TIDMBMN
RNS Number : 8601B
Bushveld Minerals Limited
06 April 2017
6 April 2017
Bushveld Minerals Ltd
("Bushveld" or the "Company")
Completion of Vametco Acquisition
Bushveld Minerals Limited (AIM: BMN), a diversified mineral
development company with a portfolio of vanadium, titanium, iron
ore, tin and coal assets in Southern Africa, is pleased to announce
that, further to the announcement made on 31 March 2017, Bushveld
Vametco Limited ("Bushveld Vametco") has today completed the
acquisition of a 78.8% shareholding in Strategic Minerals
Corporation ("SMC", the ultimate holding company of Vametco Alloys
Proprietary Limited, "Vametco") from the Evraz Group S.A. ("Evraz")
(the "Acquisition").
Acquisition Highlights
-- The US$16.466 million consideration paid is substantially
less than the cost of a greenfield mine and plant of the same
capacity;
-- Bushveld Vametco financed the acquisition as follows:
I. Exclusivity fee cash payments to Evraz of US$1.646 million;
II. Bridge loan facility of US$11.0 million from The Barak Fund SPC Limited;
III. A US$3.0 million facility from the Financing and Sales and
Marketing Agreement with Wogen Resources Limited; and
IV. A cash contribution of US$820,000 from Bushveld and Yellow Dragon Holdings Limited.
-- The transformational acquisition is in line with Bushveld's
stated strategy to develop a significant, vertically integrated
vanadium platform and accelerate Bushveld's path to production by
several years;
-- The acquisition is further aligned with the Company's
aspirations in the global energy storage space by providing
capacity for potential electrolyte manufacturing.
Vametco Alloys Highlights
Vametco Alloys is a high quality, low cost mine and plant with a
patented vanadium product and a global vanadium customer base. The
property is located 8 kilometres to the Northeast of Brits, in the
North West Province of the Republic of South Africa, and is owned
by SMC through its 75% shareholding in South African domiciled
Vametco Holdings Proprietary Limited ("Vametco Holdings"). Vametco
Alloys is a 100% subsidiary of Vametco Holdings. Key highlights of
the Vametco operations include:
-- Mining right for vanadium and other associated minerals over
Portion 1 of the farm Uitvalgrond 431 JQ and Portion 1 of the farm
Krokodilwaal 426 JQ in Brits, where it operates an open pit mine
supplying ore to its vanadium processing plant located on the same
properties;
-- Ore Reserves of 27Mt (JORC) with some of the highest
in-magnetite vanadium pentoxide (V(2) O(5) ) grades in the world,
averaging of 2.55% vanadium pentoxide in magnetite. The Ore
Reserves are sufficient to support the operations for 24 years at
current production levels;
-- Mineral Resources in excess of 135Mt (JORC) with average
vanadium pentoxide ("V(2) O(5) ") grades of 2.10% vanadium
pentoxide in magnetite;
-- Significant scope to increase the reserve base by targeted
exploration of the inferred resources;
-- Adjacent to Bushveld's Brits Vanadium Project, which is the
continuation of the strike of the Vametco mine's deposit with
similar vanadium grades to the mine. The deposit, which contains
outcropping mineralisation, offers an extension of the life of
operations and presents cheaper near-surface ore for the Vametco
processing plant;
-- Current plant annual capacity of 2,750 metric tonnes vanadium
in the form of Nitrovan and MVO;
-- Scope to materially expand own production capacity within a
short time period from 2,750 to 3,340 tonnes Vanadium per year
through targeted de-bottlenecking interventions at limited capital
expenditure funded from operating cash flows, subject to conclusion
of the necessary feasibility studies;
-- An established leadership team with extensive experience in
vanadium processing, having collectively worked on all vanadium
processing plants in South Africa. The management team is being
retained in the business;
-- One of the cheapest primary producers of vanadium in the
world, realising an all-in cash cost of US$17.33/kgV (US$3.57/lb
V(2) O(5) equivalent) for the year 2015.
-- The low cost position saw Vametco report 2015, revenues of
ZAR629 million and an operating profit of ZAR26,724 in a
constrained economic environment and low vanadium prices (average
2015 market V price was 18.60/kg V). The 2015 closing cash position
for the company was ZAR47 million;
-- The positive performance continued into 2016 with the
operations reporting markedly improved results for the year
headlined by production volume increases to 2,850 mtv. The audited
2016 financial results will be announced to the market once
available; and
-- Owned as to 25% by Black Economic Empowerment shareholders
including the local land owners, with provisions to increase this
to 26%.
Further updates will be provided as appropriate.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, "We are
delighted to finally complete this transformational transaction
which sees Bushveld transition into a significant player in the
global vanadium markte. Vametco is a high quality, low cost
operation with a strong management team that combines extensive
experience in primary vanadium production. We are particularly
pleased to have acquired such a quality operation for what we
believe is a very low price relative to its value in use to
Bushveld. The acquisition marks an exciting new chapter for
Bushveld and provides an important catalytic platform as we
continue our quest to build a large vertically integrated vanadium
platform."
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
Enquiries: info@bushveldminerals.com
Bushveld Minerals Limited
Fortune Mojapelo +27 (0) 11 268 6555
Strand Hanson Limited (Nominated Adviser)
Andrew Emmott / Ritchie Balmer +44 (0) 20 7409 3494
Beaufort Securities (Joint broker)
Jon Bellis +44 (0) 20 7382 8300
SP Angel Corporate Finance (Joint broker)
Ewan Leggat +44 (0) 20 3470 0470
Blytheweigh (Public Relations)
Tim Blythe / Camila Horsfall +44 (0) 20 7138 3204
Gabriella von llle +27 (0) 711 121 907
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a diversified AIM listed mineral
development company with a portfolio of vanadium, iron ore, tin and
coal greenfield assets in Southern Africa and Madagascar. The
Company's flagship platform, the vanadium platform, includes the
Mokopane Vanadium Project, the Brits Vanadium Project, and the
Bushveld Iron Ore & Titanium Project. The tin platform
comprises the Mokopane Tin Project whereas the Imaloto Coal
Project, which is being developed as one of Madagascar's leading
independent power producers, makes up the Company's coal
platform.
The Company's vision is to become the largest low cost
integrated primary vanadium producer through owned low-cost
high-grade assets. This incorporates development and promotion of
the role of vanadium in the growing global energy storage market
through Bushveld Energy, the Company's energy storage solutions
provider. Whilst the demand for vanadium remains largely anchored
in a slow growing steel industry, Bushveld Minerals believes there
is a strong potential for imminent significant global vanadium
demand surge from the fast-growing energy storage market,
particularly through the use and adoption of Vanadium Redox Flow
Batteries.
Bushveld Minerals' 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 with a visible timeframe, low capex requirements
and scalability are important factors in retaining an attractive
exit option. 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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