TIDMBMN
RNS Number : 8903G
Bushveld Minerals Limited
30 November 2020
Market Abuse Regulation ("MAR") Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
30 November 2020
Bushveld Minerals Limited
("Bushveld Minerals", "Bushveld" or the "Company")
Bushveld satisfies the outstanding conditions in respect of
US$65 million funding package with Orion Mine Finance
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer and energy storage provider, with
ownership of high-grade assets in South Africa, is pleased to
announce that it has satisfied the conditions required to drawdown
the US$30 million under the Production Financing Agreement ("PFA")
and the unsecured Convertible Loan Notes ("Notes") of US$35
million, to be subscribed by Orion Mine Finance ("Orion") first
announced on 30 September 2020. The Company is in the process of
drawing down funds under the PFA and has given notice to Orion to
drawdown on the full amount of US$35 million under the Notes.
PFA Transaction Details
Bushveld will repay the principal amount and pay interest via
quarterly payments determined initially as the sum of:
-- a gross revenue rate (set at 1.175 per cent for 2020 and 2021
and 1.45 per cent from 2022 onwards, subject to adjustment based on
applicable quarterly vanadium prices) multiplied by the gross
revenue for the quarter; and
-- a unit rate of US$0.443/kgV multiplied by the aggregate
amount of vanadium sold for the quarter .
Once Vametco reaches vanadium sales of approximately 132,020 mtV
during the term of the facility, the gross revenue rate and unit
rate will reduce by 75 per cent (i.e. to 25 per cent of the
applicable rates).
On each of the first three loan anniversaries, Bushveld has the
option to repay up to 50 per cent of both constituent loan parts
(each may only be repaid once). If Bushveld utilises the loan
repayment option, the gross revenue rate and / or the unit rate
will reduce accordingly.
Convertible Loan Notes Details
The Company will raise a total of US$35 million through the
issue of the Notes pursuant to the related Convertible Loan
Instrument (the "Instrument"). The Notes bear a fixed coupon of 10
per cent per annum (which will accrue and be capitalised on a
quarterly basis in arrears but compounded annually) and have a
maturity date of three years from the date of issue (the "Maturity
Date").
The Notes will be issued in one tranche, in December 2020, upon
receipt of funds by the Company. The Notes are convertible by the
holder into Bushveld ordinary shares of 1 pence each in the Company
at a price equal to 17 pence.
Between issue and the Maturity Date, Orion may, at their option,
convert an amount of the outstanding Notes, including capitalised
and accrued interest, into Bushveld ordinary shares as follows:
-- First six months: Up to one third of the outstanding
amount;
-- Second six months: Up to two thirds of the outstanding amount
(less any amount previously converted);
-- From the anniversary of drawdown until the maturity date: the
outstanding amount under the Instrument may be converted
Bushveld also has the option to convert all of the Notes
outstanding, in one tranche, if the volume weighted average share
price is more than 200 per cent of the conversion price over a
continuous 15 trading day period, a trading day being a day on
which the AIM market of the London Stock Exchange is open for the
trading of securities.
Use of Proceeds
The PFA capital will provide funding to continue to grow
production at Vametco to more than 4,200 mtV per annual production
level and debt repayment. The proceeds raised from the issue of the
Notes will be applied towards capital investment purposes for the
first phase of Vanchem's critical refurbishment programme, and debt
repayment purposes.
The proceeds of the proposed drawdown under the Instrument ,
together with the proceeds from the PFA will be used as
follows:
Approx. US$
million
Vametco Phase III expansion project
* Upgrade of screenhouse distribution systems as well
as SRP surface condenser
* Pre-feasibility and detailed design and
implementation including the upgrade of leach circuit,
kiln firing systems, leach mill and tertiary
crushers. This will also include the installation of
SRP3, Boiler 4, MVO reactor 3 as well as Furnace 5
Bushveld * Overall production increase leading to 4,200mtv per
Vanadium annum 24.0
--------------------------------------------------------------- ------------------
Vanchem Phase I refurbishment
* Critical refurbishment including: extending the
calcine dump facility, replacement of heavy moving
equipment, upgrade of the electrical reticulation
system and construction of a storm water treatment
facility.
* Refurbishment of the third kiln for modular
production increase leading to 2,600mtv per annum 20.3
--------------------------------------------------------------------------------- ------------------
Debt Prepayment Pre-payment of Nedbank term loan 15.7
Pre-payment of Duferco convertible 5.0
--------------------------------------------------------------- ------------------
Total Gross Proceeds 65.0
------------------
A portion of the gross proceeds will be used to pay for fees and
expenses related to the finance raised.
Revised Nedbank Debt Terms
The proceeds of the Instrument will also be used by Bushveld
Minerals to prepay in full the ZAR250 million term loan. For the
ZAR125 million remaining revolving credit facility, the margin will
increase by 0.25 per cent to 3.85 per cent.
