Bushveld Minerals has signed the final elements of the financing agreements with Barak Fund SPC Ltd for the acquisition by its Bushveld Vametco unit of a 78.8% interest in South African vanadium producer Strategic Minerals Corp, the company said Thursday.
The financing deal comprises a bridge loan facility of up to $11 million, repayable within two months of drawdown, to fund the acquisition, plus an inventory financing facility of up to $7 million.
Bushveld signed a $17.2 million share purchase agreement last May with Russia's Evraz for the conditional purchase of its stake in Strategic Minerals Corp, which owns the producing Vametco vanadium mine and plant.
The Vametco plant has an annual capacity of 2,750 mt of vanadium in the form of Nitrovan -- a patented vanadium product used in the steel industry -- and vanadium oxide, with the scope to expand this to 3,340 mt/year through targeted debottlenecking.
Bushveld announced last week the signing of a definitive vanadium sales and marketing agreement with UK-based trading company Wogen Resources, under the terms of which Wogen will become a marketer and distributor of Vametco Alloys' Nitrovan production and provide financing to the Bushveld Vametco group comprising a $3 million product prepayment, plus inventory and receivable financing of $6 million.
"The Barak financing completes the funding package for the acquisition of SMC whilst providing additional cash resources to the operation being acquired," Bushveld Minerals CEO Fortune Mojapelo said in a statement.
"We look forward to working together with Barak, in addition to Wogen Resources Limited, as we leverage the production platform of Vametco to build a deeply integrated vanadium platform," Mojapelo added.
In addition to the planned Strategic Minerals acquisition, Bushveld has two vanadium projects in South Africa: the Mokopane project, where a prefeasibility study on 1 million mt/year mining operation to produce around 9,500 mt/year of vanadium pentoxide is currently underway; and the Brits greenfield primary vanadium project, which hosts the continuation of the mineralization currently mined at Evraz's Vametco operations in Brits.
