Shares in Ironveld PLC (AIM:IRON) jumped 32% to 0.025p after the mining developer said its processing plant had reached sustained production and secured strong commercial demand.
Ironveld, an AIM-listed company producing strategic metals for mineral processing, said its dense media separation plant was now running continuously for 16 hours a day on a double shift.
The plant is processing between 2.5 and 3.5 tonnes an hour, against a design capacity of 5 tonnes.
It is producing an average of 1.4 tonnes an hour of in-specification magnetite, a magnetic iron mineral, alongside roughly 1 tonne an hour of maghemite.
The company said maghemite, a related iron oxide, could open a new revenue stream, as it is used as a weighting material in drilling muds for the oil, gas and mining industries.
Ironveld is tuning the plant with the aim of reaching its 5 tonnes an hour design throughput by the end of July, while maintaining product quality.
On the commercial side, the company said it had secured three clients.
Two, who received around 100 tonnes of material between them, have confirmed satisfaction with the quality and are placing repeat orders.
The third, a significant buyer requiring around 5,000 tonnes a month, is set to receive its first sample batch shortly.
Ironveld said all material was being sold at projected pricing levels, though the detail remained confidential.
The company holds roughly 350 tonnes of in-specification product in stock.
It is evaluating options to expand the plant in the face of demand that could outstrip current capacity.
Separately, Ironveld said a mineralogical study of its Layer 21 core was progressing on schedule at Mintek, South Africa's national mineral research organisation.
Initial results are expected within 30 days, after which the company will develop a process flow sheet and assess the economics of processing the ore.
Chief executive Kris Andersson said achieving sustained production and consistent quality was a significant milestone, and that inbound interest suggested demand could exceed what the current plant can produce.
