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Why, oh why, Is Ironveld turning down Richard Jennings funding offer?

By Tom Winnifrith | Monday 11 July 2022


The latest spat involving Richard "nobody likes me and I don't care" Jennings of Align Research, is with AIM hound, Ironveld Resources (IRON). Inexplicably, Jennings has offered Ironveld money at 1p. Even more inexplicably, Ironveld has said no, forgetting that beggars cannot be choosers. Jennings has fired off the letter below, which is, as you'd expect, forthright and menacing.

Dear shareholders

We present below the full email detailing the terms of our offer made to the company on the 3rd July and that despite verification on the company’s part of Align’s, my personal commitment and other FCA reg 3rd parties participation that collectively have funded many companies to the tune of many millions was not accepted by the company. 

We await keenly the forthcoming GM and suggest that should the company attempt to proceed with the flagged placing per their RNS of 29 June 2022 that shareholders make their position on this matter clear with a vote IN FAVOUR of the removal of Eales and Clarke. Our proposal was designed to give the company a chance to get the smelter into production and raise the equity value to a realistic level once again protecting ALL shareholders.

Dear Martin

Please see below overview terms for a minimum £3m funding package for Ironveld on standard brokerage and palatable debt terms considering the current market backdrop and that is much, much less damaging to Ironveld shareholders than the contemplated placing at market (let alone a discounted one)  and that brought about the GM requisition by me in order to protect my and Align’s interests and by extension all other IRON shareholders.


1 – Equity raising – £1m

1p equity raise for £1m at the 1 pence level for which I have solid commitments from selected existing shareholders and will be participating £250k through Align/myself.

Attached to this a 3 for 2 warrant instrument with a 3 year life and a strike of 1 pence. Terms of the warrant instrument that if there is a further equity raise in the subsequent 12 months at a price lower than 1p then the warrants reset in price and volume. Vice versa, should the shares trade over 1.5p bid side for a minimum of 20 trading days and an aggregate volume of 150m shares during this period then the warrants be converted automatically or lost.

Standard placing fee of 5% payable to Align on those elements introduced by it with the option to assign this fee pro rata to participees

Confirmation that outstanding directors loans and any accruals be converted on same terms (as partially committed to already)

Broker option offered to existing shareholders on same terms (less placing fee of course) of upto £500k 

2 – Debt funding – £2m

£2m of funding drawable over 9-12 months (we will work with u ref the smelter refurb requirements). Repayment Aug 1 2024. Coupon 12% p.a. – payable at the end of the term in shares at 1p level or cash (Lenders election)

Attached to this warrants to the value of £2m with a 3 year life and strike of 1p. Terms of the warrant instrument that if there is a further equity raise during the term of the loan at a price lower than 1p then the warrants reset in price and volume.

Prepayment option at any time/non draw with no penalties

Should warrant exercises occur during the loan term/before prepayment then this sum nets against the debt

Warrants issued 100% on loan signatory. should the shares trade over 2p bid side for a minimum of 20 trading days and an aggregate volume of 220m shares during the loan term then the warrants be converted automatically or lost.

Arrangement fee of 3% and customary subsidiary cross guarantees ref the loan.

Plse note – both elements are open for participation by TPI clients/management/Tracarta too should u/they see merit in IRON’s prospects.

These terms provide for an immediate injection of @ £950k (net of the placing fee) to enable the company to complete the initial smelter acquisition purchase cost of £750k. Taking your comments to the wider market per here – “Ironveld has planned a refurbishment work programme for the smelter facility of up to nine months, costing ZAR 40 – 65 million (approximately GBP2.0 – 3.2 million)”, the debt funding provides for the majority of this. You have made the case in your statement of the 24 May that u anticipate sales within the first 12 months. Should u successfully execute the refurb and offtake and sales then any modest supplementary raise of upto £1-1.5m would be much less dilutory and damaging and in all likelihood come from a much higher equity base than we sit with now. The simple metrics are the net cost of the debt is £270k (before tax relief too) against a decimation/equity reset of market cap of @ £7m based on current and expanded share count incorporating the equity placing element.

These terms thus provide all the following benefits:

1 – Dispenses with the GM (subject to GC’s resignation which I still require and many shareholders too given his presiding over IRON for several years with millions spent and no progress on the project)

2 – Provides immediate capital that covers the initial payment fee & not requiring authority at a GM

3 – Leaves the door open for Grosvenor should the lending institution referenced to me provide the funding

4 – Allows for existing shareholders to participate through the broker option on the attractive equity and warrant package

5 – Potentially converts the £2m debt into equity ref warrant exercises during the term,

6 – Potentially provides for a min further £1.5m in warrant exercises at the 1p level taking us closer to the original £5m funding from Grosvenor

Should this offer be refused please note that I intend to go public with it so that all IRON shareholders can decide their voting at the forthcoming GM from a fully informed position in partic ref the disapplication of stat pre-emption rights and having their veritable “knees cut off” completely.

I look forward to hearing from you and the BoD acting in ALL our interests.

Richard Jennings

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