Bushveld signs BEE deal to complement Vametco acquisition

JOHANNESBURG (miningweekly.com) – Aim-listed Bushveld Minerals has agreed to facilitate a change in the ownership of one of Evraz Vametco's black economic empowerment (BEE) partners.

Bushveld will support Jaxson 640's acquisition of a controlling interest in the BEE shareholdings in Vametco, which will take place alongside its own proposed acquisition of a 78.8% interest in Strategic Minerals Corporation (SMC) from Evraz Group.

Under the terms of the transaction, Jaxson 640 will acquire an effective 21.2% in Vametco from a consortium led by Avacap for R47-million.

This will include the acquisition of 100% of the shares in Marble Gold, a company owned by the seller, which owns a 70% interest in Business Ventures Investments Holdings 973 (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% in Vametco by SMC to BVI 973 in fulfillment of its mining right obligations.

Jaxson 640 has further agreed, conditionally, to acquire 100% of the shares in Oakleaf Investments Holdings 115 (Oakleaf 115), a company owned by the seller, which owns a 100% shareholding in BVI No 1833 (BVI 1833), which, in turn, owns a 10% shareholding in Vametco.

Bushveld CEO Fortune Mojapelo said the company was pleased to welcome Jaxson 640, led by Bill Chapane, as its BEE partner.

Jaxson 640 will also include a shareholding for a trust focused on empowering historically disadvantaged women and youth in the communities in which Vametco operates, with a particular emphasis on education, entrepreneurship and enterprise development.

“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,” said Mojapelo.

The transaction is subject to a number of conditions, including the completion and implementation of Bushveld Vametco's acquisition of SMC, a condition that cannot be waived without the consent of Evraz.

Bushveld will also need to enter into a deed of settlement and an undertaking in terms of which it will provide vendor financing for the settlement of all funding amounts in respect of the BEE shareholding held by BVI 1833, including a R1.25-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 R6.3-million.

The transaction is also subject to regulatory consent by the Department of Mineral Resources in terms of Section 11 of the Mineral and Petroleum Resources Development Act.