Aim-listed Ironveld has advised that widely reported regional flooding in Limpopo, South Africa, has temporarily impaired site access and operational activities at the Lapon iron-ore, vanadium and titanium mine.

Flooding has also impacted on the company’s dense media separation (DMS) processing plant, which Ironveld holds in joint venture with Sable Platinum Holdings.

The plant’s contractor, Daemaneng, is preparing to mobilise resources to start dewatering the Lapon pit and will perform the necessary repairs to restore full site accessibility.

Subject to further weather conditions, Ironveld expects its operations to return to normal within one month.

To mitigate the risk of extreme weather events in future, Ironveld has completed a comprehensive water management infrastructure design process, with infrastructure due to be operational from the second quarter.

Moreover, Ironveld confirms that a trial with a potential offtake client will proceed in the second quarter owing to the operational impact of regional flooding. The company intends to formalise an agreement to supply 1 000 t of DMS-grade magnetite and ultimately reach a more substantial yearly offtake agreement.

Additionally, Daemaneng has completed a second fully paid trial delivery of DMS-grade magnetite to an established South African client, which has indicated a potential offtake capacity of 5 000 t a month.

In respect of run-of-mine (RoM) offtake, Daemaneng has successfully concluded commercial terms for a significant offtake agreement with a South African client for an initial 25 000 t trial of RoM unprocessed ore from the Lapon mine, supported by a R3-million prepayment.

There is potential for the offtake agreement to evolve into a 12-month contract.

Daemaneng is also advancing discussions with a German trading house, which may secure the entirety of Lapon’s RoM output. The envisaged arrangement would follow a phased implementation plan, with offtake volumes scaling progressively to a target of up to 300 000 t a month.

The trading group has proposed financial and strategic support to facilitate the operational scale-up of Lapon to achieve these targeted volumes.

The same group has also expressed an interest in the DMS-grade magnetite product, with an indicated demand profile that exceeds the current planned production capacity of the DMS plant.

Ironveld CEO Kris Andersson comments that while the immediate logistical and operational impact of the recent flooding is acknowledged, the strategic outlook for the company is overwhelmingly positive.

“The advanced discussions for our entire projected RoM output highlight a commercial opportunity greater than initially anticipated. The proposed long-term offtake framework envisions a gradual, multi-phased ramp-up to a target volume of 300 000 t a month, which would be achieved over time.

“The specific proposal to provide both strategic and financial backing to Daemaneng for the operational scale-up demonstrates a high degree of commitment and validates the strategic value of the magnetite ore from Lapon,” he states.

Alongside this, the sustained interest in Ironveld’s DMS-grade magnetite highlights the strong market demand as well as providing clear commercial validation for its assets.

“Our priority is now to advance these parallel discussions to formal agreements. We look forward to updating shareholders on the progress being made to commercialise both our RoM and DMS product streams, which together form a compelling and diversified growth strategy for Ironveld,” Andersson states.

Meanwhile, Ironveld says its results for the 2025 financial year will be published by the end of February, which will allow Ironveld’s shares to resume trading. The company’s shares were suspended from trading on January 2 owing to a delay in publishing its audited financial results for the financial year ended June 30, 2025.

The delay was owing to extra time needed for auditors to complete procedures related to operations in South Africa.