Ironveld - Initiation of Coverage
Ironveld joined AIM in 2012 with Prospecting Rights over a vast 165km² area in the Bushveld, South Africa, with plans to mine magnetite iron ore as feedstock for its own pig iron plant. Since then, there has been a large JORC-resource delineated (2013), a cracking DFS (2014), mining licences secured, environmental approval gained, plus confirmation of power supply from Eskom - major milestones on the road to putting this project into production. All great news but in recent years Ironveld has been treading water. Post a recent £1.15m funding, the board now has 12-months to finally do a financing deal. Last year Ironveld was being helped by IIG in this respect but is now free of their clutches. This stock is in play.
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Remarkable high-grade iron asset with 3 economic revenue streams
The project’s JORC-compliant resource of 56.3Mt grading at 68.6% Fe2O3, 14.7% TiO2 and 1.12% V2O5 is capable of producing three economic revenue streams – HPI with a big competitive advantage plus vanadium and titanium. Already a leading offtake partner is engaged for the vanadium.
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Near-term chance to get into production with smelter acquisition
Securing finance would allow Ironveld to either acquire an identified 7.5MW smelter or build their own 5MW smelter at the mine site. Beyond that are plans to build a new 15MW smelter and double production.
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Chance of early cash flow from JV deal supplying magnetite ore
Ahead of all that, a deal could be in the offing to mine/crush/supply ore which could really improve Ironveld’s negotiating stance in financing talks.
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Risked conservative NPV plus peer comparison shows upside of 376%
Our conservative valuation illustrates the potential. We initiate coverage of Ironveld with an initial target price of 3.26p and Conviction Buy stance.
Ironveld is a holding company. Through its subsidiaries, Co. is engaged in the mining, exploration, processing and smelting of vanadiferous and titaniferous magnite in South Africa.
Align Research is a commissioned research company founded in November 2015 in order to provide the under-served smaller company space with high quality analysis. We have an initial focus on the natural resources sector, in which we see significant opportunities given the current once in a generation bear market, however all undervalued small caps (sub £100m) are considered by our team. Align was founded by industry professionals with decades of experience in the stock markets, headed up by highly qualified individuals from both fund management and analytical backgrounds.
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