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RNS Number : 0956Z
Ferro-Alloy Resources Limited
16 September 2020
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
16 September 2020
Ferro-Alloy Resources Limited
("Ferro-Alloy" or "the Company")
Financing and Operational Enhancement
Ferro-Alloy Resources Limited (LSE: FAR), the vanadium mining
and processing company with operations based in Southern Kazakhstan
is pleased to announce that it has raised a total of approximately
GBP733,000 (the 'Fundraise'). The Fundraise comprises a direct
subscription for cash into the Company of GBP500,000 and an issue
of the Company's bonds listed on the Astana Stock Exchange in
Kazakhstan totalling $300,114.
The Fundraise
The Company has issued and allotted 6,250,000 ordinary shares of
no par value ('Ordinary Shares') at a price of 8 pence per Ordinary
Share raising a total of GBP500,000 via a direct subscription into
the Company.
In addition, the Company has issued 150 bonds to investors with
a nominal value of US$2,000.76 each on the Astana Stock Exchange in
Kazakhstan totalling US$300,114 (the 'Bonds'). The Bonds are
unsecured and carry an effective interest rate of 7% per annum,
payable twice yearly. The Bonds mature on 17 March 2023 and the
investors have the right to request early repayment by giving 30
days' notice which may be given only between 12 and 13 months after
issue.
Operational enhancement
The proceeds from the Fundraise, together with the GBP500,000
subscribed on 2 September 2020, will be used to further build the
connection to the adjacent high voltage power line, complete the
installation of the equipment to convert ammonium metavanadate
(AMV) to vanadium pentoxide, make several improvements to the
existing process plant and complete the fit-out of the newly built
on-site accommodation for senior technical staff.
The connection to the adjacent high voltage power line is of
major importance to the Company. A significant amount of work has
already been done in spite of delays caused by the Covid-19 state
of emergency. Specifically, the proceeds of the Fundraise will be
sufficient for the completion of the two-kilometre spur line, the
installation of the transformers and automated control, the relay
protection and the high frequency communication systems. The
remaining work, which will be to install the open switchgear and
the low-voltage line from there to the operations, will be
completed in spring of 2021 out of operating earnings.
The new power will be more reliable, have greater capacity, and
is expected to reduce power costs by more than half.
The equipment to convert AMV to vanadium pentoxide will enable
the Company to sell its vanadium without discount from prevailing
prices and will give access to a wider market. The necessary oven
is already on-site and will be installed together with ammonia gas
recovery and recycling equipment. Other expenditure on the plant
includes, principally, improvements to filtration and washing,
which will increase throughput and provide greater purity of
product.
Nick Bridgen, CEO, said: "We have already completed a great deal
of good work towards increasing production from existing operations
but the limited and unreliable power has held us back. The plant
improvements and new converter for the AMV will yield quick
benefits to production and therefore revenue, and we look forward
to even better production upon the completion of the new powerline
in Spring 2021.
"The new power connection is also a step towards the planned
development of the Balasausqandiq project, one of the world's
largest and lowest cost vanadium mines, which will draw power from
the same line."
Settlement, Dealings and Total Voting Rights
Application will be made to the FCA and to the London Stock
Exchange for the 6,250,000 Ordinary Shares, which rank pari passu
with the Company's existing issued ordinary shares, to be admitted
to the standard segment of the Official List of the FCA and to
trading on the London Stock Exchange's Main Market for listed
securities respectively. Dealings are expected to commence from
8.00 a.m. on 22 September 2020 ("Admission").
Following Admission, the Company will have in issue a total of
330,589,052 Ordinary Shares. The Company does not hold any Ordinary
Shares in treasury. Therefore, following Admission, the total
number of voting rights in the Company will be 330,589,052 which
may be used by shareholders or other persons as the denominator for
the calculations by which they will determine if they are required
to notify their interest in, or a change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
For further information, visit www.ferro-alloy.com or
contact:
Ferro-Alloy Resources Limited
Nick Bridgen, Chief Executive Officer info@ferro-alloy.com
Shore Capital (Broker)
Corporate Advisory: Toby Gibbs / Mark Percy / John More Tel: +44 (0)207 408 4090
Corporate Broking: Jerry Keen
VSA Capital (Financial Adviser) Tel: +44 (0)203 005 5000
Andrew Monk / Simon Barton
St Brides Partners Limited (Financial PR & IR Adviser)
Catherine Leftley / Megan Dennison Tel: +44 (0)207 236 1177
Further information about Ferro-Alloy Resources Limited
The Company's operations are all located at the Balasausqandiq
Deposit in Kyzylordinskaya Oblast in the South of Kazakhstan.
Currently the Company has two main business activities:
a) the high grade Balasausqandiq Vanadium Project (the "Project"); and
b) an existing vanadium concentrate processing operation (the "Existing Operation")
Balasausqandiq is a very large deposit, with vanadium as the
principal product, together with by-products of carbon, molybdenum,
uranium, rare earth metals, potassium, and aluminium. Owing to the
nature of the ore, the capital and operating costs of development
are very much lower than for other vanadium projects.
A reserve on the JORC 2012 basis has been estimated only for the
first ore-body (of five) which amounts to 23 million tonnes, not
including the small amounts of near-surface oxidised material which
is in the Inferred resource category. In the system of reserve
estimation used in Kazakhstan the reserves are estimated to be over
70m tonnes in ore-bodies 1 to 5 but this does not include the full
depth of ore-bodies 2-5.
The existing production facilities were originally created from
a 15,000 tonnes per year pilot plant which was then adapted to
treat low-grade concentrates and is now in the process of being
expanded and further adapted to treat a wider variety of raw
materials.
The Company has already completed the first steps of a
development plan for the existing operation which is expected to
result in annualised production capacity increasing gradually to
around 1,500 tonnes of contained vanadium pentoxide. The
development plan includes upgrades to infrastructure, an extension
to the existing factory and the installation of equipment to
increase the throughput and to add the facilities to convert AMV
into vanadium pentoxide and then to ferro-vanadium.
The strategy of the Company is to develop both the project and
the Existing Operation in parallel. Although they are located on
the same site and use some of the same infrastructure, they are
separate operations.
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