Bushveld’s vanadium acquisition financing complete

JOHANNESBURG (miningweekly.com) –  Diversified development company Bushveld Minerals on Thursday took another step towards the creation of an integrated vanadium platform with the signing by Bushveld Vametco of the final financing agreements for the completion of the acquisition of 78.8% of Strategic Minerals Corporation (SMC) from Evraz.

The financial close has been concluded with Barak Fund SPC, with the financing including an $11-million bridge loan facility repayable within two months of drawdown and attracting $939 077 in interest, fees and legal charges. 

The London Aim-listed Bushveld Minerals, headed by CEO Fortune Mojapelo, has a portfolio of vanadium, iron-ore, tin and coal greenfield assets in South Africa and Madagascar.

The company's envisaged integrated vanadium platform includes Vametco's vanadium mine and processing plant and Bushveld's Mokobane vanadium project at Brits.
 
A six-month, $7-million-maximum inventory financing facility to Strategic Minerals Corporation subsidiary Evraz Vametco Alloys facilitates the monetisation of Bushveld’s proprietary Nitrovan vanadium inventory, providing additional cash resources that would otherwise have been received only after delivery completion to customers. 

On completion of the acquisition, Bushveld Vametco intends refinancing the bridge loan without the need for an equity issue. 

Barak’s financing, together with the Wogen Resources' financing, sales and marketing agreement of March 20, provides Bushveld Vametco with up to $13-million in working capital, made up of the $7-million inventory facility and Wogen’s $6-million financing for ongoing production, the company outlined in a release to Creamer Media’s Mining Weekly Online.

Security provided by Bushveld Vametco for Barak financing includes a charge over SMC shares, the cession of dividends owed from SMC to Bushveld Vametco and a guarantee of Bushveld Vametco’s payment obligations under the bridge loan from Bushveld, Yellow Dragon and Bushveld Vametco itself.

Meraki Capital advised Bushveld on the Barak financing.