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Placing and Subscription of 167 million new Ordinary Shares to raise £835,000
Ferrex, an AIM quoted manganese development and iron-ore exploration company focused in Africa, has raised £835,000, before expenses (£768,250 net of expenses) through the placing of 127,500,000 new Ordinary Shares and subscription of 39,500,000 million new Ordinary Shares at 0.5p each in the capital of the Company at 0.5p per New Ordinary Share.
Highlights:
· Proceeds will be used to provide working capital as Ferrex moves towards finalising full financing for the construction of its 250,000tpa Nayega Manganese Project in Togo
· Finalised an accelerated startup production plan for Nayega that will provide manganese ore production and near term cash flow within eight months of commencement of works
· Shares issued from existing shareholder authorities
· Support from new and existing shareholders and Board participation by way of subscription, further aligning the Directors with Ferrex shareholders
Dave Reeves Chief Executive of Ferrex said, “We are delighted to have received such strong support from our shareholders for this Placing. With these funds secured we will be well positioned to fully examine all financing options for the accelerated construction of our flagship Nayega manganese project as we progress towards an initial production, currently anticipated at the beginning of 2016, subject to finalise the Mining Convention and secure the Mining Permit. We are in discussions with numerous interested parties in respect to the funding of Nayega as a low-capex, open pit, 250,000tpa manganese mining operation. We look forward to providing further updates on this in due course, including finalisation of funding, as we announce the next stages of development and mine construction for Nayega.”
Fundraising and Use of Proceeds:
Over the past year, the Company has made significant progress at its Nayega Manganese Project in Togo, not least of which has been the completion of modelling for Phase 1 of the Definitive Feasibility Study which has led to further examination of a potential accelerated start up. This option sees a simpler plant built either as a 250,000tpa plant or in stages using cashflow generated from mining operations to fund incremental expansion.
At the same time, the Company continues to progress discussions with numerous parties regarding the potential financing of the entire production project at Nayega. The Company intends to enter into an MOU in the near future with one or more preferred parties to finalise these discussions. In particular, one party has progressed to providing a term sheet to Ferrex which, if the transaction was concluded would see an equity investment into the Company at a significant premium to the Issue Price in return for a substantial stake in the Company.
Accordingly, the proceeds of the Fundraising give the Company cash headroom to consider the options available to it. These proceeds will therefore be used primarily to provide general working capital to Ferrex until these discussions are concluded. The Directors may, however, decide to commit some of the funds towards the conduct of due diligence by one or more of the third parties considering providing financing for Nayega at either the project or Company level.
In the meantime, the Company continues to work with the Government of Togo towards the conclusion of the Mining Convention which is the penultimate item for the issuance of the Mining Permit over Nayega. The Company still expects to conclude the Mining Convention by the end of Q1 2015.
