News blog

Ferrex

• BY: Andrew Hore |
• POSTED: 12/06/2013 |

Iron and manganese projects developer Ferrex should report an initial resource statement for the 82%-owned Mebaga iron ore project in Gabon before the end of 2013.

Ferrex is focused on iron ore and manganese prospects in Africa. It owns majority stakes in all of its prospects. The first project that should reach production is the 85%-owned Nayega manganese project in Togo. The cost of production will be less than half the current manganese price. The mine will be developed in the second half of this year but Ferrex is still waiting for the mining permit from the authorities. There is a good chance that production could start later next year but it does depend on gaining the permit.

The payback on the Nayega mine should be rapid and the cash generated can finance the Gabon project. Bringing Nayega into production will cost $15m and this will be raised from banks.

The Mebaga iron ore project in Gabon is likely to be the next in production and there is already infrastructure in the area. The resource is 20mt at 60% Fe.

The Malelane project in South Africa is further away from exploitation. It will require capital expenditure of $139m.

At 1.23p a share, up 0.15p, Ferrex is valued at £9.88m. At the end of March 2013, net cash was £1.4m and a £1m liability has subsequently been paid for in shares. 

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFMay2013_44.pdf