In addition, the following amendments will be applied to the
financial covenants:
-- Removing the cumulative DSCR covenant;
-- Increasing the default level on the Group net debt to Group
EBITDA ratio to 2.50 times;
-- Changing the gross interest cover ratio to a net interest
cover ratio.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"It is pleasing that we have been able to execute both
transactions in just two months, allowing us to begin allocating
funds towards our growth plans.
I would also like to welcome Orion as a significant investor
into the Bushveld story, their support provides further confidence
in our development plans we have in the coming years.
With a solid balance sheet and a clear vision of where we want
to be in the next few years, we enter 2021 re-energised. At the
same time, the world also begins to see signs of an end to what has
been a very difficult year for everyone, and signs that it could be
followed by one of a recovery."
Philip Clegg, Portfolio Manager at Orion, commented:
"We are thrilled to get the expansion at Vametco fully funded
and to support the refurbishment plans at Vanchem. We are looking
forward to partnering with Bushveld as it executes its growth
strategy and ongoing advancement into battery technologies."
S
Enquiries: info@bushveldminerals.com
Bushveld Minerals Limited +27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance
LLP Nominated Adviser & Broker +44 (0) 20 3470 0470
Richard Morrison / Charlie
Bouverat
Abigail Wayne / Richard Parlons
BMO Capital Markets Limited Joint Broker +44 (0) 20 7236 1010
Tom Rider / Michael Rechsteiner
/
Neil Elliot
Peel Hunt Limited Joint Broker +44 (0) 20 7418 8900
Ross Allister / Alexander
Allen
Tavistock Financial PR
Charles Vivian / Gareth Tredway
/
Edward Lee +44 (0) 207 920 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, integrated, primary vanadium
producer, with ownership of high-grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; 100 per cent of
Bushveld Vanchem, a primary vanadium processing facility with a
beneficiation plant; the Mokopane Vanadium Project and the Brits
Vanadium Project.
Bushveld's vision is to become a significant, low-cost,
integrated primary vanadium producer through owning high grade
assets. Whilst the demand for vanadium remains largely anchored in
the steel industry, Bushveld Minerals believes there is strong
potential for an imminent and significant global vanadium demand
surge from the fast-growing energy storage market, particularly
through the use and adoption of Vanadium Redox Flow Batteries.
Bushveld Energy, the Company's energy storage solutions provider,
plays a leading role in the development and promotion of the role
of vanadium in this market.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they may be
insufficient to secure capital to bring them to account. A clear
path to production within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. 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 .
About Vametco
Vametco is located near Brits on the Western Limb of the
Bushveld Complex. The integrated operation comprises a vanadium ore
mine and a processing plant that produces mostly Nitrovan , a
product sold in major steel markets across the world. The mine lies
adjacent to the Brits Vanadium Project, which will in future serve
as an alternative source of near surface run of mine ("ROM") ore
feed to the Vametco plant.
The Vametco mining operation uses open pit bench mining methods
to mine a well-defined orebody. The deposit is continuous with
limited faulting and dips in a northerly direction at approximately
19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing
circuit, followed by milling and magnetic separation to produce
magnetite concentrates. The magnetite concentrates are fed into the
extraction process which includes the kiln for roasting followed by
leaching and precipitation. Thereafter the precipitated vanadium as
ammonium metavanadate is converted to modified vanadium oxide
("MVO") in rotary calciners. MVO is fed into the mix plant and
finally into the shaft furnaces to produce Nitrovan.
About Vanchem
Vanchem is situated at Ferrobank Industrial Park in Emalahleni
Local Municipality, Mpumalanga Province in the Republic of South
Africa. Vanchem is a primary vanadium producing facility with a
beneficiation plant capable of producing various vanadium oxides,
ferrovanadium and vanadium chemicals. Vanchem uses the salt roast
beneficiation process, similar to the one used at Vametco. The
plant comprises: a core salt-roast processing plant, including 3
roasting kilns, an electric smelting ferrovanadium converter, an
alumino-thermic smelting facility, also located at Highveld, a
vanadium chemical plant; and a rail siding linking the plant with
Bushveld deposits and additional potential supply sources through
the national rail network.
About Bushveld Energy Limited
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that
electricity in Africa intersects paramount potential for social
transformation with an immense commercial opportunity.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through
application in vanadium redox flow batteries. Its near term
strategy is to deploy several VRFB systems as part of its longer
term vision to become a significant electricity storage provider in
Africa, meeting the demand for utility scale energy storage in
Africa by leveraging South Africa-mined and beneficiated
vanadium.
http://www.bushveldenergy.com
About Orion
Orion is a global alternative investment management firm with
approximately US$6.2 billion under management (as of 3/31/2020).
Orion specializes in institutional metals and mining investment
strategies in the industrial and precious metals space. Orion's
private equity, hedge fund, and merchant service divisions enable
us to access in-depth knowledge of the global metals and mining
supply chain and robust insight into the physical and financial
demand driving global metals prices.
For more information visit www.orionresourcepartners.com .
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