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Admission to trading on the main market and first day of dealings

Published by
Global Mining Review,


Ferro-Alloy Resources Limited, the Guernsey vanadium mining and mineral processing company with operations based in Southern Kazakhstan, has announced that its entire issued ordinary share capital will commence trading.

It will commence on the standard listing segment of the official list of the financial conduct authority and on the main market of the London stock exchange under the ticker FAR.L and ISIN GG00BGDYDZ69.

As part of the admission process, the company has raised £5.2 million (before expenses) from institutional shareholders through a placing and subscription of 7 507 761 new ordinary shares of no-par value at a placing price of 70p each, implying a market capitalisation of £219.1 million on admission. Following admission, the total number of ordinary shares in the company in issue will be 312 978 848 each with equal voting rights.

Highlights

  • Established and profitable vanadium producer in Southern Kazakhstan focused on expanding and developing the Balasausqandiq vanadium project.
  • Operations located at the Balasausqandiq site with two main business activities: the Balasausqandiq vanadium project, which has a reserve of over 70 million t estimated on the locally required basis, of which ore-body number one (of five) has estimated reserves on a JORC basis of 23 million t. There is significant upside potential from exploration; and an existing profitable vanadium concentrate processing operation.
  • Raised £5.2 million to be used to further develop and expand production at Balasausqandiq; initiate phase 1 of the development of the Project, giving annual production of 5600 t vanadium pentoxide; and expanding production at the existing operation to around 1500 tpy.
  • Unusual sedimentary deposit allows for much lower processing costs than usual, being only around 40% of the operating costs of typical primary vanadium producers.
  • Existing road access, nearby rail and power availability, together with a simple processing route, make for very low capital costs per annual tonne of vanadium, around 40% of other typical projects.
  • Low capital and high margin give the project an NPV of US$2 billion at a long term forecast vanadium pentoxide price of US$7.50/lb (or US$3.6 billion at the current price).
  • Staged development plan allows for the development of later phases to be substantially paid for from earnings, with only very small shareholder dilution.
  • Targeted overall annual production is 23 000 t of vanadium pentoxide.
  • Surge in demand for vanadium driven by steel producers that utilise it for its strengthening qualities and the emerging use of vanadium in clean energy storage in the form of vanadium redox flow batteries.
  • Strong pricing backdrop: vanadium pentoxide price up 450% in three years to circa US$14/lb as on 22 March 2019.
  • Highly experienced board and senior management team with proven track records.

Nick Bridgen, CEO, commented: "Today marks a significant milestone for Ferro-Alloy with the completion of our successful listing on the London Stock Exchange. We're excited to be entering the next phase as we look to advance Balasausqandiq; this unique project has the potential to be one of the world's largest and lowest cost producing mines. Given our existing production and defined development path to build a low capex mine and production facility, Ferro-Alloy offers a fantastic opportunity to gain exposure to the growing vanadium market, the fundamentals of which continue to strengthen in line with the emergence of vanadium batteries used in clean energy storage. With incomparable economics in tandem with a world-class team of scientists and technicians, we aim to be at the forefront of this market. I would like to welcome our new shareholders to our register and thank existing shareholders for their continued support. We look forward to the future with optimism."

Read the article online at: https://www.globalminingreview.com/finance-business/28032019/admission-to-trading-on-the-main-market-and-first-day-of-dealings/

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