THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (INCLUDING AS IT
FORMS PART OF THE LAWS OF ENGLAND AND WALES BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").
2 December 2024
Ferro-Alloy Resources
Limited
("Ferro-Alloy" or the "Group" or the "Company")
Strategic Focus on Carbon
Black Substitute Marketing and Sales
Kazakhstan Exempt Offer Bond
Programme - Fourth Tranche
Ferro-Alloy Resources Limited
(LSE:FAR), the vanadium producer and
developer of the large Balasausqandiq vanadium deposit in Southern
Kazakhstan, is pleased to announce a
strategic update following the successful carbon black substitute
("CBS") product marketing study and the sale of a fourth tranche of
the Company's Kazakhstan Exempt Offer Bond Programme (the
"Programme") with a nominal value of US$5 million.
Summary
·
In order to pursue the commercial opportunities in
CBS revealed by the Smithers Study, the focus of the Company's
operating plant will be switched to research and development
("R&D") to complete and optimise the ongoing feasibility study,
including the development of markets for the Company's CBS
product.
·
The Smithers Study (see announcement dated 21
November 2024) estimated the price of the Company's CBS product at
US$500 per tonne in the tyre market and between US$550 - US$600 per
tonne in the non-tyre market (excluding any value attributable to
the product's strong sustainability credentials).
·
As previously announced on 27 July 2023, the
Company launched a new Exempt Offer Bond Programme where all bonds
issued under the Programme will be listed on the Astana
International Exchange ("AIX") in Kazakhstan.
·
The first three tranches of bonds have already
been sold for US$13 million and the Company has now sold a fourth
tranche of bonds (the "Fourth Tranche") with a nominal value of
US$5 million, issued at par.
·
Under the terms of the Programme, US$2 million of
headroom remains for the issue of future tranches by the
Company.
Research and Development
The focus of the current production
facilities will be moved to R&D that will expedite and optimise
the feasibility study and increase marketing opportunities. The
main R&D projects will be:
·
Completion and commissioning of
the carbon concentrator, directly treating ore from the
Balasausqandiq deposit, aimed at finalising the technology and
providing materials for the development of markets for the
Company's CBS product
·
Development of processes to achieve high-purity
vanadium oxides which will open marketing opportunities to access
higher market prices for future vanadium production
·
Completion of the process changes and
commissioning of the production of special vanadium oxides needed
for the production of battery electrolyte
·
Optimisation of leaching technology, including the
patented process for the sorption and desorption of low-grade
vanadium solutions and enhanced leaching of Balasausqandiq ore to
further improve the existing processes already successfully tested
in the current feasibility study work
Plant Operations
With the focus now on completion and
optimisation of the feasibility study, the process plant operations
will be conducted only when suitably profitable raw materials are
available. Ongoing operating costs are being reduced to enable the
facilities to be operated principally as an expanded R&D
centre. Consequently, quarterly production figures will not be
published going forwards.
Commenting on the new strategy and the bond sale, Nick
Bridgen, CEO of Ferro-Alloy Resources said:
"The successful raising of US$5m by
the issue of bonds enables us to refocus all our efforts on
expediting and optimising the feasibility study, including the
piloting of the carbon black substitute we announced on 21
November. The bulk of the feasibility study is now complete and we
expect to be able to announce several updates over the next few
months before completion during the second quarter of
2025."
Fourth Bond Tranche
·
On 29 November 2024, the Company listed and sold
the Fourth Tranche issued under the Programme on the
AIX.
·
The net proceeds of $4.7 million from the sale of
the Fourth Tranche will be used to complete the ongoing feasibility
study for the Balasausqandiq project.
·
A summary of the salient terms and conditions of
the Fourth Tranche is as follows:
-
ISIN: KZ000003348
-
Specified currency: US Dollars
- Face
value: US$100 (one hundred US dollars)
-
Number of bonds: 50,000 (fifty thousand) units
-
Aggregate principal amount: US$5,000,000 (five million US
dollars)
-
Issue date: 29 November 2024
-
Maturity date: 29 November 2027
-
Coupon rate: 13.5% fixed of the nominal value of the bonds
issued
-
Frequency of interest payments: quarterly, 28 February, 29
May, 29 August and 29 November of each year during the circulation
period, commencing on 28 February 2025
-
Coupon basis: 30/360
-
Issue price: 100%
- Put
option: within seven calendar days starting from 29 November 2026
the Company shall, at the option of a bondholder, upon the
bondholder giving relevant notice to the Company within 30 calendar
days starting from 29 September 2026, repurchase such bonds at 100%
of their nominal value together with the interest accrued on the
date of actual repurchase.
·
Trading of the Fourth Tranche will commence on 2
December 2024.
ENDS
For further
information, visit www.ferro-alloy.com or contact:
Ferro-Alloy Resources Limited
|
Nick Bridgen (CEO) / William
Callewaert (CFO)
|
info@ferro-alloy.com
|
Shore Capital
(Joint Corporate
Broker)
Panmure Liberum Limited
(Joint Corporate Broker)
BlytheRay (Financial
PR)
|
Toby Gibbs/Lucy Bowden
Scott Mathieson/John More
Tim Blythe/Will Jones
|
+44 207 408 4090
+44 20 3100 2000
+44 20 7138 3204
|
Freedom Finance Global PLC
(Bond Underwriter)
|
Renat Syzdykov
|
+7 701 766 4865 /
ib@ffin.kz
|
Notes to
Editors
About
Ferro-Alloy Resources Limited:
The Company's operations are all located at the
Balasausqandiq deposit in Kyzylordinskoye Oblast in the South of
Kazakhstan.
Balasausqandiq is a very large deposit, with
vanadium as the principal product together with the carbon black
substitute ("CBS") and several by-products. Owing to the nature of
the ore, the capital and operating costs are very much lower than
for other vanadium projects.
The most recent mineral resource estimate for
ore-body one (of seven) provided an Indicated Mineral Resource of
32.9 million tonnes at a mean grade of 0.62%
V2O5 equating to 203,364 contained tonnes of
vanadium pentoxide ("V2O5"). In the system of
reserve estimation used in Kazakhstan the reserves are estimated to
be over 70m tonnes in ore-bodies 1 to 5 but this does not include
the full depth of ore-bodies 2 to 5 or the remaining ore-bodies
which remain substantially unexplored.
The grade of carbon in the deposit is over
8%. The carbon flows through to the tailings from where it is
concentrated in a simple low-cost operation into a 40% carbon
product, the CBS, that can be used in place of carbon black as a
reinforcing filler in the making of rubber.
The Project will be developed in two phases,
Phase 1 and Phase 2, with Phase 1 treating 1.65m tonnes per
year.
There is an existing concentrate processing
operation at the site of the Balasausqandiq deposit. The production
facilities were originally created from a 15,000 tonnes per year
pilot plant which was then expanded and adapted to recover
vanadium, molybdenum and nickel from purchased concentrates.
Alongside this operation there is a well-equipped laboratory and
highly skilled technical team who have already developed the
technology that is being built into the feasibility study and is
further developing and optimising processes needed for future
vanadium and carbon operations. The plant will operate only when
profitable concentrates are available and, when not operating as a
production facility, will operate on an expanded basis as an
R&D centre.