Bushveld to acquire Vametco at lower price

JOHANNESBURG (miningweekly.com) – Aim-listed BushveldMinerals and Evraz Group have agreed on amendments to the terms of the share purchase agreement for the acquisition by Bushveld Vametco of Evraz’s Strategic Minerals Corporation (SMC), resulting in the purchase price reducing from $17.2-million to $16.4-million.

Bushveld and financing partner Yellow Dragon, which established the 45:55 Bushveld Vametco special purpose vehicle to acquire the Vametco assets, were also finalising working capital and net debt adjustments.

The parties also agreed to combine the initially planned tranche one and two payments into a single stage transaction, which is now scheduled to be completed on or before March 31, about three months earlier than the previous long-stop date of July 15, 2017.

Bushveld will pay an additional S$646 000 as security for completion, which, together with the exclusivity fee and completion security fee paid to date of $1-million in aggregate, will be offset against the final purchase price.

Bushveld Vametco will be assigned a seat on the board of Strategic Minerals Corporation (SMC), a holding company for the group of companies that own Vametco, with observer status, up to transaction completion.

"We remain focused on completing the 78.8% interest acquisition in SMC as planned.

“Not only does the amendment ensure a reduced purchase consideration and an incentive to complete earlier than scheduled, but it also allows us to finance the entire acquisition as single package and eliminates any risk of partial completion of the transaction.

“Moreover, the revised structure ensures that, at $1.6-million, much less cash is tied up in the transaction over a period in which Bushveld would have held a minority position in SMC pending completion of the entire transaction, Bushveld CEO Fortune Mojapelo said on Monday.