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FERRUM CRESCENT LIMITED - Ferrum announces rights offer

Release Date: 09/10/2014 10:56
Code(s): FCR     PDF:  
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Ferrum announces rights offer

FERRUM CRESCENT LIMITED
(Incorporated and registered in Australia
and registered as an external company in
the Republic of South Africa)
(Registration number A.C.N. 097 532 137)
(External company registration number 2011/116305/10)
Share code on the ASX: FCR
Share code on AIM: FCR
Share code on the JSE: FCR ISIN: AU000000WRL8
("Ferrum Crescent" or "the company" or "the group")

Rights Issue for funding of BFS


Ferrum Crescent today announces that it is undertaking a non-renounceable pro rata
rights issue of 2 New Shares for every 3 existing shares in the Company (Shares) held
on the Record Date (see further details below), to raise up to approximately
A$2,029,881 (before costs, and subject to rounding and currency exchange
rates)(Rights Issue).

The Rights Issue is to be partially underwritten by Patersons Securities Limited to the
extent of the first A$860,000, thus ensuring the Company will raise at least that amount
from the Rights Issue (before costs and subject to currency exchange rates).

Funds raised by the Rights Issue will be used to complete key components of the
bankable feasibility study (BFS) underway at the Moonlight iron ore project in Limpopo
Province in northern South Africa (Moonlight Project) and for corporate overheads.

The Directors of the Company consider it to be the correct time to move the BFS
process significantly forward due to the infrastructure upgrade programmes currently
underway in and in support of Limpopo. The BFS objectives are to assess the
economic viability of extracting iron ore from a low stripping ratio, open pit mine to then
be slurried to an existing Transnet rail terminal, where a high-grade pellet can be
produced and shipped. Following completed BFS metallurgical work, it is expected
that the Moonlight Project will produce a pellet product with a 68-70% grade. The
Moonlight Project is favourably positioned in comparison with its peers due to the price
premium high grade iron ore can demand.

The Company will deploy funds from the Rights Issue to complete final costings for
most of the major mining and processing elements. Completion of this phase of work
(detailed below) will allow for final negotiations and planning with major infrastructure
partners (Transnet Rail, Transnet Port and Eskom) and local communities. The
Company (via its local subsidiaries) holds a 30 year mining licence and environmental
approvals for mining at the Moonlight Project.

Further details on the use of funds raised pursuant to the Rights Issue are set out
below under “Use of Funds”.

Rights Issue

New Shares under the Rights Issue will be offered to holders of Shares and depository
interests in the Company with a registered address on the Australian, UK or South
African share registers of the Company on the Record Date in Australia, New Zealand,
the United Kingdom, South Africa, Hong Kong and any other jurisdiction in which the
Ferrum Crescent board determines a Shareholder is not prohibited from participating in
the Rights Issue and is eligible to receive an offer under the Rights Issue without
disclosure, lodgement, registration or filing (Eligible Shareholders).

The Offer Price, Record Date and Closing Date for the Rights Issue for Eligible
Shareholders on the respective share registers of the Company are as follows:

    Share             Offer Price                          Record Date          Closing Date1
    Register

    Australia         A$0.008 per New Share, which         5.00pm (AWST)         5.00pm (AWST)
                      represents a 33.33% discount         on 20 October         on 3 November
                      to the closing price of Shares       2014                  2014
                      on the ASX of A$0.012 on 8October 
                       2014

    UK                0.44 pence per New Share,            5.00pm(GMT)            11.00am (GMT)
                      which represents a 16.2% on          on 20 October          on 31 October 
                      discount to the closing price of     2014                   2014
                      Shares on AIM of 0.525 pence
                      on 8 October 2014

    South Africa      ZAR7.88 per New Share,               5.00pm (SAST)         12.00pm (SAST)
                      which represents a 47.46%            on 20 October         on 3 November
                      discount to the closing price of     2014                   2014
                      Shares on the JSE of                   
                      ZAR15.00 on 7 October 2014
 
1    Unless the offer period is extended

Other key dates of the Rights Issue are set out below under “Key Dates”.

Eligible Shareholders will be entitled to subscribe for 2 New Shares at the Offer Price
for every 3 Shares held on the Record Date with fractional entitlements rounded up to
the nearest whole number of New Shares. Shares held on different registers will not
be aggregated for the purpose of calculating entitlements.

Eligible Shareholders will also be given the opportunity to subscribe for New Shares
not taken up by Eligible Shareholders (Shortfall Shares) over and above their pro rata
entitlement. There is no guarantee that there will be any Shortfall Shares and the
Board reserves the right to issue or not issue Shortfall Shares in its absolute discretion
including applying scale-back to applications for Shortfall Shares.

The Rights Issue is to be partially underwritten by Patersons Securities Limited to the
extent of the first A$860,000, thus ensuring the Company will raise at least that amount
from the Rights Issue (before costs and subject to currency exchange rates). A
summary of the material terms of the Underwriting Agreement, including all termination
events, will be included in the Offer Booklet.

The Rights Issue is non-renounceable which means the right to participate and be
issued New Shares will not be able to be traded on ASX, AIM or JSE or be otherwise
transferable. Shareholders who do not take up all or any part of their entitlements will
not receive any payment or value in respect of those entitlements and their equity
interest in the Company will be diluted.

Further details of the Rights Issue will be set out in the Offer Booklet, which is expected
to be dispatched to Eligible Shareholders on 23 October 2014. The Rights Issue is
being undertaken in accordance with section 708AA of the Corporations Act and,
accordingly, no prospectus is required to be prepared in connection with the Rights
Issue.


