Sable Platinum has entered an agreement, with IPace, for the establishment of an unincorporated JV to conduct the business of commissioning, operating and maintaining of a DMS beneficiation plant and to sell the product.
IPace is a JV between Ironveld Mining, a subsidiary of Ironveld and Pace SA. The plant will be based on Ironveld Mining’s Lapon mining right and will utilise ore from the mining operations to supply the plant. IPace is the operating partner and will be responsible to erect, operate and maintain the plant and the marketing of the product. It is estimated that at full production the plant could produce approximately 10 000 tpm of DMS grade magnetite.
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The beneficiation plant will be owned by Lapon Plant, a wholly owned subsidiary of SPH, and the UJV will lease the plant from Lapon Plant. The estimated capital cost of the beneficiation plant is R15 million and SPH will provide the funding to Lapon Plant. Once the funding plus interest has been recovered by SPH it will transfer at R 1 per share 50% of Lapon Plant to IPace.
The funding of R15 million will be obtained by SEAM from the already announced rights issue of R52,2 million. To commence the process of erecting and commissioning the beneficiation plant, SEAM has agreed with PBNJ Trading and Consulting, a material shareholder in SEAM, to advance a loan of R17 million to SEAM to be repaid from the proceeds of the rights issue.
This is an exciting opportunity for SEAM to invest in a cashflow generating business. SPH and IPace have agreed that an investment in a larger plant will be considered once the proposed plant has reached its full capacity.
Read More: Sable Platinum and IPace establish JV for beneficiation of coal