Bushveld Minerals moves closer to SMC acquisition as it supports BEE deal

JOHANNESBURG (miningweekly.com) – Aim-listed Bushveld Minerals has signed a a deed of settlement and undertaking (DSU) with Gingko Trading and Oakleaf Investments Holdings 115.

Under the DSU, Bushveld will settle all demonstrable funding that Gingko advanced to Oakleaf 115, as part of its acquisition, as a participant in the Avacap Consortium, of a 10% shareholding in Vametco Holdings in 2014.

Oakleaf 115 holds a 10% shareholding in Vametco through its 100% shareholding in Business Ventures Investments (BVI) Holdings.

The DSU has been agreed as part of qualifying black economic empowerment (BEE) company Jaxson 640’s broader acquisition of the Avacap Consortium's interest in Vametco, as announced in February.

Jaxson has agreed conditionally to acquire an effective 21.2% interest in Vametco, from a consortium led by Avacap for R47-million, Mining Weekly Online reported last month.

In February, Bushveld agreed to facilitate a change in the ownership of one of Evraz Vametco's BEE partners and announced that it will support Jaxson 640's acquisition of a controlling interest in the BEE shareholdings in Vametco. This will take place alongside its own proposed acquisition of a 78.8% interest in Strategic Minerals Corporation (SMC) from Evraz Group, Mining Weekly Online reported.

The Jaxson-Avacap transaction is subject to several conditions, including Bushveld entering into the DSU.

Bushveld will provide vendor financing for the settlement of all amounts owing to Gingko in respect of the BEE shareholding held by BVI 1833, including a share in all upside realised by Avacap Consortium under the Jaxson-Avacap transaction.

The Gingko funding amount comprises all demonstrable funding advanced by Gingko in respect of the acquisition of the BEE shareholding by the Avacap Consortium in BVI 1833. The total settlement is estimated at R7.55-million.

Conditions of the Jaxson-Avacap transaction include the completion and implementation of Bushveld Vametco's acquisition of SMC – a condition that cannot be waivered without the consent of Evraz Group South Africa.

Further, consent to the transaction from financial services provider Nedbank, one of the funders of the Avacap Consortium's acquisition of an interest in Vametco in 2014, as well as regulatory consent to the transaction from the Department of Mineral Resources in terms of Section 11 of the Mineral and Petroleum Resources Development Act are among the listed conditions.

Bushveld Minerals noted that the signing of the DSU fulfills a key part of the conditions to the completion of the Jaxson-Avacap transaction.

"The signing of the DSU with Gingko is an important step in the completion of the Jaxson-Avacap agreement and, as such, a further important milestone towards the completion of our acquisition of SMC. We look forward to providing further updates as we conclude the outstanding conditions,” Bushveld Minerals CEO Fortune Mojapelo said in a statement on Tuesday.