Aim-listed Ironveld’s 74%-owned subsidiary Lapon Mining has entered into a binding mining operations agreement with South African mining and contracting company Daemaneng Minerals, which will assume responsibility for all mining operations, including all capital and operational expenditure at the Lapon site, in South Africa’s Limpopo province, for a five-year period.

This would include investment, operating costs, logistics, labour, compliance and the establishment of on-site processing infrastructure – thereby eliminating any future mining-related expenditure for Lapon Mining.

The arrangement effectively transfers operating and funding obligations to Daemaneng, de-risking Ironveld’s cost base while allowing Ironveld to retain its full ownership and control of the mining licence and governance oversight, the company avers.

Based on currently anticipated production levels, Daemaneng is expected to fund about R500-million of capital and operational costs at Lapon and will recover verified expenditure from the proceeds from realised sales of mined material, ensuring that returns are aligned with production performance.

No equity participation or ownership interest in Lapon Mining or any other Ironveld entity will accrue to Daemaneng under the terms of the agreement.

Daemaneng is contractually obligated to supply all ore required by Ironveld’s JV dense media separation (DMS) plant, irrespective of volume or demand levels with no upper limit on supply volumes.

The operator must meet all ore requirements necessary to sustain continuous production, ensuring a fully reliable and scalable supply chain to support Ironveld’s downstream processing operations and future production growth.

The partnership establishes an additional and strategically valuable income channel through the commercialisation of run-of-mine (RoM) material, complementing Ironveld’s DMS-grade magnetite production.

Under the terms of the agreement, Daemaneng is contractually obligated to secure and manage all offtake agreements for the RoM material, ensuring continuous market access and sustainable revenue generation from the Lapon operations.

Mining operations under Daemaneng will start shortly, with Daemaneng now fully responsible for achieving all production volumes and quality standards in line with market requirements, contractual obligations and agreed performance parameters.

“This agreement marks a defining moment in Ironveld’s transformation and the first tangible step in pivoting the company towards delivering a company focused on revenue generation, risk mitigation and the realisation of the significant inherent value within our assets,” Ironveld CEO Kris Andersson says.

“The partnership with Daemaneng establishes a performance-based framework that is mutually beneficial and commercially aligned. Its structure ensures that mining costs are minimised to maximise profitability, Daemaneng’s upside is driven entirely by operating efficiently, mining cost-effectively, and marketing material at the most competitive prices.

“By engaging an established and operationally experienced partner, we are unlocking immediate production at Lapon without further capital outlay. The agreement removes the majority of mining-related expenditure from our balance sheet while introducing a new revenue stream through RoM sales, enabling Ironveld to benefit directly from production upside without operational exposure or financial risk.

“Daemaneng’s familiarity with the Lapon site, combined with their investment commitment and established offtake channels, gives us confidence that operations will ramp up rapidly and profitably. With no opex or capex commitments in mining, Ironveld is now a leaner, significantly de-risked business, well positioned for sustainable growth and long-term shareholder value creation,” Andersson says.