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Fundraising and Notice of General Meeting
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
25 February 2016
Fundraising and Notice of General Meeting
Ferrum Crescent, the ASX, AIM and JSE quoted metals project developer,
announces that it has received applications to subscribe for 149,681,797 new
ordinary shares of no par value each in the capital of Ferrum Crescent (the
“Subscription Shares”) at a price of £0.0012 per Subscription Share, to raise
£179,618 before expenses (the “Subscription”). The Subscription was
oversubscribed and closed on Wednesday, 24 February 2016. The Subscription
Shares will represent approximately 19.36 per cent. of the Company’s enlarged
issued share capital and the Subscription is conditional on admission of the
Subscription Shares to trading on AIM (“Admission”).
Application will be made for quotation of the Subscription Shares on the Australian
Securities Exchange and the JSE Limited, and to the London Stock Exchange plc for
Admission. It is expected that Admission of the Subscription Shares will become
effective and that dealings in the Subscription Shares will commence on AIM at 8.00
a.m. on 1 March 2016. The Subscription Shares will be fully paid and will rank pari
passu in all respects with the Company’s existing ordinary shares. Following
Admission, the total issued ordinary share capital of the Company will comprise
772,985,191 ordinary shares.
Pursuant to the Subscription, Grassroots Exploration Pty Limited (“Grassroots
Exploration”) (a company controlled by Mr Alan Jenks), is investing approximately
£5,300 for 4,416,667 new ordinary shares. This additional investment will result in
Grassroots Exploration being interested, in aggregate, in 92,987,053 ordinary
shares, representing approximately 12.03 per cent. of the Company’s enlarged
issued ordinary share capital.
By virtue of Grassroots Exploration being an existing substantial shareholder in the
Company, its participation in the Subscription is considered to be a related party
transaction for the purposes of Rule 13 of the AIM Rules for Companies.
Accordingly, the directors of Ferrum Crescent consider, having consulted with Strand
Hanson Limited (the Company’s Nominated Adviser), that the terms of Grassroots
Exploration’s participation in the Subscription are fair and reasonable insofar as the
Company’s shareholders are concerned.
Use of Proceeds and Update re Option to Acquire Interests in Lead-Zinc
Exploration Projects in Spain
The Company intends to use the net proceeds from the Subscription for its general
working capital purposes and to maintain its option to potentially acquire 100 per
cent. of GoldQuest Iberica, S.L. (“GoldQuest”), details of which were announced on
16 February 2016 (the “Option”). GoldQuest, a private company incorporated in
Spain, owns 100 per cent. of two lead-zinc exploration projects in the provinces of
Leon and Galicia, in historic Spanish mining areas (the “Iberian Projects”). In order to
maintain the Company’s exclusive Option, valid until 31 July 2016, it is required to
make two cash payments to TH Crestgate GmbH (each of £7,500) in March and
April 2016, whilst the Company conducts its due diligence on GoldQuest and the
Iberian Projects.
With the initial staged option fee payment now having been settled in part shares
and part cash, and the oversubscribed Subscription to be completed utilising the
Company’s existing share capital authorities, the Company will shortly seek
shareholder approval for an increase in its share capital authorities to enable it to,
inter alia, be able to satisfy the cash and share consideration payable on the
potential exercise of the abovementioned Option and raise additional funds for
general working capital purposes, including a potential structured work programme
across the Iberian Projects with the objective of establishing a maiden JORC Code
compliant resource estimate at both projects, the rapid establishment of metallurgical
characteristics and a viable metals separation and processing profile.
Notice of General Meeting
A general meeting of shareholders of Ferrum Crescent will be held at 11.00 a.m.
(Perth time) on 6 April 2016 at The Hovia Room, Metro Hotel Perth, 61 Canning
Highway, South Perth, Western Australia 6151, for the purpose of considering and, if
thought fit, passing resolutions covering the following matters:
1. Ratification of the issue of 88,303,061 shares that have been issued as part of
the Subscription referred to above, in order to restore the Company’s placement
capacity that is accorded it under ASX Listing Rule 7.1;
2. Shareholder approval to issue up to a further 500,000,000 shares to investors at
an issue price (to be calculated by reference to market price) for working capital
purposes and the potential exercise of the Company’s option to acquire
GoldQuest and conduct exploration activities in relation to the Iberian Projects;
3. Shareholder approval to issue a further 100,000,000 shares in the event that the
Company exercises its option to acquire GoldQuest; and
4. Shareholder approval for Mr Tom Revy (the Company’s Managing Director) to
participate in the proposed private placing referred to in point 2 above.
