Ironveld PLC (AIM:IRON) traded up in Tuesday's early deals after it signed a binding mining operations agreement with Daemaneng Minerals covering the Lapon mining site, in South Africa.
Under the terms, Daemaneng will take full responsibility for mining operations over five years, including a capital and operational expenditure commitment of approximately £21.6 million.
The agreement eliminates Ironveld’s mining-related costs while preserving its ownership and licence control.
Daemaneng will fund all activities and recover its expenditure from the proceeds of mined material. The contractor will also manage all offtake agreements and guarantee supply to Ironveld's DMS plant.
Chief executive Kris Andersson described it as "a defining moment" in the AIM-quoted firm's transformation, making it leaner and a more de-risked business.
"[It is] the first tangible step in pivoting the Company towards delivering a company focused on revenue generation, risk mitigation, and the realisation of the significant inherent value within our assets," Andersson said.
He added: "By engaging an established and operationally experienced partner, we are unlocking immediate production at Lapon without further capital outlay. The agreement removes the majority of mining-related expenditure from our balance sheet while introducing a new revenue stream."
In London, Ironveld shares were up 32% changing hands at 0.058p.