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Ironveld PLC (IRON)

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Thursday 28 March, 2019

Ironveld PLC

Interim results for the 6 months ended 31 Dec 2018

RNS Number : 2473U
Ironveld PLC
28 March 2019
 

                                                                                               

 

28 March 2019                                                                                     

 

IRONVELD PLC

("Ironveld" or the "Company")

 

Interim results for the six months ended 31 December 2018

 

Ironveld plc, the owner of a High Purity Iron ("HPI"), Vanadium and Titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province, South Africa (the "Project") is pleased to announce its interim results for the six months ended 31 December 2018 ("the period").

 

Highlights

 

Operational and Financial

·     Commenced a bulk sampling programme with a potential off-take partner, supplying sufficient tonnage to undertake a full kiln smelting test

·   Successfully completed a placing in November 2018, raising £400,000 with the proceeds used to purchase equipment to process the Company's magnetite ore in line with the specifications of the potential off-take partner

·    Received a number of enquiries from potential industrial partners, who have carried out extensive due diligence

 

Post Period

·     The potential off-taker concluded its metallurgical tests as part of the bulk sampling programme

·     Discussions with the potential off-taker regarding the terms of the off-take agreement continue

·   Successfully completed a placing in February 2019 of £1.1 million to strengthen the Company's financial position

·     The Company remains in detailed discussions with two potential industrial partners

 

 

 

Peter Cox, CEO, said:

"The Company has made significant progress towards securing a long term off-take agreement and is encouraged by the status of current discussions and the interest from potential development partners. We have a vast resource of High Purity Iron, Vanadium and Titanium in situ at the project, all three of which have strong demand markets, and we are hopeful that we can capitalise on the increasing demand for these high value materials through a commercial agreement.

 

"We thank our shareholders for their continued support and look forward to providing further updates as we make continued progress."

 

 

 

 

 

 

For further information, please contact:

 

Ironveld plc

Peter Cox, Chief Executive

c/o Camarco

020 3757 4980

 

Shore Capital

Jerry Keen / Toby Gibbs

 

020 7408 4090

 

 

 

Camarco

Gordon Poole / Kimberley Taylor / Thayson Pinedo

020 3757 4997

 

 

Notes to Editors:

 

Ironveld (IRON.LN) is the owner of a High Purity Iron (HPI), Vanadium and Titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province South Africa. Ironveld expects to mine its own VTM ore as feedstock for a 7.5 MW DC smelter which will produce speciality iron products including high purity iron powder as well as vanadium and titanium slag products.

 

The Definitive Feasibility Study published in April 2014 confirms the project's viability to deliver an exceptionally high-grade iron product (99.5% Fe) called High Purity Iron which commands a premium in the market place. Vanadium and Titanium slag containing commercial grades of vanadium and titanium will also be produced and sold.

 

Ironveld's Board includes; Giles Clarke as Chairman, Peter Cox as CEO, Vred von Ketelhodt as CFO, Nick Harrison, Rupert Fraser and Duncan George Harvey as a Non-Executive Directors.

 

Ironveld is an AIM traded company. For further information on Ironveld please refer to www.ironveld.com.

 

 

Chairman's Statement:

 

During the period, the Company has made a number of significant advancements towards its aim of becoming a production-led mining company. Substantial progress is expected over the coming months as we remain confident of securing a commercial off-take agreement and remain in discussions with potential industrial partners.

 

In September 2018, after a period of engagement, Ironveld commenced a bulk sampling programme with a potential off-take partner, who is a specialist subsidiary of an international steel group. The programme saw us supplying the potential off-take partner with an initial delivery of 7,000 tons of mine ore for processing, enabling the potential off-taker to undertake a full kiln smelting test.

 

The potential off-take partner has now completed metallurgical tests on the sample and discussions are progressing, with the aim of concluding a commercial offtake agreement. Finalising a long-term agreement would support the Company by generating significant revenue as Ironveld begins to monetise its vast resource and take advantage of the growing demand for vanadium and existing stable demand for HPI and Titanium.

 

Whilst substantially all of the operating costs for the sampling were covered by payment for the ore, the programme also had the benefit of raising the profile of the Project, which led to enquiries from a number of potential industrial partners, all of whom carried out extensive due diligence. The Company remains in discussions with these potential industrial partners and is hoping to conclude an agreement which would allow it to commence operations.

 

The Company's Project holds 27 million tons of HPI and 1.4 billion pounds of Vanadium (V2O5) in situ. The fundamentals driving vanadium pricing continue to be supportive as the global annual demand continues to grow, partly driven by increasing Chinese demand and the advancements in technology for vanadium redox batteries.

