LONDON (ShareCast) - (Sharecast News) - High-purity iron, vanadium and titanium project Ironveld has commenced mining and the supply of ore to a potential off-take partner, which it described a specialist subsidiary of an international steel group, the Bushveld Complex in Limpopo Province, it said on Wednesday.
The AIM-traded firm said its vanadiferous titaniferous magnetite project had a resource that contained 27 million tons of high-purity iron and 1.4 billion pounds of vanadium in situ, with the latter representing more than four times the global annual demand.

It said it had been "actively engaged" over the last year with a specialist metals subsidiary of an unnamed international steel group, which it said was a potential off-taker for its unrefined ore.

Following successful laboratory tests on samples of its ore, the off-taker had requested a sample of 10,000 tons for commercial scale testing.

Ironveld said the company, having finalised community access and rental agreements, said it had engaged the services of an opencast contract mining company and begun to take delivery of the commercial sample.

Initial grades analysis indicated that the company's ore should be amenable for successful processing in the off-taker's facility.

It was being paid for the commercial sample, such that the programme of sampling was expected to cover all its associated operating costs.

Ironveld explained that, should the commercial sample be successfully processed, the off-taker had indicated that they could request to undertake a long-term test of a "significantly larger" sample, taken across the licence holdings of the company for variability testing.

It had anticipated that the extended testing programme could last for up to 12 months.

Upon the successful conclusion of those tests, the company said it could expect to enter into a long-term off-take agreement with the off-taker that would set it on the path to executing its stated strategy of mining its ore and processing on site.

In that context, the Middelburg Smelting facility remained an acquisition option for the company, it said.

"We are encouraged by the interest of the potential off-take partner," said chief executive officer Peter Cox.

"The sampling programme will generate revenue for the company and we are hopeful that this will lead to a longer term commercial agreement, such that the company would move from a phase of exploration to one of revenue generation."

Cox said that, should the long-term test be successful, the amount of ore anticipated to be supplied under the envisaged off-take agreement would not affect its strategy of developing its own smelting capacity.

"Since acquiring the project, Ironveld has obtained the necessary permits to begin construction and has secured financial support from the South African Government via the Industrial Development Corporation.

"The long-term objective remains to operate our own smelting capacity to process the large Vanadiferous Titaniferous Magnetite resource at the project."

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