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FERRUM CRESCENT LIMITED - Quarterly Activities and Cashflow Report for the period ending 30 September 2015

Release Date: 30/10/2015 08:15
Code(s): FCR     PDF:  
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Quarterly Activities and Cashflow Report for the period ending 30 September 2015

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
Australian ISIN: AU000000WRL8
South African ISIN: AU000000FCR2
("Ferrum Crescent", the "Company", the “Group”)(ASX: FCR, AIM: FCR, JSE: FCR)

30 October 2015
                                Ferrum Crescent Limited
       ("Ferrum Crescent", the "Company" or the "Group")(ASX: FCR, AIM: FCR, JSE: FCR)

                          Quarterly Activities and Cashflow Report
                          For the period ended 30 September 2015

Highlights

Moonlight Iron Project Bankable Feasibility Study (“BFS”):
   -    The Moonlight Iron Project (“Moonlight” or “Project”) involves the proposed future
        mining and beneficiation of the Moonlight Deposit in Limpopo Province, northern
        South Africa for the production of a premium iron product for sale in South Africa
        and potentially internationally
   -    Planning activities ongoing with infrastructure suppliers (power, water, rail and port)
   -    Project on schedule to benefit from new regional/national infrastructure
        developments
   -    Recent farm-in and joint venture agreement (detailed below) will result in the
        resumption of full BFS activities
   -    Planned next BFS phases:
            o Full JORC (2012) compliant Ore Reserve to be established - Infill drilling over
               Zones A, B and C for advanced mine design work and metallurgical analysis
            o The success of such infill drilling will determine whether bulk sampling is
               necessary
            o Final beneficiation and pelletiser designs/costings to be completed
            o In the final phase, negotiations and agreements to be concluded with
               infrastructure providers
   -    Cash balance at the end of the quarter: AU$587,000

 Post Quarter End:
   -    On 14 October 2015, the Company announced that the group had entered into a
        legally binding farm-in and joint venture agreement (the “Agreement”) with Business
        Venture Investments No. 1709 (Proprietary) Limited (“BVI”) to form a joint venture
        for the completion of the BFS for the Project
    -   Under the terms of the Agreement, in return for fully funding and completing the
        BFS across two phases (BFS Phase 1 and BFS Phase 2), BVI will earn up to a 43%
        equity interest in Ferrum Iron Ore (Pty) Limited (“FIO”), the Group subsidiary that
        holds the Project
    -   BVI is a sister company of South African BEE investment house Ovation Capital. It is a
        BEE controlled South African company with mining and processing interests in South
        Africa. ‘BEE’ is the term used within South Africa to describe entities that meet
        relevant regulatory criteria as being controlled by historically disadvantaged South
        Africans
    -   Memorandum of understanding with Principle Monarchy Investments (Proprietary)
        Limited formally terminated


Commenting today Tom Revy, Managing Director, said:
“We now have a fully committed and legally binding agreement in place for completion of
the Moonlight Project BFS. I look forward to working with our new partners, BVI, on the
development of the Project. The BFS Phase 1 activities should recommence by the end of
2015 and I look forward to reporting on a regular basis as to the status of the Project as the
various planned key BFS milestones are progressed.
“BVI, a sister company of Ovation Capital, will earn up to a 43% equity interest in Moonlight
- through funding and completing all the requisite workstreams to produce a full BFS to a
fixed timeline. We continue to align the Project with the infrastructure plans of the South
African and Limpopo governments and seek to address the aspirations and interests of such
authorities and those of the local communities and municipalities. Our aim continues to be
the maximisation of the value of Moonlight for the benefit of all stakeholders.”


For further information on the Company, please visit www.ferrumcrescent.com or contact:

 Australia enquiries:                        UK enquiries:
 Ferrum Crescent Limited                     Ferrum Crescent Limited
 Tom Revy T: +61 8 9474 2995                 Laurence Read (UK representative)
 Managing Director                           T: +44 7557672432
                                             Strand Hanson Limited (Nominated Adviser)
                                             Rory Murphy/Matthew Chandler
                                             T: +44 20 7409 3494
                                             Beaufort Securities Limited (Broker)
                                             Jon Belliss/Elliott Hance
                                             T: +44 20 7382 8300

 South Africa enquiries:                     Bravura Capital (Pty) Ltd (JSE Sponsor)
                                             Doné Hattingh
                                             T (direct): +27 11 459 5037



APPENDIX 5B:

http://www.ferrumcrescent.com/IRM/Company/ShowPage.aspx/PDFs/1778-
10000000/SeptemberQuarterCashflowReport

Notes to Editors:
Ferrum Crescent’s principal project is the Moonlight Iron Project located in Limpopo Province in the
north of South Africa. The Moonlight Deposit (upon which the Project is based) is a magnetite
deposit located on the Moonlight, Gouda Fontein and Julietta farms and is the main operational
focus for the Company. Iscor Limited (“Iscor”), which explored the Project in the 1980s and '90s,
reported mineralisation capable of producing a concentrate grading at 68.7% iron. At that time, Iscor
concluded that the deposit, which was described as being comparable to the world’s best, was easily
mineable due to its low waste-to-ore ratio. The beneficiation attributes of Moonlight ore are
extremely impressive, with low-intensity magnetic separation considered suitable for optimum
concentration.

Metallurgical tests on Moonlight material, undertaken since then by Ferrum Crescent, suggest that
Iscor’s historical results are conservative, that good metal recoveries can be achieved, and that the
resulting concentrates have a high iron content and only negligible impurities, at grind sizes
considered to be industry standard (P80 of 75 - 125 microns).

Key features of the Project to date are:

    - JORC (2012) compliant Mineral Resource;

    - Historical drilling, drilling by the Group, geological modelling and a high density geophysical
      survey conducted by the Company confirm tonnage upside potential;

    - 30 year Mining Right granted;

    - Environmental licence (EIA) in place for the Moonlight mining area (approved 4 April 2013);

    - Metallurgical test work indicates the potential for high quality concentrate and/or pellets
      with in excess of 69% iron content and low deleterious elements (DR grade pellets for use in
      direct reduction iron/electric arc steel-making processes);

    - The quality of product that can potentially be produced at Moonlight is a clear differentiator
      against its industry peers, as is the access to infrastructure (port, power and rail);

    - Duferco offtake partner (4.5 Mtpa plus first right on a further 1.5 Mtpa if not sold
      domestically). South Africa currently has a growing demand for high grade iron concentrate
      and/or pellets for its steel industry;

    - Independent valuation by The Mineral Corporation completed in June 2014 - this valuation
      served as the basis for the recent BVI (Ovation Capital) transaction;

    - BEE compliant South African investment company (BVI) will provide a completed BFS to the
      Group by 2017/18 at no expense to the Group in return for a 39-43% equity position in the
      Project;

    - Located near Kumba railhead at Thabazimbi (Kumba operation depleting in grade), Limpopo
      Province, northern South Africa;

    - New Eskom power plant (4,800MW) commissioning first 800MW module;

    - Richards Bay port expansion for iron ore products;

    - Local community, Ga-Seleka, has an effective 3% carried interest in the Project.

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