The demand for HPI, as a water atomized powder, continues to increase as it is commonly used in the automotive industry, powder metallurgy and magnetic materials. Titanium slag is a key element in the development of new battery technology and is widely utilized in the steel, alloy and pigment industries.

We would like to thank our shareholders for their ongoing support, which has enabled us to successfully raise £400,000 through a placing during the period, and a further £1.1 million post-period end. These proceeds have been used to fund the purchase of a secondary gyratory crusher and magnetic separation equipment used to process the Company's magnetite ore and also to strengthen the Company's financial position.

We aim to operate in a responsible manner and continue to work closely with stakeholders in the Project area to improve standards of living. We remain committed to our Keep a Young Girl in School Program, which provides hygiene support to approximately 600 female students at schools in the local area in together with our partners, the Imbumba Foundation and the Nelson Mandela Foundation. In conjunction with the Imbumba Foundation, we are working to introduce a support programme to encourage academic excellence amongst male students in the Project area.

Financial
The Group recorded a loss before tax of £254,000 (H1 2018: £243,000) and cash balances of £322,000 (30 June 2018: £517,000) at the end of the period. The Company does not plan to pay a dividend for the six months ended 31 December 2018.

 

 

 

Going concern

Following the recent share placing, the Group's present financial resources and existing facilities are only considered adequate to meet committed overhead expenditure for the period to November 2019 by which time, the Directors anticipate completing the further funding of the Project (the High Purity Iron, Vanadium and Titanium project located on the Northern Limb of the Bushveld Complex in Limpopo Province, South Africa owned by the Group). The Directors are presently fully engaged with potential industrial and commercial partners to raise the additional finance which will allow them to commit to the next phase of the Project.

 

The Directors are confident that sufficient funds can be raised for this planned activity and therefore have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future, being twelve months from the date of the approval of these interim financial statements. The Group is committed to developing the Project and is actively engaged in raising the appropriate finance to allow the development to proceed. For this reason, the Board continues to adopt the going concern basis in the preparation of the financial statements.

 

Outlook
The Company continues to hold discussions with the potential off-take partner and other potential industrial partners, with the intention of either concluding an agreement with one of the parties involved or completing an off-take arrangement with a third party.

 

The long-term strategic focus of the Company remains to become a production led mining company as we look to monetise our vast HPI, Vanadium and Titanium resources.

 

We would like to thank all of our shareholders for their continuing support for both the Company and the Project and we look forward to providing further updates in the near future.

 

 

Giles Clarke

Chairman

27 March 2019

 

 

 

IRONVELD PLC

 

CONSOLIDATED INCOME STATEMENT

 

FOR THE PERIOD ENDED 31 DECEMBER 2018

 

                                        

6 Months

 

6 Months

 

12 Months

 

ended

 

ended

 

ended

 

31.12.18

 

31.12.17

 

30.06.18

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Administrative expenses

(257)

 

(236)

 

(570)

Operating loss

(257)

 

(236)

 

(570)

 

 

 

 

 

 

Investment revenues

3

 

3

 

41

Finance costs

-

 

(10)

 

(7)

Loss before taxation

(254)

 

(243)

 

(536)

 

 

 

 

 

 

Taxation

-

 

-

 

-

Loss for the period

(254)

 

(243)

 

(536)

 

 

 

 

 

 

Attributable to owners of the company

(254)

 

(243)

 

(535)

Non-controlling interests

-

 

-

 

(1)

 

(254)

 

(243)

 

(536)

 

 

 

 

 

 

Profit/(loss) per share (pence)

 

 

 

 

 

 

 

 

 

 

 

Basic

(0.04p)

 

(0.05p)

 

(0.10p)

Diluted

n/a

 

n/a

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of these financial statements.

 

 

 

 

 

IRONVELD PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

FOR THE PERIOD ENDED 31 DECEMBER 2018

 

                                                                                                                                                

 

6 Months

 

6 Months

 

12 Months

 

ended

 

ended

 

ended

 

31.12.18

 

31.12.17

 

30.06.18

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Loss for the period

(254)

 

(243)

 

(536)

 

 

 

 

 

 

Exchange differences on the translation of foreign operations

(335)

 

211

 

(1,505)

Total comprehensive income/(loss) for the period

(589)

 

(32)

 

(2,041)

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Owners of the company

(539)

 

(108)

 

(1,805)

Non-controlling interest

(50)

 

76

 

(236)

 

(589)

 

(32)

 

(2,041)

 

 

 

 

 

 

The accompanying notes for an integral part of these financial statements.

