Name and Location
Moonlight Crescent iron-ore project, Limpopo, South Africa.

Client
Ferrum Crescent.

Project Description
The Moonlight Crescent iron-ore project, located on the Moonlight, Julietta and Gouda Fontein farms, in Limpopo, has been configured as a 4.5-million-tonne-a-year pelletised iron-ore concentrate operation. The project is expected to produce iron concentrate of about 69%.

In April this year, Ferrum updated the Joint Ore Reserves Committee- (Jorc-) compliant mineral resource to an estimated 307-million tonnes at 26.9% iron. This includes 172.1-million tonnes at 25.3% iron in the inferred category, 83-million tonnes at 27.4% in the indicated category and 52.6-million tonnes at 31.3% iron in the measured category.

The updated Jorc resource forms an important part of Ferrum’s plans to progress the project’s bankable feasibility study (BFS) in 2014. Ferrum says the mineral resource is suitable to inform the more detailed feasibility study work to be done and the up-to-date assessment of “reasonable prospects for eventual economic extraction” also adds confidence to the project’s potential.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total value of the project has not been disclosed.

Duration
Construction at Moonlight is expected to start by 2015 and will be completed by 2018.

Latest Developments
Funding raised by Ferrum Crescent will enable the company to complete the bankable feasibility study (BFS) at its high-quality Moonlight magnetite iron-ore project, in Limpopo.

The company received applications from shareholders to subscribe for 100-million shares at £0.005 for a total of £500 000.

The placement shares will rank equally with existing fully paid ordinary shares from allotment.

The placing has secured funds to cover basic corporate overheads, while sprogressing the PMI-funded BFS at Moonlight.

The BFS will expand the total resource of the project.

“Our job now is to complete our key operational workflows and also communicate to investment markets that value iron projects for junior companies should not be based on direct shipping ore and scale. We are developing a specialist product for the steel industry that is capable of delivering significant margins, especially in an iron-ore market that is undergoing fundamental changes,” says Ferrum MD Tom Revy.

Subscribers to the placement shares included Allan Jenks-controlled Grassroots Exploration, which subscribed for 13-million shares. Grassroots Exploration, which already held 77.5-million shares, or 14.93%, of Ferrum prior to the subscription, would now hold 90.5-million shares.

Following the completion of the placement, Ferrum will have 618.7-million shares in issue.

Meanwhile, since the BFS was restarted, the final pit location has been established, ready for advanced reserve drilling and large-scale metallurgical testwork. With these workflow components in place, Ferrum has progressed engagement with stakeholders, including infrastructure providers, government, black economic-empowerment companies and local community groups.

This period of engagement has also enabled Ferrum to sign terms for a $12-million funding agreement with PMI to earn a 39% stake in Ferrum Iron Ore, the entity that owns the Moonlight project.

In addition to funding the BFS, funds will be deployed towards a new exploration-drilling programme at the Julietta farm, to increase the overall project resource.

Following infrastructure discussions and a desktop analysis of increasing rail capacity in Limpopo, Ferrum has started a full market study of South African steel manufacturing.

The company believes that there is a significant opportunity to vend Moonlight’s high-grade product to domestic steel users, obviating the need to ship pellets through Richards Bay.

The study started following increasing interest in Moonlight from South Africa and the opportunity such a route will create to reduce full capital expenditure and increasing potential margins.

Key Contracts and Suppliers
ProMet Engineers (detailed scoping study) and Mineral Corporation Consultancy (updated resource estimate).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ferrum Crescent, tel +27 11 510 0159, fax +27 86 219 5701 or email info@ferrumcrescent.com.
ProMet Engineers, tel +27 21 556 9759, fax +27 21 556 9758 or email info@promet.co.za.