# Ferro-Alloy Resources announce completion of Vision Blue Resources initial investment

- Link: https://www.directorstalkinterviews.com/ferro-alloy-resources-announce-completion-of-vision-blue-resources-initial-investment/412995025
- Published: 2021-06-01T07:13:11+01:00
- Author: Giles

**Ferro Alloy Resources Limited** ([LON:FAR](https://www.directorstalkinterviews.com/company/ferro-alloy-resources/far.l)),
has today announced the completion of the Initial Investment by Vision Blue as announced
on 15 March 2021 following fullfillment of all necessary conditions.  This triggers
the receipt of a further investment of US$1.6m in addition to the investment of 
US$1.5m already made, bringing the total invested by Vision Blue and its coinvestors
to date to US$3.1m.  The investment is to be made by the issue of 12,769,558 ordinary
shares in the Company and completion is expected to occur on 3 June 2021.

The Subscription Agreement (announced on 15 March 2021) envisaged that this issue
would initially be made by subscription for convertible loan notes which would have
converted into ordinary shares upon the receipt of the consent by the authorised
body in Kazakhstan. This Consent was received on 19 May 2021 and the Company and
Vision Blue have therefore agreed to amend the agreement to provide for the subscription
to be made for the same number of ordinary shares directly. 

Vision Blue have further investments rights amounting to an additional US$9.5m, 
comprising US$7.0m which it may make within three months of receipt of the Consent
and US$2.5m after completion of the Feasibility Study. The Consent covers the issue
of up to 88,588,805 shares within the 12 months following the date of the Consent.
Accordingly, it has been agreed that any further investment of up to US$7.0m which
would come prior to 19 August 2021 will also be made as a direct subscription for
ordinary shares where to do so would not trigger the requirement to publish a Prospectus.
A new consent will be applied for in respect of share issues scheduled to be made
after the expiry of the Consent.

Following the completion of the Initial Investment, Sir Mick Davis will assume the
role of Chairman as outlined in the Subscription Agreement.  Mr. Chris Thomas, current
Chairman of FAR, will assume the role of Non-Executive Director following Sir Mick
Davis’s appointment. The Company has also appointed Mr. Peet Nienaber as a Non-Executive
Director from immediately after completion which is expected to occur on 3 June 
2021.

In consultation with Vision Blue, the Company is planning to expand the scope of
the feasibility study which is already underway. This includes potentially expanding
the scope to include further evaluation of the Phase 2 expansion to 4 million tonnes
per year of ore treated and to further establish the potential value to be extracted
in the form of by-products.  The expanded scope is likely to entail a drilling programme
to upgrade sufficient resource to the JORC Indicated category to enable planning
for production at the expanded rate for a significant mine life. This will involve
further drilling of ore-bodies 2 to 5, a large part of which is already in the reserve
category under the Kazakhstan GKZ system of resource and reserve classification 
but did not meet the requirements of the internationally recognised JORC system.
This, together with the longer time-period needed to complete variability process
testing on the wider range of ore samples is likely to extend the timing of completion
of the study into the first half of 2022. The Company believes that the expanded
scope will make for a more robust and profitable project and bring enhanced returns
to shareholders in the longer term.

As previously announced, the Company has been constructing power grid infrastructure
to draw power from an adjacent high voltage (110kV) line, including the connection,
transformers, approximately three km of line and necessary communications and switching.
Construction of the line was completed on schedule and power is expected to be supplied
via the line shortly.  Power via the new connection will be less that half of the
price of the previous supply and significantly more reliable, reducing downtime 
and equipment damage caused by outages and instability, and is an essential step
in the ongoing upgrade of the Company’s existing operations.

> **Nick Bridgen, Ferro-Alloy Resources CEO, commented:**
> “The completion of the second stage of the Initial Investment from Vision Blue
> allows us to continue to make fast progress on expanding our existing vanadium
> concentrate processing operation and to expand the scope and upgrade the quality
> of the ongoing feasibility study
> “Importantly, we are delighted to have Sir Mick Davis as our Chairman. His experience,
> knowledge and relationships in the mining industry will be hugely beneficial to
> us.
> “I also welcome Peet Nienaber, with his vast technical experience in the vanadium
> industry, to the Board as Non-Executive Director.”

> **Sir Mick Davis, Chairman, commented:**
> “Since Vision Blue’s initial investment in March we have worked closely with the
> team at FAR to identify areas where we can work together to optimise the Balausa
> Project feasibility study to maximise value and reduce development risks. The 
> Balausa Project benefits from low capital and operating costs, good infrastructure,
> geographic advantages and a scale that can match the significantly growing demand
> for vanadium as its use in high grade steel and flow batteries expands. I remain
> convinced about Balausa’s potential to become the leading vanadium asset in the
> world.”

**Further Details**

**Appointment of Sir Mick Davis as Chairman of FAR**

Sir Mick Davis holds a number of directorships at private companies and is a highly
successful mining executive accredited with building Xstrata plc into one of the
largest mining companies in the world prior to its acquisition by [Glencore plc](https://www.directorstalkinterviews.com/ftse-company/glencore-plc/glen.l).
Before listing Xstrata on the LSE as CEO he was CFO of Billiton plc and Chairman
of Billiton Coal which he joined from the position of Eskom CFO.

During his career in mining he has raised almost US$40bn from global capital markets
and successfully completed over US$120bn of corporate transactions, including the
creation of the Ingwe Coal Corporation in South Africa; the listing of Billiton 
on the LSE; the merger of BHP and Billiton; as well as numerous transactions at 
Xstrata culminating in the sale to Glencore plc.

Sir Mick Davis is a Chartered Accountant by profession, and holds an honours degree
in Commerce from Rhodes University, South Africa and an Honorary Doctorate from 
Bar Ilan University, Israel.

**Appointment of Mr Peet Nienaber as Non-Executive Director:**

Mr. Peet Nienaber has several decades of experience in the mining sector, most notably
spending over 24 years with what became Xstrata plc. At Xstrata he was initially
Head of Operations, spearheading the earliest days of the company, including its
growth to be the largest producer of Ferrochrome. Thereafter he spent 10 years as
CEO of Xstrata Alloys, one of the largest producers of Ferrochrome and a leading
producer of Vanadium, with some 20,000 people under Peet’s leadership.  After retiring
from the position in 2012, Xstrata Alloys subsequently went on to be acquired by
Glencore plc.

Mr. Nienaber began his career as an engineer at Iscor Ltd before spending several
years in the Ferroalloys industry at Samancor and [Anglo American Plc](https://www.directorstalkinterviews.com/ftse-company/anglo-american/aal.l).

Mr. Nienaber holds a BSc in Metallurgical Engineering and a BSc in Engineering from
the University of Pretoria.

**Appointment of Mr Christopher Thomas as Non-Executive Director:**

Chris Thomas will assume the role of Non-Executive Director upon Sir Mick Davis’
appointment as Chairman.

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