 

 

IRONVELD PLC

 

CONSOLIDATED BALANCE SHEET

 

AS AT 31 DECEMBER 2018

 

 

As at

 

 

As at

 

31.12.18

 

 

30.06.18

 

£'000

 

 

£'000

Non-current assets

 

 

 

 

Exploration and evaluation

26,340

 

 

26,218

Property, plant and equipment

4

 

 

4

Investments - Other

381

 

 

386

 

26,725

 

 

26,608

Current assets

 

 

 

 

Trade and other receivables

70

 

 

177

Cash and bank balances

322

 

 

517

 

392

 

 

694

 

 

 

 

 

Total assets

27,117

 

 

27,302

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

(505)

 

 

(413)

Borrowings

-

 

 

-

 

(505)

 

 

(413)

Non-current liabilities

 

 

 

 

Deferred tax liabilities

(5,125)

 

 

(5,194)

 

 

 

 

 

Total liabilities

(5,630)

 

 

(5,607)

 

 

 

 

 

Net assets

21,487

 

 

21,695

 

 

 

 

 

Equity

 

 

 

 

Share capital

9,146

 

 

8,903

Share premium

19,294

 

 

19,161

Retained earnings reserve

(10,590)

 

 

(10,056)

 

 

 

 

 

Equity attributable to owners of the company

17,850

 

 

18,008

Non-controlling interests

3,637

 

 

3,687

 

 

 

 

 

Total equity

21,487

 

 

21,695

 

 

 

 

 

The accompanying notes form an integral part of these financial statements.

 

IRONVELD PLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

FOR THE PERIOD ENDED 31 DECEMBER 2018

 

 

 

 

Share capital

 

Share premium

 

Retained earnings

 

Attributable to the owners of the company

 

Non-controlling interests

 

Total equity

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 July 2017

7,671

 

18,211

 

(8,282)

 

17,600

 

3,923

 

21,523

Total comprehensive income for the year

-

 

-

 

(1,805)

 

(1,805)

 

(236)

 

(2,041)

Issue of share capital

1,232

 

950

 

-

 

2,182

 

-

 

2,182

Equity settled share based payments

-

 

-

 

31

 

31

 

-

 

31

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June 2018

8,903

 

19,161

 

(10,056)

 

18,008

 

3,687

 

21,695

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

 

-

 

(539)

 

(539)

 

(50)

 

(589)

Equity settled share based payments

-

 

-

 

5

 

5

 

-

 

5

Issue of share capital

243

 

133

 

-

 

376

 

-

 

376

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 31 December 2018

9,146

 

19,294

 

(10,590)

 

17,850

 

3,637

 

21,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                         

         The accompanying notes for an integral part of these financial statements.

 

IRONVELD PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD ENDED 31 DECEMBER 2018

 

 

6 Months

 

6 Months

 

12 Months

 

Ended  

 

Ended 

 

Ended 

 

31.12.18

 

31.12.17

 

30.06.18

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Net cash from operating activities

(51)

 

(178)

 

(362)

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Interest received

3

 

2

 

41

Purchase of exploration and evaluation assets

(712)

 

(454)

 

(1,263)

Contribution to exploration and evaluation assets

243

 

-

 

-

Purchases of property, plant and equipment

(2)

 

-

 

(1)

Purchase of investments

-

 

-

 

(386)

Net cash used in investing activities

(468)

 

(452)

 

(1,609)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

Repayment of borrowings

-

 

(861)

 

(889)

Proceeds on issue of equity (net of costs)

376

 

2,182

 

2,632

 

 

 

 

 

 

Net cash generated in financing activities

376

 

1,321

 

1,743

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

(143)

 

691

 

(228)

 

 

 

 

 

 

Cash and cash equivalents at the start of the period

517

 

788

 

788

Effect of foreign exchange rates

(52)

 

(49)

 

(43)

 

 

 

 

 

 

Cash and cash equivalents at end of period

322

 

1,430

 

517

 

 

 

 

 

 

Note to the cash flow statement

 

 

 

 

 

Operating loss

(257)

 

(236)

 

(570)

Depreciation on property, plant and equipment

2

 

1

 

2

Share based payment expense

-

 

21

 

-

 

 

 

 

 

 

Operating cash flows before movements in working capital

(255)

 

(214)

 

(568)

Movement in receivables

106

 

134

 

138

Movement in payables

98

 

(92)

 

75

 

 

 

 

 

 

Cash used in operations

(51)

 

(172)

 

(355)

Interest paid

-

 

(10)

 

(7)

Taxation

-

 

4

 

-

 

 

 

 

 

 

Net cash from operating activities

(51)

 

(178)

 

(362)

 

 

 

 

 

 

The accompanying notes form an integral part of these financial statements.

