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Ironveld plc

Placing to raise £2.0 million

Notice of General Meeting

Ironveld plc ("Ironveld" or the "Company"), the AIM quoted mining development company, is pleased to announce a proposed fundraising of £2.0 million (the "Fundraising").

The Fundraising will comprise a placing of, in aggregate, 666,666,666 new ordinary shares of 0.1 pence each in the Company ("Ordinary Shares" and such 666,666,666 new Ordinary Shares being the "Placing Shares"), at a price of 0.30p per Placing Share ("Placing Price"), to raise £2.0 million before expenses (together, the "Placing").

280,000,000 of the Placing Shares (the "First Placing Shares") will be issued out of authorities granted to the Directors at the Company's last annual general meeting (the "Firm Placing") and the remaining 386,666,666 Placing Shares (the "Second Placing Shares") will be issued subject to the requisite authorities being granted to the Directors at a General Meeting of the Company's shareholders to be convened in due course (the "Conditional Placing").

Highlights

·    The Company is undertaking an equity fundraising for total gross proceeds of £2.0 million comprised of a firm Placing for £840,000 and a conditional Placing for £1.16 million;

·    Every two (2) Placing Shares will have one (1) warrant attached, exercisable at 0.50 pence per warrant for a period of two years from the date of their grant, on Second Admission ("Investor Warrants"). All Investor Warrants are to be issued once the relevant resolutions have been passed at the General Meeting.

·    The Placing Price represents a 5.26 per cent. premium to the prevailing price per Ordinary Shares on 22 February 2023 following strong support from existing shareholders;

·    The net proceeds of the Fundraising, will be applied to fund general working capital and acceleration of final works necessary to reach full production capacity at the Rustenburg smelter complex in the coming months.

Background to the Fundraising

Ironveld's management has been very pleased with the progress made since August 2022, when Ironveld's team first gained working access to the Rustenburg smelter complex. Following extensive refurbishment, the mothballed plant achieved first production in early January 2023 which was comfortably in line with the Company's initial target of Q1 2023, and since then all parts of the entire production process have been tested and modified to ensure that the first furnace approaches targeted daily production levels. The second and third furnaces are on track to be in production, as planned, by April 2023.

Stockpiling of finished high purity iron ("HPI") and titanium slag is already underway and first sales to customers are in line to be concluded as planned in Q2 2023, once batch sizes have reached optimum levels.  Following acceleration of planned works to the process equipment, in particular the convertor required to separate vanadium slag, this third product and revenue stream will also be available within the coming weeks. Full production capacity at the smelter is expected to be reached by the middle of 2023. 

In the coming months, as production increases to planned levels, the Company's finances will be tied up in working capital for the operation of the plant. In particular, the Company's diesel costs consumed by the existing generators have risen since the date of the Company's previous fundraising in July 2022. While the Company awaits commissioning of its independent solar hybrid power plant anticipated in Q3 2023, the Board considers it prudent to guard against further inflationary pressures by conducting the Fundraising. Accordingly, the Directors believe that the proceeds of the Fundraising will enable the Company to trade through to monthly cash flow positivity on a more efficient and secure basis.

Ironveld has recently received a number of proposals for short term working capital financing but, following discussions with key shareholders, it was felt that a Placing at a small premium to the underlying market price was the most attractive option.  The Placing Price represents a premium of 5.26 per cent. to the 5 day VWAP per Ordinary Share on 22 February 2023.

The legal process related to closing of the smelter acquisition from Business Rescue has been complex and time consuming. As previously announced, all major underlying agreements for the transaction have been signed and only minor administrative items remain to be completed. As such, the Company and the sole creditor are very confident that the successful conclusion of the transaction will be achieved shortly. In the meantime, the Company continues to operate the smelter without interruption and legally benefits from the proceeds of all product sales.

Related Party Opinion

Giles Clarke and Tracarta Limited (in which John Wardle has a beneficial interest) have agreed to subscribe for an aggregate of 126,666,666 Placing Shares at the Placing Price for a total of £380,000 cash under the terms of the Conditional Placing.

The resultant holdings of the relevant Directors are included in the table below:

*G Clarke's interests in 10,062,470 Ordinary Shares above are through his shareholding in Westleigh Investments Holdings Limited.

** J Wardle's interest in all Ordinary Shares above are through his beneficial interest in Tracarta Limited.

Each of Giles Clarke and John Wardle is a related party of the Company for the purposes of the AIM Rules by virtue of their status as Directors of the Company. The independent Directors for this purpose, being each of Martin Eales, Peter Cox and Nick Harrison, consider, having consulted with the Company's nominated adviser, finnCap, that the terms of Giles Clarke and John Wardle's participation in the Placing are fair and reasonable insofar as the Company's shareholders are concerned.

Details of the Placing

The Placing has been wholly supported by existing institutional and other investors, and was conducted by TPI acting as sole broker for the Company.

