JOHANNESBURG (miningweekly.com) – Aim-listed Bushveld Minerals on Thursday said it had made an $11.1-million offer to acquire all the shares it does not already own in Bushveld Vametco (BVL).
Bushveld currently owns 45% in BVL, while Yellow Dragon Holdings holds a 55% interest.
If the transaction is concluded, Bushveld will, through BVL, own a 78.8% economic interest in Strategic Minerals Corporation, which, in turn, holds 75% interest in Vametco Holdings, which has a 100% interest in the Vametco vanadium mine, a high-quality, low-cost mine and plant producing a trademark-protected vanadium product.
The acquisition will be settled through a cash payment of $4.5-million and the issue of 54.76-million new ordinary shares in Bushveld at 9.06p apiece, representing 6.43%.
In addition, there will be two deferred payments of $600 000 each, payable following publication of the accounts for Vametco Holdings in December 2018 and December 2019.
A further payment will be made on publication of the Vametco Holdings accounts for the year ended December 2020, to be calculated based on the earnings before interest, taxes, depreciation and amortisation.
Following completion, Yellow Dragon will hold 9.24% in Bushveld.
Bushveld CEO Fortune Mojapelo said that, to date, Vametco has illustrated its strong cash generation capacity and, with the expansion initiatives that are under way, the drive toward a lower cost base which, in a rising vanadium price environment, ensures the transaction is accretive to its shareholders.
“This is a transformational transaction for Bushveld, culminating in completion of the initial phase of our vanadium strategy. [We have] now completed our transition into a vanadium producer and launched a new chapter in our development,” he added.