Ironveld PLC (AIM:IRON) shares fell 35% to 0.026p after the AIM-listed magnetite miner warned it will likely require additional investment before its South African operations generate sufficient cash flow to sustain the business.
The company's auditors included a material uncertainty paragraph relating to going concern in their report on the accounts for the year ended 30 June 2025, with management acknowledging that further funding will be needed in the short term while flagging confidence in its ability to raise capital based on its fundraising track record.
Ironveld said it has made progress towards production since the period end, signing a mining operations agreement with Daemaneng Minerals under which Daemaneng assumes full operational and financial responsibility for mining and processing activities on a capital-light basis, shielding Ironveld from direct operating costs while retaining ownership and commercial control of its assets.
A trial delivery of dense media separation (DMS) grade magnetite, a processed iron ore used in mineral separation and steelmaking, has been completed to an established South African customer, with phased commercial volumes anticipated from a minimum of 1,000 tonnes per month.
The DMS plant is being upgraded to target initial production of 6,000 tonnes per month, scaling to 15,000 tonnes per month, with plant upgrades targeted for completion by end of March.
The company also said key commercial terms had been agreed for a run-of-mine offtake deal supported by a ZAR 3 million prepayment structure, and that discussions with a German trading house regarding a strategic marketing agreement requiring 15,000 tonnes per month were ongoing.
For the year to 30 June 2025, Ironveld reported a pre-tax loss of £1.6 million, narrowed from £1.8 million a year earlier, with cash of £862,000 at the period end against just £4,000 in 2024, following equity raises totalling £3.46 million during the year.