 

IRONVELD PLC

 

NOTES TO THE FINANCIAL STATEMENTS

 

FOR THE PERIOD ENDED 31 DECEMBER 2018

 

 

1       Basis of preparation and accounting policies

 

The results for the six months to 31 December 2018 have been prepared under International Financial Reporting Standards (IFRS) as adopted by the EU and International Accounting Standards Board.

 

The accounting policies are consistent with those of the annual financial statements for the year ended 30 June 2018, as described in those financial statements.

 

The financial information does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. Full accounts of the company for the year ended 30 June 2018 on which the Auditors gave an unqualified report, have been delivered to the Registrar of Companies.

 

 

2       Loss per share

 

The calculation of basic and diluted loss per share is based upon the loss for the period and the weighted average number of ordinary shares in issue during the period.

                                                                                            

6 Months

 

6 Months

 

12 Months

 

to 31.12.18

 

to 31.12.17

 

to 30.06.18

 

'000

 

'000

 

'000

 

 

 

 

 

 

Weighted average number of shares

571,580

 

491,765

 

529,515

Options - dilution

-

 

-

 

-

 

571,580

 

491,765

 

529,515

 

 

 

 

 

 

 

Pence 

 

Pence 

 

Pence 

 

 

 

 

 

 

Basic loss per share - continuing

(0.04)

 

(0.05)

 

(0.10)

Basic profit/(loss) per share - discontinued

n/a

 

n/a

 

n/a

 

 

 

 

 

 

Discontinued - Diluted earnings per share

n/a

 

n/a

 

n/a

 

 

Where the Group reports a loss for any period, then in accordance with IAS 33, the share options and warrants in issue are not considered dilutive.

 

 

3       Registered office and copies of the report

 

The registered office is Ironveld plc, Lakeside Fountain Lane, St Mellons, Cardiff, CF3 0FB and copies of this report are available from the registered office.

 

 

 

 

INDEPENDENT REVIEW REPORT

 

UHY Hacker Young Manchester LLP

St. James Building

79 Oxford Street

Manchester M1 6HT

                                                                                       

TO IRONVELD PLC

 

 

Introduction

 

We have reviewed the accompanying balance sheet of Ironveld plc as at 31 December 2018 and the related statements of income, changes in equity, cash flows for the six month period then ended and other explanatory notes 1 to 3. Management is responsible for the preparation and fair presentation of this interim financial information in accordance with the International Financial Reporting Standards. Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of interim Financial Information Performed by the Independent Auditor of the Entity".  A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information does not give a true and fair view of the financial position of the entity as at 31 December 2018, and of its financial performance and its cash flows for the six month period then ended in accordance with International Financial Reporting Standards as applicable in the United Kingdom.

 

In forming our opinion on the financial information, which is not modified, we have considered the adequacy of the disclosures made in the Chairman's statement concerning the Group's ability to continue as a going concern. The Group are currently negotiating with potential industrial and commercial partners in order to finance the additional planned activity and this indicates the existence of a material uncertainty which may cast significant doubt about the Group's ability to continue as a going concern. The financial information does not include the adjustments that would result if the Group were unable to continue as a going concern and the directors remain confident that the negotiations will be successful and that suitable finance will be arranged.

 

 

 

 

UHY Hacker Young Manchester LLP

Chartered Accountants

 

 

27 March 2019

 

 

 

 

IRONVELD PLC

 

OFFICERS, ADVISORS AND AGENTS

 

 

Directors:                         Giles Clarke                        (Chairman)                                                  
                                          Peter Cox                           (Chief Executive Officer)

                                          Vred von Ketelhodt             (Chief Financial Officer)

                                          John Harrison                     (Non-Executive Director)

                                          Rupert Fraser                     (Non-Executive Director)

                                          Duncan George Harvey      (Non-Executive Director)

 

Secretary:                        Kirsti Jane Pinnell                                                                                 

 

Company Number:          04095614

 

Registered Office:           Ironveld Plc

                                          Lakeside Fountain Lane

                                          St Mellons

                                          Cardiff

                                          CF3 0FB

 

Nominated Advisor         Shore Capital Stockbrokers Limited

And Broker:                     Bond Street House

                                          14 Clifford Street

                                          London

                                          W1S 4JU

 

Solicitors:                        Kuit Steinart Levy LLP

                                          3 St Marys Parsonage

                                          Manchester

                                          M3 2RD

 

Auditors:                          UHY Hacker Young Manchester LLP

Chartered Accountants

St James Building

79 Oxford Street

Manchester M1 6HT

 

Bankers:                          HSBC

                                         97 Bute Street

                                         Cardiff

                                         CF10 5NA

 

Registrars:                      Capita IRG Plc

                                         Northern House

                                         Woodsome Park

                                         Fenay Bridge

                                         Huddersfield

                                         HD8 0LA

 

 


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