.861 pence, making it the top AIM ALL-Share faller Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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