In total, 666,666,666 Placing Shares are proposed to be allotted and issued pursuant to the Placing, at a Placing Price of 0.30 pence per Placing Share to raise gross proceeds of £2.0 million. The Placing Shares, excluding the First Placing Shares (as detailed below), have been conditionally placed by TPI acting as agent and broker of the Company, pursuant to a Placing Agreement, as detailed below.

The Company currently has limited shareholder authority to issue new Ordinary Shares for cash on a non-pre-emptive basis.  Accordingly, the Placing is being conducted in two tranches as set out below: 

1. Firm Placing

A total of £840,000, representing the issue and allotment of 280,000,000 Placing Shares at the Placing Price, has been raised using the Company's existing share allotment authorities which were granted at the Company's annual general meeting held on 17 January 2023. Application has been made for the First Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 1 March 2023 ("First Admission"). The issue of the First Placing Shares is conditional, inter alia, on First Admission and the Placing Agreement becoming unconditional in respect of the First Placing Shares and not being terminated in accordance with its terms prior to First Admission. The issue of the First Placing Shares is not conditional on the Conditional Placing completing.

2. Conditional Placing

The balance of the Placing, being approximately £1.16 million and representing the issue and allotment of 386,666,666 Placing Shares at the Placing Price is conditional upon, inter alia, the passing of resolutions to be put to shareholders of the Company at a general meeting of the Company to be held on 13 March 2023 (the "Resolutions") to provide the relevant authorities to the Directors to issue and allot further new Ordinary Shares on a non-pre-emptive basis, whereby such authorities will be utilised by the Directors to enable completion of the Conditional Placing (amongst other things, as detailed below). 

Conditional on the passing of the Resolutions, application will be made for the Second Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 15 March 2023 ("Second Admission").

In addition to the passing of the Resolutions, the Conditional Placing is conditional, inter alia, on Second Admission and the Placing Agreement becoming unconditional in respect of the Second Placing Shares and not being terminated in accordance with its terms prior to Second Admission. The Firm Placing is not conditional on the Conditional Placing completing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares of the Company, including the right to receive all dividends or other distributions made, paid, or declared in respect of such shares after the date of issue of the relevant Placing Shares.

Warrants

The Company is proposing to issue subscribers to the Placing with warrants to subscribe for new Ordinary Shares on the basis of one (1) warrant for every two (2) Placing Shares. The Investor Warrants are exercisable at 0.50 pence for a period of two years from the date of their grant, on Second Admission. 

In addition, the Company is proposing to issue TPI with up to 135,000,000 warrants to subscribe for 135,000,000 new Ordinary Shares ("Broker Warrants"). The Broker Warrants are exercisable at the Placing Price for a period of three years from the date of their grant, on Second Admission. 

The grant of the Investor Warrants and the Broker Warrants is conditional on the passing of the resolutions to be put to shareholders of the Company at the General Meeting to provide the relevant authorities to the Directors to issue and allot further new ordinary shares on a non-pre-emptive basis. None of the warrants will be admitted to trading on AIM or any other stock exchange.

Placing Agreement

Under the terms of a Placing Agreement between the Company and TPI, TPI will receive a corporate finance fee from the Company and commission relating to the Placing Shares conditional on First Admission and Second Admission. The Company will give customary warranties and undertakings to TPI in relation, inter alia, to its business and the performance of its duties.  In addition, the Company has agreed to indemnify TPI in relation to certain liabilities that it may incur in undertaking the Placing.

TPI also has the right to terminate the Placing Agreement in certain circumstances prior to First Admission and Second Admission, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. No part of the Placing is being underwritten.

Total voting rights

Following First Admission, the Company's total issued share capital will consist of 3,173,128,854 Ordinary Shares, with one voting right per share. The Company does not hold any shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company will be 3,173,128,854 from First Admission. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company pursuant to the FCA's Disclosure Guidance and Transparency Rules.

Notice of General Meeting

The Company will publish a Circular to convene the General Meeting to propose the Resolutions to enable completion of the Placing, and the grant of the Investor Warrants and the Broker Warrants.

The General Meeting will be held at 10.00 a.m. on 13 March 2023.  The circular containing the notice of general meeting will be published and sent to shareholders in the coming days and will be available on the Company's website, www.ironveld.com. Shareholders are strongly urged to vote by proxy in accordance with the instructions to be set out in the notice of general meeting.

The maximum aggregate number of new Ordinary Shares that may be issued pursuant to the Placing, is 666,666,666.

**ENDS**

For further information, please contact:

NOTES TO EDITORS

Ironveld (IRON.LN) is the owner of Mining Rights over approximately 28 kilometres of outcropping Bushveld magnetite with a SAMREC compliant ore resource of some 56 million tons of ore grading 1,12% V2O5, 68,6% Fe2O3 and 14,7% TiO2.

In 2022 Ironveld agreed to acquire and refurbish a smelter facility in Rustenburg, South Africa, in which it can process its magnetite ore into the marketable products of high purity iron, titanium slag and vanadium slag.

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

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.