Ironveld (LON: IRON) has received a requisition notice from a shareholder that wants to remove chairman Giles Clarke and chief executive Martin Eales from the board.
Ironveld has a high purity iron, vanadium and titanium project on the Northern Limb of the Bushveld Complex. Last year, Grosvenor Resources agreed to subscribe £5.6m at 1p a share, but this has still not been completed.
Richard Jennings of Align Research is behind the general meeting requisition. Richard Jennings and related interests own 9.03% of Ironveld. The share register is dominated by nominees and individuals.
The board believes that the requisition is linked to commercial proposals that Richard Jennings has put to the company.
Richard Jennings says that it would not be part of a fundraising below 1p a share and it put forward a way of raising cash that would not be as dilutive. Richard Jennings is sceptical that the Grosvenor subscription will happen.
Last month, Ironveld agreed terms for a smelter acquisition. It is acquiring Ferrochrome Furnaces, which is currently in business rescue and owns a mothballed smelter complex in Rustenberg, South Africa. This could provide a pathway to production for the company’s project.
The initial payment is £750,000 with a further £5m payable over ten years based on a percentage of profit from the smelter, capped at 13.5% per annum. A refurbishment of the smelter could cost up to £3.2m. A hybrid power plant could be installed to provide renewable energy.
Funding
Bridge funding of £300,000 has been received from investors and £40,000 from the chief executive, but a share issue is required to finance the deal and refurbishment.
Ironveld says that Richard Jennings is aware of a potential placing, and he has previously said he would “hold his corner” in a fundraising of up to £5m at a price of up to 1.25p a share. Ironveld suggests that it is keen for other shareholders to have the opportunity to participate in the placing.
Ironveld will provide a formal response in due course. Ironveld shares fell 12.1% to 0.615p, which values the company at £8.2m.
