TIDMBMN
RNS Number : 6572A
Bushveld Minerals Limited
13 September 2018
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
13 September 2018
Bushveld Minerals Limited
("Bushveld " or the "Company")
Acquisition of Sojitz interest in Strategic Minerals
Corporation
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated
primary vanadium producer, with ownership of high grade vanadium
assets, is pleased to announce that it has today completed the
acquisition of a 21.22 per cent interest in Strategic Minerals
Corporation ("SMC"), an intermediate holding company of Vametco
Alloys Proprietary Limited, "Vametco") from Sojitz Noble Alloys
Corporation ("Sojitz") for a total cash consideration of
US$20,000,000 (the "Acquisition"). On completion of the
Acquisition, Bushveld has increased its indirect beneficial
interest in Vametco from 59.1 per cent to 75 per cent.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"This Acquisition is a significant achievement as it fulfils the
Company's undertaking to simplify its corporate structure in order
to increase exposure to the underlying cash flows at Vametco.
Vametco's strong cash generation capabilities are demonstrated by
the Revenue and EBITDA generated in H1 2018 of ZAR 1,050 million
and ZAR 521 million an increase of 139.1% and 429.6% respectively,
compared to H1 2017.
"The transaction is in line with our priorities laid out earlier
this year as part of the US$22 million placing and sets the Company
in an advantageous position to deliver on its strategy to grow into
a significant, low-cost vertically integrated vanadium
platform."
Acquisition Highlights
-- The Company has acquired all of Sojitz' shareholding interest
and accompanying rights in SMC, the 75 per cent owner of Vametco,
for a total consideration of US$20,000,000 (twenty million US
dollars).
-- The US$20,000,000 consideration payable comprises:
o US$17,500,000 in cash (seventeen million five hundred thousand
US dollars) for the sale shares; and
o US$2,500,000 in cash (two million five hundred thousand US
dollars) in full and final settlement of accrued but unpaid
dividends on the sale shares;
-- The Sojitz shareholding in SMC is acquired free from all
claims, liens, equities, charges, encumbrances and adverse rights
of any description, and together with all rights attaching thereto,
accrued or contingent.
-- Following completion of the transaction Bushveld, through
wholly owned Bushveld Vametco Limited, will own 100 per cent of SMC
and therefore have an indirect beneficial interest of 75 per cent
in Vametco.
-- Bushveld used its existing cash resources to complete the Acquisition.
Rationale for the Acquisition
The Acquisition increases the Company's see-through controlling
interest in Vametco from 59.1 per cent to 75 per cent. The
Directors believe that the Acquisition will benefit the Company and
its shareholders for the following reasons:
-- Increased exposure to vanadium, a commodity with compelling fundamentals:
o Robust and growing demand from steel manufacturers and energy
storage;
o A significant structural supply deficit due to concentrated
and constrained primary production; and
o Limited new global vanadium production on the horizon.
-- The vanadium price has enjoyed a strong performance recently,
seeing a cumulative price increase of over 200 per cent in the last
12 months, with the 2018 year to date average price of US$70/KgV
(source: Metal Bulletin);
-- Vametco is a high grade, low-cost, open-cast and simple
mining proposition with access to brownfield processing
infrastructure. Vametco is one of only three producing primary
vanadium operations globally;
-- Increased exposure to Vametco's underlying cash flows.
Bushveld now own a 75 per cent shareholding in Vametco, with the
Black Economic Empowerment partner and the Community partnership
being the only minority interest, with an ownership of 25 per
cent;
-- Vametco enjoys a significant 3 per cent share of the global
vanadium market which is targeted to grow to more than 5 per cent
in the medium term, supported by one of the largest primary
vanadium resource bases in the world (under the ownership of
Bushveld);
-- Vametco has the potential to diversify its product range beyond its Nitrovan(TM) product;
-- The Acquisition is in line with the Company's stated
intentions at the time of its US$22 million placing in March 2018,
to use part of the proceeds to simplify Bushveld's organisational
and corporate structure to improve Bushveld's exposure to the
underlying cash flows of its assets; and
-- The Acquisition is further aligned with the Company's plans
in the global energy storage space by providing capacity for
potential electrolyte manufacturing.
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance Nominated Adviser +44 (0) 20 3470
LLP & Broker 0470
Ewan Leggat
Richard Morrison
Alternative Resource Capital Joint Broker
+44 (0) 207 186
Rob Collins 9001
+44 (0) 207 186
Alex Wood 9004
Tavistock Financial PR
+44 (0) 207 920
Charles Vivian / Gareth Tredway 3150
Lifa Communications Financial PR (South
Africa)
+27 (0) 711 121
Gabriella von Ille 907
ABOUT BUSHVELD MINERALS LIMITED
Bushveld is a low cost, integrated, primary vanadium producer,
with ownership of high grade vanadium assets.
The Company's flagship vanadium platform includes a 75 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; the Mokopane
Vanadium Project and the Brits Vanadium Project.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through owning high grade
assets. This incorporates development and promotion of the role of
vanadium in the growing global energy storage market through
Bushveld Energy Ltd, the Company's energy storage solutions
provider. Whilst the demand for vanadium remains largely anchored
in the steel industry, Bushveld believes there is strong potential
for an imminent and significant global vanadium demand surge from
the fast-growing energy storage market, particularly through the
use and adoption of Vanadium Redox Flow Batteries.
While the Company's focus is on vanadium operations and the
development and promotion of VRFBs, it has additional investments
in coal, power and tin.
The coal platform comprises the wholly-owned Imaloto Coal
Project, which is being developed as one of Madagascar's leading
independent power producers. The Company's tin interests are held
through its shareholding in AIM listed AfriTin Mining Limited.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they are
insufficient to secure capital to bring them to account. A clear
path to production within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. This philosophy is core
to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com
About Vametco
Vametco is located near Brits on the Western Limb of the
Bushveld Complex. The integrated operation comprises a vanadium ore
mine and a processing plant that produces Nitrovan(TM) , a
trademark product sold in major steel markets across the world. The
mine lies adjacent to the Brits Vanadium Project, which will in
future serve as an alternative source of near surface run of mine
(ROM) ore feed to the Vametco plant.
The Vametco mining operation uses open pit bench mining methods
to mine a well-defined orebody. The deposit is continuous with
limited faulting and dips in a northerly direction at approximately
19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing
circuit, followed by milling and magnetic separation to produce
magnetite concentrates. The magnetite concentrates are fed into the
extraction process which includes the kiln for roasting followed by
leaching and precipitation. Thereafter the precipitated vanadium as
ammonium metavanadate is converted to modified vanadium oxide (MVO)
in rotary calciners. MVO is fed into the mixplant and finally into
the shaft furnaces to produce Nitrovan(TM) .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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