30th Sep 2015 12:53
LONDON (Alliance News) - Ferrum Crescent Ltd on Wednesday said its pretax loss narrowed in the first half of 2015 after it cut its costs and said its agreement with a black-economic-empowerment entity to invest in the Moonlight project is still not legally binding, as the company is still awaiting payment.
The iron ore developer in South Africa reported a USD1.3 million pretax loss in the year ended June 30, narrowing from the USD2.5 million loss a year earlier as the company, which generates very little in revenue, cut its administrative and share-based payments whilst booking a small gain from remeasuring its financial assets compared to a loss a year ago.
Ferrum's flagship Moonlight iron ore project is at the bankable feasibility study phase after a drilling campaign was completed to investigate the extent of Zone D at the Moonlight deposit and provide information to inform the location of the proposed future mine.
The company also signed a non-binding deal whereby a black-economic-empowerment entity in South Africa has agreed to invest in Ferrum Iron Ore (Pty) Ltd, which holds the Moonlight project. This will not be legally binding until payment from the entity is received.
In South Africa, it is a legal requirement that a black-economic-empowerment entity has a certain stake in all natural resource projects to ensure it benefits local communities and the country.
"In what was a difficult year for exploration and mining companies in the iron ore sector, Ferrum remains confident that the quality of the Moonlight project and its importance to the local communities, Limpopo Province and strategically to the South African government's plans will result in a successful conclusion to investment negotiations in the near future," said Managing Director Tom Revy.
Ferrum shares were down 9.1% to 0.500 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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