The formal notice of the general meeting will be dispatched to shareholders in due
course.
Commenting today Tom Revy, Managing Director of Ferrum Crescent, said:
“With our Moonlight Project in South Africa subject to the current BFS funding
arrangement with Business Venture Investments No. 1709 (Proprietary) Limited, a
sister company of Ovation Capital, we are now focusing on our due diligence
exercise in respect of GoldQuest and its two highly prospective lead-zinc assets in
Spain.
“I am extremely pleased by the response from investors to the Subscription which, I
believe, reflects, amongst other things, the inherent quality of GoldQuest’s lead zinc-
assets located in a politically stable region. The Subscription price of 0.12p was
settled on Monday 22 February 2016 against the Company’s then prevailing closing
middle-market price of 0.16p per share and we welcome the continued support and
interest of our investor base in the Company’s activities.
“Following the potential exercise of its Option in due course, Ferrum Crescent can
seek to rapidly exploit the significant pre-existing data available and define maiden
JORC Code compliant resource estimates for the Toral and Lago Projects and
conduct process testing work. Low cost resource delineation and metallurgy work
should then enable us to advance the exploration projects within a short space of
time.
“In the longer term, we are particularly interested by the size of the Toral Project
following our own, internal, assessment of the mineralisation to date and believe that
its significance may well have previously been overlooked. We are now convening a
general meeting to request shareholders to grant us the requisite authorities to be in
a position to be able to exercise the Option and then move forward with a planned
highly structured work programme on the Iberian Projects to deliver on clearly
defined, value accretive, objectives.”
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/Elliot Hance
T: +44 20 7382 8300
South Africa enquiries: Bravura Capital (Pty) Ltd (JSE Sponsor)
Doné Hattingh
T (direct): +27 11 459 5037
Notes to Editors:
Further Information on GoldQuest and the Iberian Projects
GoldQuest is a private company incorporated in Spain which owns 100 per cent. of both the Toral
Project and the Lago Project in northern Spain, each having high prospectivity for lead and zinc.
Principal Terms of the Option
- Option to potentially acquire 100 per cent. of GoldQuest. GoldQuest owns 100 per cent. of two
lead-zinc exploration projects in the provinces of Le?n and Galicia, in historic Spanish mining
areas.
- Up to £22,500 staged option fee, in part shares and part cash, to be paid by Ferrum Crescent in
return for an exclusive option, valid until 31 July 2016, to enable the Company to conduct due
diligence on GoldQuest and the Iberian Projects. If exercised, Ferrum Crescent, will be required
to:
- pay up to approximately £320,000 in cash consideration (calculated as a fixed amount of
£250,000 plus a further cash payment comprising the lesser of 50 per cent. of GoldQuest’s
current liabilities and £92,500, minus the abovementioned option consideration); and
- issue, credited as fully paid, 100 million new ordinary shares in the capital of Ferrum
Crescent.
Toral Project
The Toral Project has been extensively explored historically by its previous owners Portex Minerals Inc.
and Lundin Mining S.L. and the 2,024ha of mineral rights contains extensive high grade zinc
mineralisation. Located in north-west Spain, approximately 400km north-west of Madrid, the project’s
licence area hosts excellent road, rail and power infrastructure and is situated in a known historic mining
jurisdiction. The asset also has a pre-existing NI 43-101 resource estimate reported by Micon
International Co. Limited on 30 April 2012.
Lago Project
The Lago Project is located approximately 54km to the north-east of the Toral Project. Historical
investigations completed by or on behalf of the Spanish mining firm, Exploracion Minera International
Espana S.A. (“EXMINESA”), between 1985 and 1990, indicated that mineralisation at the Lago
Project may be similar to that encountered at the Toral Project with vertical, lenticular bodies
(probably more than one) approximately 800m long by 300m wide.
Further Information on the Moonlight Project, South Africa
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 Moonlight 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 Moonlight 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 Moonlight 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 in 2012 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 in
excess of 69% iron with 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 over 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 on the Moonlight Project completed in
June 2014;
- BEE compliant South African investment company (BVI) will provide a completed BFS to the
Group by 2018/19 at no expense to the Group in return for a 39-43% equity position in the
Moonlight 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 potential export of future iron ore products; and
- Local community, Ga-Seleka, has an effective 3% carried interest in the Moonlight Project.
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