For more information regarding the Rights Issue please contact:

Australia enquiries

Ferrum Crescent Limited
Tom Revy T: +61 8 9367 5681
Managing Director
Patersons Securities
Jess Lyon
T: +61 8 9225 2861

UK enquiries:

Ferrum Crescent Limited
Laurence Read (UK representative)
T: +44 7557672432
RFC Ambrian Limited (Nominated Adviser)
James Biddle/Andrew Thomson
T: +44 (0) 20 3440 6800


South Africa enquiries:

Sasfin Capital
Megan Young T: +27 11 809 7500



Key Dates

Rights Issue – Timetable

 Event                                                                               Date

 Announcement of the Rights Issue                                         9 October 2014

 Last date to trade on the JSE                                                 13 October
                                                                                    2014

 Notice to Shareholders to inform them of the Rights Issue and                 14 October
 indicative timetable                                                               2014

 Shares trade on JSE on ‘ex’ entitlement basis                                 14 October
                                                                                   2014

 Shares trade on ASX on ‘ex’ entitlement basis                               16 October
                                                                                  2014

 Record Date for the Rights Issue (5.00pm (AWST) for Eligible
 Shareholders on the Australian Register, 5.00pm (GMT) for Eligible          20 October
 Shareholders on the UK Register, and 5.00pm (SAST) for Eligible                  2014
 Shareholders on the South African Register)

 Rights Issue opens                                                          23 October
                                                                                  2014

 DI CREST Entitlements issued                                                23 October
                                                                                  2014

 Closing Date for the Rights Issue for Eligible Shareholders on the        3 November
 UK Register at 11.00am                                                    2014 (unless
                                                                             extended)

 Closing Date for the Rights Issue (5.00pm (AWST) for Eligible             3 November
 Shareholders on the Australian Register, 12.00pm (SAST) for               2014 (unless
 Eligible Shareholders on the South African Register)                        extended)

 New Shares commence trading on ASX on a deferred settlement                5 November
 basis                                                                            2014

 Notification of shortfall                                                  6 November
                                                                                  2014

 Issue and allotment of New Shares (and dispatch of refund                 10 November
 payments in respect of any unsuccessful applications under the                   2014
 Shortfall Offer)

 Dispatch of holding statements for New Shares trading on ASX              11 November
                                                                                  2014

 Admission to trading of New Shares on AIM and JSE at                      11 November
 commencement of trading                                                          2014

 Normal trading of New Shares on ASX                                       12 November
                                                                                  2014


Note: Dates and times are indicative only and subject to change. The commencement
of quotation of New Shares is subject to confirmation from ASX, LSE and JSE. Ferrum
Crescent reserves the right, subject to the Corporations Act, ASX Listing Rules, AIM
Rules and other applicable laws to vary the dates of the Rights Issue in consultation
with the Lead Manager and Underwriter, including extending the Rights Issue or
accepting late applications, either generally or in particular cases, without notice. You
cannot, in most circumstances, withdraw the application once it has been accepted.
No cooling-off rights apply to the Rights Issue.

Use of Funds

The Rights Issue will raise between approximately A$860,000 (i.e. the minimum
subscription and underwritten amount assuming that the Underwriting Agreement is
executed and not terminated) and A$2,030,000 (assuming that all Entitlements are
taken up) in each case before costs and subject to rounding of Entitlements and
exchange rate variations.

The proceeds of the Rights Issue are planned to be used in accordance with the table
set out below on the basis of either the minimum amount or the maximum amount
being raised. To the extent that an amount is raised between the minimum and the
maximum, the funds will be applied in manner to maximise the progress of the BFS.
                                                        Minimum          Maximum
                                                          Raised            Raised
                                                           $,000             $,000
 Appoint a new Study Manager                                   20              100
 Mineral resource work; defining the variability in ore        30                30
 feed for the first 5-10 years
 Finalise representative sample areas for definitive           20                20
 metallurgical test work (beneficiation and
 pelletising)
 Assay work to confirm understanding of ore                      -               60
 variability (and consequence to the beneficiation
 process)
 Diamond drilling program                                        -              400
 Definitive beneficiation test work program                      -              250
 Corporate social responsibility activities                    70               160
 Corporate overheads (including costs of the rights           650               900
 issue and the costs of attracting new project
 investors)
 Note: These costs include compliance costs being
 listed on ASX, LSE and JSE.
 Contingency                                                   70               110
 Total                                                        860             2,030

Moonlight Project Overview

•   Mining Low stripping ratio, 30 year mining right granted, EIA for mining and
    beneficiation approved
•   Total Mineral Resource (JORC 2012) est. 307Mt at 26.9% Fe, including: 172.1Mt
    Inferred at 25.3% Fe, 83.0Mt Indicated at 27.4% Fe and 52.6Mt Measured at 31.3%
    Fe
•   Market, Duferco SA offtake partner and other potential customers needing high
    grade product to make their low grade material economic in steel production
Resources- JORC (2012)
 Category      Tonne (Mt)             Fe (%)         SiO2 (%)         Al2O3 (%)
 Inferred          172.1              25.3           51.2             4.8
 Indicated         83.0               27.4           50.1             4.0
 Measured          52.6               31.3           47.3             2.5
 Total             307.8              26.9           50.3             4.2

The information in this announcement relating to the reporting of Mineral Resources is
extracted from the announcement entitled “JORC Update – revision for purposes of
Listing Rule 5.8.1” released to ASX on 5 May 2014 and is available on asx.com.au.
The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcement and
that all material assumptions and technical parameters underpinning the estimates of
Mineral Resources in that announcement continue to apply and have not materially
changed. The Company confirms that the form and context in which the competent
person’s findings are presented have not been materially modified from the original
market announcement.

9 October 2014

Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

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