AMN - SOUTH AFRICA: Ferrum Crescent reviews Moonlight project

Ferrum Crescent is reviewing the Moonlight iron ore project in South Africa. Since the beginning of 2016, parallel to the previously announced review and strategic refocusing of the group’s assets and corporate structure, the company has been progressing a number of new potential avenues, both independently and in conjunction with our existing partners and various third parties, to generate value for the flagship project.

Moonlight, located in Limpopo Province in the north of South Africa, is a magnetite iron ore project with a development objective to ultimately produce a high-quality product for use in blending by steel producers. The project is situated near to the Thabazimbi rail hub, a loading yard that currently serves the third party Kumba mine.

Highlights:

-          Board actively evaluating engineering pathways for alternate production routes, based on existing technologies and modelled on current equipment types which are in use at comparable mining operations. Examining lower cost capex development options with potential partners utilising alternative methods for the transportation of concentrate rather than a pipeline

-          Discussions with new potential off-take partners for the supply of concentrate

-          Recent re-engagement to seek to recover historic geological data and core samples on both the Julietta and Moonlight licence areas

-          Ongoing assessment of potential construction/production share partners on a Build-OperateTransfer model with farm-in partner, Business Venture Investments No. 1709 (Proprietary) Ltd (BVI) and its sister company, Ovation Capital

-          Memorandum of Agreement and co-operation framework signed with the Mayor of the LephalaleMunicipality situated in the Waterberg District of the LimpopoProvince

-          With a full mining permit in place, the MoA secures the necessary consents from local stakeholders for progression of the project into development

-          Items covered by the MoA include: employment, corporate social responsibility and skills training. The MoA will assist discussions with both existing partners and various third parties with respect to the Moonlight project’s future development.

Following completion of the review process, the Board has sought to refocus the group’s operations in South Africa and progress a number of key work streams. A new internal engineering study is under way to establish and assess revised capex estimates, routes to market and rate of return components. In addition, discussions with credible potential new development and offtake parties have started, with the recent completion of the MoA with the local municipality serving to establish a stronger pathway towards cooperative sustainable development. With the active support of the Lephalale municipality, the Board has also recently reinitiated a process to seek to recover historic exploration data and core samples in respect of the Julietta and Moonlight licence areas.

While the iron ore price continues to fluctuate, the Board believes that the Moonlight deposit’s location and high-grade make it a viable, near-term production source for iron ore that can then be blended with more prevalent, lower-grade material in order to produce a concentrate suitable for steel production in Africa, the Middle East or Asia.

Ferrum Crescent Executive Chairman Justin Tooth says:  “Our recent reprioritising of tasks and corporate restructuring is showing real benefits as we endeavour to derive value from our flagship project in South Africa and option over GoldQuest in Spain.

With a world-class team of geologists and mining engineers in place, with significant experience of working in our key geographic regions, we are well placed to obtain and re-process the additional historical exploration data on Moonlight and finalise key development agreements. This will strengthen our ability to negotiate with credible partners for the future development of mining operations. We have an exciting time ahead and I look forward to announcing a further update in due course.”

www.ferrumcrescent.com

News courtesy of International Mining