TIDMBMN
RNS Number : 6115S
Bushveld Minerals Limited
07 November 2019
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.
7 November 2019
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Vanchem Acquisition Completed
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer, with ownership of high grade vanadium
assets in South Africa, is pleased to announce that all outstanding
conditions relating to the Vanchem Acquisition, initially announced
on 1 May 2019
(https://polaris.brighterir.com/public/bushveld_minerals/news/rns/story/x2qeqlx),
have been fulfilled.
Bushveld Minerals has therefore acquired, through its wholly
owned South African subsidiary, Bushveld Vanchem Proprietary
Limited ("BV"):
-- the Vanchem Plant from Vanchem Vanadium Products (Pty)
Limited ("VVP"), a subsidiary of Duferco Vanadium Investment
Holding S.A.;
-- South African Japan Vanadium Proprietary Limited ("SAJV"), a
wholly owned subsidiary of VVP (together with the Vanchem Plant,
the "Vanchem Business"); and
-- Through Bushveld Minerals Limited, 100 per cent of the issued
shares in Ivanti Resources (Pty) Limited ("Ivanti") from Duferco
Participations Holding S.A ("Duferco").
As previously notified on 23 October 2019, the total
consideration for the acquisition was reduced from US$68 million to
US$53.5 million, of which US$30.5 million was payable in cash
(US$30 million on closing and US$0.5 million after two years) and
the balance (US$23.0 million) would be satisfied through the issue
of Bushveld Minerals unsecured convertible loan notes. The Company
is pleased to announce that:
-- The US$30 million cash payment has been made by Bushveld
Minerals and VVP has confirmed receipt thereof;
-- The US$23.0 million Bushveld Minerals unsecured convertible
loan notes have been issued by the Company to Duferco, which has
confirmed receipt thereof; and
-- A further cash payment of US$0.5 million, plus an amount
equal to the working capital adjustment of the Vanchem Businesses,
will be made after two years.
Accordingly, all conditions to closure of the transaction have
been fulfilled and the Company has taken operational control of the
Vanchem Business and Ivanti.
BV has taken over VVP's existing senior production team, which
will provide operational stability while Vanchem is integrated into
Bushveld Minerals. André Strydom has been appointed General Manager
of Vanchem. André brings over 18 years of mining and beneficiation
experience, most recently as the General Manager of the Sadiola and
Yatela mines operated by AngloGold Ashanti, a role he held since
2012.
The Company will now refine its plans for the refurbishment
programme and update the market once its detailed assessment is
complete.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"We are delighted to announce the successful completion of the
acquisition of the Vanchem assets and Ivanti shares as this is a
transformational acquisition and represents a significant step in
the execution of the Company's strategic plan.
I want to take this opportunity to welcome André Strydom and the
Vanchem management team to Bushveld Minerals. The Vanchem team will
complement the Vametco team's skills and knowledge, which will
support cross-pollination of vanadium expertise and experience, as
well as unlock multiple synergies across Vametco, Vanchem and
Mokopane.
The acquisition places the Company in an advantageous position
to offer an attractive and diverse suite of vanadium products
capable of servicing the steel and chemical sectors and the
burgeoning energy storage market.
We are now able to fine tune the plan for these assets and then
provide, in due course, a comprehensive strategy to our
stakeholders.
As we come towards the end of 2019, we have laid the groundwork
for a strong 2020, which will see Bushveld Minerals strengthening
its competitive position as the leading vertically integrated
primary vanadium producer."
