30th Sep 2005 08:00
International Ferro Metals Limited30 September 2005 30 September 2005 INTERNATIONAL FERRO METALS ("IFM" or "the Company") LISTS ON AIM International Ferro Metals Limited (AIM: IFL), the Australian incorporatedmining development company, today announces its admission to AIM, following thesuccessful Placing of 228,571,429 new Ordinary Shares at 35 pence each to raise£80 million. Placing Statistics Placing Price 35pNumber of Placing Shares 228,571,429Total number of Ordinary Shares 410,283,622Percentage of the enlarged share capital subject to the Placing 55.7%Market capitalisation following Admission at the Placing Price £143.6 millionEstimated gross proceeds of the Placing £80 millionEstimated net proceeds of the Placing £75.4 million IFM was established in 2002 to acquire, control and expand the chromite miningand processing operations of the Buffelsfontein mine in the North West Provinceof South Africa. IFM intends to use the proceeds from the placing to constructand bring into production an integrated chromite mine and processing facility toproduce ferrochrome. The IFM Directors expect production to commence 18 monthsafter the start of construction. The principal use of ferrochrome is in the stainless steel industry whichconsumes around 90 per cent of the approximately 6 million tonnes produced on anannual basis. Ferrochrome is added to stainless steel for its corrosion andoxidation resistant properties. Currently, world demand for ferrochrome instainless steel is high and, according to a report by Heinz Pariser is expectedto grow at a rate of 4.4% per annum until 2015. In addition, the CPR shows that IFM's direct operating costs will be in thelowest 10% of international ferrochrome producers. The low operating costs aredue to the integrated nature of the mine and production facility, the use ofproven and modern furnace design and the proximity of good infrastructure. IFM has already secured a market for 64% of its ferrochrome once the plant goesinto production. Jisco, a Chinese state owned steel producer, has entered intoan off-take agreement with IFM, whereby Jisco will purchase 120,000 tonnes perannum ("tpa") of ferrochrome on a take-or-pay basis at a market related price.Jisco will act as an agent for IFM to market ferrochrome in China, Taiwan, Japanand Korea. Jisco has also invested US$34 million in IFM and will be a majorshareholder following admission to AIM. IFM has also entered into an off-take agreement with Commercial Metals Company("Co-metals") which will purchase 50,000 tpa of ferrochrome on a take or paybasis at a market related price. Co-metals, which is listed on the New YorkStock Exchange with a market capitalisation of US$1.6 billion, will also act asexclusive agent to IFM outside of Jisco's agreed territories. The Company is using well regarded principal contractors who have a track recordof constructing similar plants. These contractors have signed lump sum turn-keycontracts at fixed prices and under performance guarantees. IFM was founded by Stephen Turner, who is the Company's Managing Director. Hehas over 15 years experience in the natural resources sector and has beeninvolved in resource projects in Australia, South Africa and Fiji amongstothers. IFM's Executive Chairman is Tony Grey, who has had many years experiencein the natural resources sector as well as significant public companyexperience. Stephen Turner, Managing Director commented: "We are delighted to be listingInternational Ferro Metals on the AIM market. London is now regarded as themining capital of the world and I believe the Company will have an excitingfuture. The demand for ferrochrome is set to grow particularly from countriessuch as China and India where the economies are experiencing double digitgrowth. "We are particularly pleased that Jisco has become a major shareholder and withagreements in place with both Jisco and Co-metals, we already have a strongmarket for our product." The Buffelsfontein mine has, according to the CPR, a 19 year life cycle based ona production rate of 267,400 tpa. SRK has placed a fair market valuation on theProject, as detailed in its report, of £295 million. IFM has also secured an option to acquire all of the issued share capital ofPurity Metals Limited ("Purity"). Purity owns an 80 per cent interest in the SkyChrome chromite property that has a JORC inferred resource of 29.6 milliontonnes and an indicated resource of 28.4 million tonnes, of chromite and issituated 5 kilometres from the Buffelsfontein mine. The exercise of this optioncould enable the production of ferrochrome at the current rate to extend for atleast 20 years beyond the present life of mine. The CPR valuation is confined tothe Buffelsfontein resource leaving additional unrecognised value for the extralife of the plant. Grant Thornton is acting as the Nominated Adviser to the Company. NumisSecurities is acting as brokers and joint financial adviser. -Ends- For further information, please contact: Stephen Turner, Managing DirectorInternational Ferro Metals LimitedMob: 07748245691 Simon RobinsonParkgreen CommunicationsTel: 020 7493 3713Mob: 0788 7985671 Notes to Editors FerrochromeIs a common raw material in stainless steel production. This alloy consists ofiron and up to 72% chromium. Chromite(kr'mt) , dark brown to black mineral. It is an iron-chromium oxide, FeCr 2 O 4,with traces of magnesium and aluminum. Its crystals are octahedral, but rare;it usually occurs as irregular, granular masses in association with igneousrocks, including ophiolites, which are segments of oceanic crust exposed on landby tectonic processes usually associated with plate convergence. Chromitite isan igneous rock composed chiefly of the mineral chromite. The only commercialsource of chromium and its compounds, chromite is used in the manufacture ofrefractory materials. Principal countries producing chromite are South Africa,Zimbabwe, the Philippines, and Turkey. The contents of this announcement, which have been prepared by and are the soleresponsibility of the Company, have been approved by Numis Securities Limited ofCheapside House, 138 Cheapside London EC2V 6LH, solely for the purposes ofsection 21 (2)(b) of the Financial Services and Markets Act 2000. NumisSecurities Limited, which is authorised and regulated in the United Kingdom bythe Financial Services Authority, is advising the Company and no one else inrelation to the Placing and Admission and will not regard any other person asits client in relation to the Placing and Admission and will not be responsibleto any person other than the Company for providing the protections afforded toits clients or for advising any other person in relation to the Placing orAdmission or any transaction or arrangement referred to or information containedin this announcement. This announcement does not constitute, or form part of, an offer or invitationto sell or issue, or any solicitation of an offer to purchase or subscribe forsecurities and any subscription for or purchase of, or application for, sharesin the Company to be issued or sold in connection with the Placing should onlybe made on the basis of information contained in the admission document to beissued in due course in connection with the Placing and Admission and anysupplements thereto. The admission document will contain certain detailedinformation about the Company and its management, as well as financialstatements and other financial data. This announcement does not contain orconstitute an offer of securities for sale in the United States. The securitiesreferred to herein have not been and will not be registered with the USSecurities Act of 1933, as amended, and may not be offered or sold in the UnitedStates absent of registration under that Act or an available exemption from it.This announcement and the information contained herein are not for publication,distribution or release in, or into, the United States, Canada, Australia,Japan, South Africa or the Republic of Ireland. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
IFL.L