Dual-listed Ferrum Crescent, the European lead-zinc explorer, has entered into a legally binding agreement for the sale of Batavia. Batavia is Ferrum Crescent’s wholly-owned Mauritian subsidiary, which is the investment holding company for all the Group’s South African assets, including the Moonlight iron ore project in Limpopo Province, South Africa.
NPSPL Africa and its BEE partner, Ngwenya Capital, intend to acquire Batavia.
[quote]Further to Ferrum Crescent’s announcement of 27 April 2017 regarding, inter alia, the board’s decision to seek to terminate all activities and expenditures in South Africa due to the depressed iron ore market and the project’s high capital cost and infrastructure requirements, Ferrum Crescent has acted swiftly to identify and secure a suitable purchaser for its South African interests.
For nominal consideration of one thousand Australian dollars, the purchasers have acquired Batavia and thereby assumed responsibility for all of Ferrum Crescent’s iron ore assets, its South African subsidiaries and all of the associated corporate, audit, fiscal and environmental responsibilities and costs.
The sale is effective immediately and Ferrum Crescent has given customary undertakings, representations and warranties for an agreement of this nature.
This disposal of Batavia was considered to be a more cost effective and expeditious means of withdrawing from the Moonlight project, rather than pursuing the alternative of an orderly winding-up of the Group’s Mauritian and South African subsidiaries and relinquishment of the Moonlight Mining Right and prospecting right application to the South African Department of Mineral Resources with the concomitant requisite actions, including environmental rehabilitation requirements.
Accordingly, the disposal effectively ends the group’s exposure to all of the costs and commitments associated with maintaining the Moonlight project in good standing and enables Ferrum Crescent to focus its resources on its portfolio of European lead-zinc exploration assets.
“This agreement brings to an end our involvement with the Moonlight project at a time when developing a magnetite iron ore asset of this scale and nature in South Africa has become extremely challenging for foreign companies,” comments Ferrum Crescent executive chairman, Justin Tooth.
“We shall now continue to maximise and focus our efforts and capital deployment on the development of our Spanish lead-zinc assets where we recently intersected our first near-surface mineralisation. I look forward to updating the market with our initial exploration results in due course.”
Feature image credit: Wikimedia Commons