Bushveld Minerals definitive agreement for the acquisition by Southern Point Resources
AIM-listed Bushveld Minerals, the integrated primary vanadium producer, has entered into a definitive agreement for the acquisition by Southern Point Resources – Fund 1 SA L.P., represented by its general partner SPR GP1 (SPRF), of 50% of the issued shares of Bushveld Vanchem (BV), which owns the Vanchem vanadium processing plant (Vanchem), for an acquisition price of some US$21.3 million.
The purchase by SPR (or an SPR affiliate) of Bushveld’s 64% equity interest in a subsidiary that owns the Mokopane Vanadium project for US$3.7 million, which was announced on the same date, remains on track.
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
“We are pleased to be announcing a definitive agreement on another piece of the overall US$69.5-US$77.5 million funding package first announced in September. We look forward to working closely with our new partners at Vanchem to unlock value in this significant asset. We hope to announce further progress on the overall funding package in the coming weeks and months.”
Background
On 11 September 2023, the company announced that it had entered into a binding term sheet with SPR GP1 Proprietary Limited (SPR) regarding a proposed package of inter-conditional transactions which, if successfully concluded, would provide a cumulative investment by SPR (and its affiliates) into Bushveld and its group companies of between US$69.5 – US$77.5 million. The SPR investment was agreed to be structured as follows:
· An interim working capital facility, totalling R150 million (~US$8.1 million) (the SPR Facility).
· The transaction which the company announces that BV has entered into with SPRF, and the Mokopane Acquisition.
· An equity investment by SPR of ~US$12.5 million into the Company (the SPR Investment Agreement).
· A new marketing and sales arrangement under which SPR will be appointed to carry out all marketing and sales of product for Bushveld with effect from January 2025. In line with this arrangement, SPR will provide a medium-term trade finance working capital facility to the Company, totalling ~US$25-30 million.
· A future commitment by SPR of an investment of US$7-10 million in Vanchem for the recommissioning of Kiln-1.
