Bushveld Minerals Limited SUPPORTED ACQUISITION OF BEE SHAREHOLDING (5723X)

TIDMBMN

RNS Number : 5723X

Bushveld Minerals Limited

22 February 2017

BUSHVELD-SUPPORTED ACQUISITION OF BEE SHAREHOLDING IN EVRAZ VAMETCO HOLDINGS

22 February 2017

Bushveld Minerals Limited

("Bushveld Minerals" or "the Company")

Bushveld Minerals Limited (AIM: BMN), a diversified mineral development company with projects in South Africa and Madagascar, is pleased to announce in connection with its proposed acquisition of Vametco Holding (Pty) Limited ("Vametco"), it has agreed to facilitate a change in the ownership of one of Vametco's Black Economic Empowerment ("BEE") partners. Bushveld Minerals has agreed terms with Jaxson 640 (Pty) Limited ("Jaxson 640") to support Jaxson 640's acquisition of a controlling interest in the BEE shareholdings in Vametco (the "Jaxson Transaction"). The Jaxson Transaction will take place alongside Bushveld Vametco Limited's proposed acquisition of a 78.8% interest in Strategic Minerals Corporation ("SMC") from the Evraz Group S.A ("Evraz") currently underway (announced on May 2016 and further on 25 July 2016).

Under the terms of the signed Jaxson Transaction:

a) Jaxson 640, a qualifying BEE company in accordance with the Broad Based Economic Empowerment Act of South Africa, has agreed conditionally to acquire an effective 21.2% in Vametco from a consortium led by Avacap (Pty) Limited (the "Seller" or "Avacap Consortium") for a consideration totalling an estimated ZAR 47 million, as follows:

-- Jaxson 640 has agreed conditionally to acquire 100% of the shares in Marble Gold (Pty) Limited, a company owned by the Seller which owns a 70% interest in Business Ventures Investments Holdings 973 (Pty) Limited ("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% of Vametco by SMC to BVI 973 in fullfilment of its mining right obligations; and

-- Jaxson 640 has further agreed conditionally to acquire 100% of the shares in Oakleaf Investments Holdings 115 (Pty) Limited ("Oakleaf 115"), a company owned by the Seller which owns a 100% shareholding in Business Ventures Investments Holdings No 1833 (Pty) Limited ("BVI 1833"), which in turn owns a 10% shareholding in Vametco;

b) Furthermore, Jaxson 640 has signed a Deed of Adherence undertaking to be bound by all the BEE agreements underpining Vametco Holdings' New Order Mining Right;

   c)     The Jaxson Transaction is subject to several conditions, including: 

-- The completion and implementation of Bushveld Vametco's acquisition of SMC, a condition that cannot be waivered without the consent of Evraz;

-- Bushveld Minerals entering into a Deed of Settlement and Undertaking in terms of which Bushveld Minerals will provide vendor financing for the settlement of all funding amounts in respect of the BEE shareholding held by BVI 1833, including a ZAR 1.25 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 a total sum of an estimated ZAR 6.3 million; and

-- Consent to the transaction from the funding bank in the Avacap Consortium's original acquisition of BVI 973 BEE shares that Jaxson is taking over;

-- Regulatory consent to the transaction from the Department of Mineral Resources in terms of Section 11 of the Mineral and Petroleum Resources Development Act .

d) Jaxson 640 undertakes to be bound by all the agreements relating to the funding advanced to BVI 973 and Oakleaf 115 for purposes of acquiring the BEE shareholding in Vametco; and

e) The consideration of approximately ZAR 47 million comprises a cash payment of approximately ZAR 7.4 million to the Avacap Consortium and the assumption of all the debt financing of approximately ZAR 39.5 million by the BEE shareholding structure.

Bushveld Minerals' support to Jaxson 640 in respect of the Jaxson Transaction comprises of the following:

a) Bushveld Minerals' agreement to enter into a Deed of Settlement and Undertaking, whereby it agrees to settle all funds owing to the lender in respect of the BEE shareholding held by BVI 1833; and

b) Bushveld Minerals' agreement to support Jaxson 640 in its efforts to raise finance for the consideration of approximately ZAR7.4 million to be paid to the Avacap Consortium for the acquisition of the Avacap Consortium's interest in the Vametco BEE shareholding structure.

Jaxson 640 is led by Bill Chipane, a succesful investment professional with more than ten years in the mining industry. Mr Chipane is well known to Bushveld Minerals and has been a consultant to the group for some time, providing advice in connection with our M&A strategy and transactions. Negotiations between Bushveld Minerals and Jaxson 640 have been conducted and agreed on arm's length terms.

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

The diagrams below illustrate the structure of Vametco Holdings pre- and post the Jaxson Transaction:

Link to Figure 1 - Pre-Transaction Structure

http://www.rns-pdf.londonstockexchange.com/rns/5723X_-2017-2-22.pdf

Link to Figure 2 - Post-Transaction Structure

http://www.rns-pdf.londonstockexchange.com/rns/5723X_1-2017-2-22.pdf

Fortune Mojapelo, CEO of Bushveld Minerals, commented:

"We are pleased to welcome Jaxson 640 as our BEE partner of choice in Vametco Holdings. Jaxson is led by Mr Bill Chipane, a succesful investments professional with more than ten years in the mining industry. Jaxson 640 will also include a shareholding for a Trust focused on empowering HDSA women and youth in the communities that Vametco operates, with particular emphasis on education, entrepreneurship and enterprise development. The involvement of the communities through a Community Trust presents an opportunity to pro-actively ensure that the economic interest in Vametco 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. We look forward to our collaboration with our future BEE partner as well as the professional and local community representatives."

Enquiries:

[e-mail]

Contact:

Bushveld Minerals

Fortune Mojapelo

[phone]

Strand Hanson

Andrew Emmott

[phone]

Beaufort Securities

John Belis

[phone]

SP Angel

Ewan Legatt

[phone]

Blytheweigh

Tim Blythe/Camila Horsfall

[phone]

Gabriella von Ille

[phone]

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a diversified AIM listed mineral development company with a portfolio of vanadium, iron ore, tin and coal greenfield assets in Southern Africa and Madagascar. The Company's flagship platform, the vanadium platform, includes the Mokopane Vanadium Project, the Brits Vanadium Project, and the Bushveld Iron Ore & Titanium Project. The tin platform comprises the Mokopane Tin Project whereas the Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers, makes up the Company's coal platform.

The Company's vision is to become the largest low cost integrated primary vanadium producer through owned low-cost high-grade assets. This includes the development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage solutions provider. Whilst the demand for vanadium remains largely anchored in a slow growing steel industry, Bushveld Minerals believes there is a strong potential for imminent significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.

Bushveld Minerals' approach to project development recognises that whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production with a visible timeframe, low capex requirements and scalability are important factors in retaining an attractive exit option. 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

This information is provided by RNS

The company news service from the London Stock Exchange

END

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February 22, 2017 07:50 ET (12:50 GMT)