Ironveld PLC (LON:IRON) jumped 16% as it agreed a deal to acquire the Middelburg smelter formerly owned by Jubilee Platinum (LON:JLP). Peter Cox, Ironveld’s chief executive, said: "This potential acquisition is a unique opportunity for the company to produce HPI, vanadium and titanium significantly earlier than previously envisaged and begin selling this to our offtake partners and receiving revenues. “As the smelter and convertor only require refurbishment there is no construction risk and operating the facility will significantly de-risk the project by ensuring early validation of our high quality products.
WATCH: Ironveld eyeing up production and profitabilty by Q1 next year, says CEO Peter Cox
Jubilee sold it to Siyanda Resources for £5.3mln in 2015 and Siyanda is now passing it onto Ironveld for an initial £2.9mln in cash and shares. This will be followed by two further payments of £4mln on the first and second anniversaries of the signing of the memorandum of understanding. The agreement includes a 70% stake in Power Alt, which owns a 10.6Mw power plant at the site Due diligence has been done and once the deal completes, Ironveld will upgrade the site to process high purity iron, vanadium and titanium from its deposit at Bushveld in the Limpopo province of South Africa. “The anticipated profits and free cash flow from the Smelting Plant will place the Company in a considerable position of strength," said Cox. Shares rose 16% to 4.08p.