Highlights
- Ferrum Crescent signs legally binding letter of intent with Anvwar Asian Investment (“AAI”) to progress Moonlight BFS Development
- US$10m to acquire 35% interest in Moonlight project
- US$3.5 additional funds to contribute to BFS costs
- First BFS payments scheduled by end of year
- AAI representative Anvwar Al Balushi will be invited to the Ferrum Iron Ore board and Moonlight Iron Ore Project steering committee
Ferrum Crescent Limited, the ASX, AIM and JSE quoted iron ore developer, today announces it has signed a legally binding letter of intent (“Agreement”) with Anvwar Asian Investment (“AAI”) to facilitate the completion of the Company’s bankable feasibility study (“BFS”) at the Moonlight Iron Ore Project in Northern South Africa. Under the Agreement, AAI will pay US$10m to Ferrum Crescent in return for a 35% interest in the Moonlight Project and will also contribute US$3.5m to the on-going costs of the BFS. The Agreement is subject to certain conditions regarding confirmation due diligence and the receipt of applicable regulatory approvals.
AAI is an Oman based investment Company chaired by Mr Anvwar Al Balushi, who will be invited to join the Ferrum Iron Ore board and Moonlight Project steering committee upon completion of the agreement. The Moonlight Project provides AAI with potential exposure to an iron ore project capable of producing high-grade pellet product, located within 200km of established rail hubs. Ferrum Crescent has already undertaken extensive metallurgical testwork as part of the Moonlight BFS and earlier this year appointed DANIELI C. Officine MeccanicheS. p.A. (“Danieli”), a global leader in engineering services and equipment supply, as the process engineer for the BFS.
Under the Agreement, an initial acquisition payment of US$1 million will be made to Ferrum Crescent by the end of the November 2013, with the remaining US$9 million to be paid to the Company during Q1 2014. Funds received from the sale will be used by the Company to progress the Moonlight BFS and for working capital requirements. The additional US$3.5m AAI contributions to the BFS costs will be made in prearranged tranches as work progresses.
AAI was introduced to the Company by Dubai-based Naru Capital (which is part of the Naseba Group). Naru Capital is a capital introduction, deal facilitator in the emerging/growth markets, and a Director of that group played a pivotal role in bringing the parties together.
Commenting today Ed Nealon, Chairman, of Ferrum Crescent said: “AAI is an important strategic partner for Ferrum Crescent as we look to move the Moonlight Iron Ore Project towards construction. Moonlight is a very unique project with metallurgy that shows a very high grade iron product can be produced and shipped using existing infrastructure.”