7th Oct 2025 13:14
(Alliance News) - Ironveld PLC on Tuesday said its majority-owned subsidiary Lapon Mining Pty Ltd has entered a binding agreement to hand over operational responsibility of its Limpopo magnetite project.
The London-based mining company targeting South Africa has a 74% stake in Lapon Mining Pty Ltd, which currently oversees the Lapon magnetite venture.
The subsidiary has signed a binding agreement with Daemaneng Minerals Pty Ltd, which will assume funding and operating obligations for mining operations at Lapon over a five-year period.
The contract's initial term is three years, with a five-year exclusivity condition. The handover includes all capital and operational costs, plus the establishment of processing infrastructure, "thereby eliminating any future mining-related expenditure for Lapon Mining," Ironveld said.
This allows the firm "to retain full ownership and control of the mining licence and governance oversight," Ironveld said, but with a derisked cost base, and without its previous responsibilities.
The firm's shares rose 17% to 0.052 pence on Tuesday afternoon in London.
Ironveld expects Daemung to fund approximately ZAR500 million, or GBP 21.6 million, in total expenditure over five years. Daemung also must supply all ore required by Ironveld's joint venture dense media separation plant, "irrespective of volume or demand levels with no upper limit on supply volumes".
The framework does not entitle Daemung to equity or interest in Lapon Mining or any other Ironveld business, though Chief Executive Kris Andersson described the deal as "mutually beneficial and commercially aligned".
"By engaging an established and operationally experienced partner, we are unlocking immediate production at Lapon without further capital outlay," Andersson added.
As far as Ironveld is concerned, the tie-up creates a new "income channel through the commercialisation of run-of-mine material." Operations are expected to begin "shortly", with production and first ore deliveries to Ironveld's DMS plant targeted within the next 30 days.
"In parallel, initial ROM sales to offtakers are anticipated to begin, further enhancing near-term cash flow generation," Ironveld added.
It is currently negotiating the terms of an operator agreement for the DMS plant with its joint venture partner Sable Platinum Holdings Pty Ltd. Ironveld note progress, "with both parties confident that a mutually acceptable agreement... will be reached in the very near term."
The plant's construction was completed in May, and it has since been commissioned to produce magnetite suitable for the DMS process. Meanwhile, mining activities have advanced, with the first successful blast in June, and about 4,000 tonnes of magnetite ore delivered to the plant by July.
Ironveld noted that the tender for the supply of magnetite "remains open and under evaluation, with no award made to any party at this stage." Alluding to a potential interested partner, Ironveld said: "While the reasons for the delay in awarding the tender have not been communicated, we have no reason to believe anything other than that we remain well positioned within the process.
The firm maintained that demand for magnetite is strong in South Africa, Mozambique and Botswana, where it reports "active commercial interest."
By Holly Munks, Alliance News reporter
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