Enquiries: info@bushveldminerals.com
Bushveld Minerals Limited +27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance
LLP Nominated Adviser & Broker +44 (0) 20 3470 0470
Richard Morrison / Stephen
Wong
Abigail Wayne / Richard Parlons
BMO Capital Markets Limited Joint Broker +44 (0) 20 7236 1010
Tom Rider / Michael Rechsteiner
Neil Elliot
Peel Hunt LLP Joint Broker +44 (0) 20 7418 8900
Ross Allister/ James Bavister
David McKeown
Tavistock Financial PR +44 (0) 20 7920 3150
Charles Vivian / Gareth Tredway
Brunswick Financial PR (South Africa) +27 (0) 11 502 7300
Miyelani Shikwambana
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, integrated, primary vanadium
producer, with ownership of high-grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; 100 per cent of
Bushveld Vanchem, a primary vanadium processing facility with a
beneficiation plant; 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. Whilst the demand for vanadium remains largely anchored in
the steel industry, Bushveld Minerals 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.
Bushveld Energy, the Company's energy storage solutions provider,
plays a leading role in the development and promotion of the role
of vanadium in this market.
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 Company's approach to project development recognises that,
whilst attractive project economics are imperative, they may be
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 Vanchem
The Vanchem Business is a primary vanadium producing facility
with a beneficiation plant capable of producing various vanadium
oxides, ferrovanadium and vanadium chemicals. The Vanchem Business
uses the salt roast beneficiation process, similar to the one used
at Vametco. Following a refurbishment and ramp-up schedule, which
is estimated to require approximately US$45 million of capital
expenditure, which will be incurred over a five-year period, it is
expected to reach steady state production of 4,200 mtV per annum
utilising all three kilns. The plant consists of the following
components:
-- Milling and concentrator (magnetic separation) facility for the treatment of magnetite;
-- A roast / leach configuration with three kilns;
-- An ammonium poly-vanadate precipitation plant;
-- A de-ammoniation / vanadium trioxide plant;
-- Vanadium pentoxide flake (V(2) O(5) ) production facilities;
-- Two conversion facilities (an electric smelting facility and
an aluminothermic smelting facility) for the production of
ferrovanadium; and
-- A vanadium chemical plant producing various vanadium chemical products.
The Vanchem Plant is situated at Ferrobank Industrial Park in
Emalahleni Local Municipality, Mpumalanga Province in the Republic
of South Africa and has been operating since the late 1970s,
processing a combination of ore feed from the Mapochs vanadium mine
("Mapochs") and slag from Highveld. Highveld continued to supply
ore to VVP from its Mapochs mine in Limpopo until it closed in
2015. The closure of the mine meant that VVP no longer had a supply
of ore and as a consequence, VVP went into Business Rescue in
November 2015. The Vanchem Plant was put into care and maintenance
later that year. The Vanchem Plant was partially re-started in the
third quarter of 2018, after VVP was able to procure magnetite ore
from third parties.
SAJV is located at the Highveld site and is situated
approximately 10 km from the Vanchem Plant. SAJV comprises of an
alumino-thermic smelting facility which is adjacent to the Vanchem
Plant electric smelting facility.
The Vanchem Business has secured sufficient ore supply from
third parties to support current levels of production, until
Mokopane's development has been completed. The Company retains the
optionality to supply magnetite concentrates from Vametco to the
Vanchem Plant. Following receipt of the mining right, Mokopane will
be a primary source of feedstock to the Vanchem Business as a
result of its large mineral reserve, therefore the Transaction
facilitates the expedited development of Mokopane. The
Mokopane-Vanchem model will represent a fully integrated business,
in line with the Company's business model at Vametco.
VVP reported, on an unaudited basis, for the year ended 30
September 2019, profits before tax of R208,292,045 (US$14,499,219)
and had gross assets of R1,405,298,470 (US$92,471,489).
SAJV reported, on an unaudited basis, for the year ended 30
September 2019, profits before tax of R8,285,704 (US$576,768) and
had gross assets of R23,165,992 (US$1,524,369)
.
Ivanti reported on a company basis (which captures the
performance of the Calcine benefits), on an unaudited basis for the
year ended 30 September 2019, profits before tax of R32,639,760
(US$2,272,055) and had gross assets of R92,510,755
(US$6,087,395).
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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