TIDMBMN
RNS Number : 5723X
Bushveld Minerals Limited
22 February 2017
BUSHVELD-SUPPORTED ACQUISITION OF BEE SHAREHOLDING IN EVRAZ
VAMETCO HOLDINGS
22 February 2017
Bushveld Minerals Limited
("Bushveld Minerals" or "the Company")
Bushveld Minerals Limited (AIM: BMN), a diversified mineral
development company with projects in South Africa and Madagascar,
is pleased to announce in connection with its proposed acquisition
of Vametco Holding (Pty) Limited ("Vametco"), it has agreed to
facilitate a change in the ownership of one of Vametco's Black
Economic Empowerment ("BEE") partners. Bushveld Minerals has agreed
terms with Jaxson 640 (Pty) Limited ("Jaxson 640") to support
Jaxson 640's acquisition of a controlling interest in the BEE
shareholdings in Vametco (the "Jaxson Transaction"). The Jaxson
Transaction will take place alongside Bushveld Vametco Limited's
proposed acquisition of a 78.8% interest in Strategic Minerals
Corporation ("SMC") from the Evraz Group S.A ("Evraz") currently
underway (announced on May 2016 and further on 25 July 2016).
Under the terms of the signed Jaxson Transaction:
a) Jaxson 640, a qualifying BEE company in accordance with the
Broad Based Economic Empowerment Act of South Africa, has agreed
conditionally to acquire an effective 21.2% in Vametco from a
consortium led by Avacap (Pty) Limited (the "Seller" or "Avacap
Consortium") for a consideration totalling an estimated ZAR 47
million, as follows:
-- Jaxson 640 has agreed conditionally to acquire 100% of the
shares in Marble Gold (Pty) Limited, a company owned by the Seller
which owns a 70% interest in Business Ventures Investments Holdings
973 (Pty) Limited ("BVI 973"), which in turn owns 15% of Vametco.
The 15% interest in Vametco will increase to 16% pursuant to a sale
of an additional 1% of Vametco by SMC to BVI 973 in fullfilment of
its mining right obligations; and
-- Jaxson 640 has further agreed conditionally to acquire 100%
of the shares in Oakleaf Investments Holdings 115 (Pty) Limited
("Oakleaf 115"), a company owned by the Seller which owns a 100%
shareholding in Business Ventures Investments Holdings No 1833
(Pty) Limited ("BVI 1833"), which in turn owns a 10% shareholding
in Vametco;
b) Furthermore, Jaxson 640 has signed a Deed of Adherence
undertaking to be bound by all the BEE agreements underpining
Vametco Holdings' New Order Mining Right;
c) The Jaxson Transaction is subject to several conditions, including:
-- The completion and implementation of Bushveld Vametco's
acquisition of SMC, a condition that cannot be waivered without the
consent of Evraz;
-- Bushveld Minerals entering into a Deed of Settlement and
Undertaking in terms of which Bushveld Minerals will provide vendor
financing for the settlement of all funding amounts in respect of
the BEE shareholding held by BVI 1833, including a ZAR 1.25 million
share in all upside realised by Avacap Consortium under the Jaxson
Transaction. The funding amounts to be settled comprise all
demonstrable funding advanced in respect of the acquisition of the
BEE shareholding by the Avacap Consortium in BVI 1833 amounting to
a total sum of an estimated ZAR 6.3 million; and
-- Consent to the transaction from the funding bank in the
Avacap Consortium's original acquisition of BVI 973 BEE shares that
Jaxson is taking over;
-- Regulatory consent to the transaction from the Department of
Mineral Resources in terms of Section 11 of the Mineral and
Petroleum Resources Development Act .
d) Jaxson 640 undertakes to be bound by all the agreements
relating to the funding advanced to BVI 973 and Oakleaf 115 for
purposes of acquiring the BEE shareholding in Vametco; and
e) The consideration of approximately ZAR 47 million comprises a
cash payment of approximately ZAR 7.4 million to the Avacap
Consortium and the assumption of all the debt financing of
approximately ZAR 39.5 million by the BEE shareholding
structure.
Bushveld Minerals' support to Jaxson 640 in respect of the
Jaxson Transaction comprises of the following:
a) Bushveld Minerals' agreement to enter into a Deed of
Settlement and Undertaking, whereby it agrees to settle all funds
owing to the lender in respect of the BEE shareholding held by BVI
1833; and
b) Bushveld Minerals' agreement to support Jaxson 640 in its
efforts to raise finance for the consideration of approximately
ZAR7.4 million to be paid to the Avacap Consortium for the
acquisition of the Avacap Consortium's interest in the Vametco BEE
shareholding structure.
Jaxson 640 is led by Bill Chipane, a succesful investment
professional with more than ten years in the mining industry. Mr
Chipane is well known to Bushveld Minerals and has been a
consultant to the group for some time, providing advice in
connection with our M&A strategy and transactions. Negotiations
between Bushveld Minerals and Jaxson 640 have been conducted and
agreed on arm's length terms.
Jaxson 640 will also include a shareholding for a Trust focused
on empowering HDSA women and youth in the communities that Vametco
operates, with particular emphasis on education, entrepreneurship
and enterprise development.
The diagrams below illustrate the structure of Vametco Holdings
pre- and post the Jaxson Transaction:
Link to Figure 1 - Pre-Transaction Structure
http://www.rns-pdf.londonstockexchange.com/rns/5723X_-2017-2-22.pdf
Link to Figure 2 - Post-Transaction Structure
http://www.rns-pdf.londonstockexchange.com/rns/5723X_1-2017-2-22.pdf
Fortune Mojapelo, CEO of Bushveld Minerals, commented:
"We are pleased to welcome Jaxson 640 as our BEE partner of
choice in Vametco Holdings. Jaxson is led by Mr Bill Chipane, a
succesful investments professional with more than ten years in the
mining industry. Jaxson 640 will also include a shareholding for a
Trust focused on empowering HDSA women and youth in the communities
that Vametco operates, with particular emphasis on education,
entrepreneurship and enterprise development. The involvement of the
communities through a Community Trust presents an opportunity to
pro-actively ensure that the economic interest in Vametco Holdings
dedicated to local communities can be applied in a proactive and
strategic manner that delivers measurable and sustainable economic
benefits for the communities concerned. We look forward to our
collaboration with our future BEE partner as well as the
professional and local community representatives."
Enquiries:
info@bushveldminerals.com
Contact:
Bushveld Minerals
Fortune Mojapelo
+27 (0) 11 268 6555
Strand Hanson
Andrew Emmott
+44 (0) 20 7409 3494
Beaufort Securities
John Belis
+44 (0) 20 7382 8300
SP Angel
Ewan Legatt
+44 (0) 20 3470 0470
Blytheweigh
Tim Blythe/Camila Horsfall
+44 (0) 20 7138 3204
Gabriella von Ille
+27 711 121 907
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
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 includes the 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
ACQUUSURBVAUUAR
(END) Dow Jones Newswires
February 22, 2017 07:50 ET (12:50 GMT)