3rd Jun 2016 07:20
LONDON (Alliance News) - Mineral development company Bushveld Minerals Ltd on Friday said it has secured financing of USD5.2 million to complete the first phase of its acquisition of Strategic Minerals Corp.
Bushveld is buying Strategic Minerals with private investor Yellow Dragon through special purpose vehicle Bushveld Vametco Ltd from Evraz PLC, for a total of up to USD17.2 million. Strategic Minerals owns the Vametco vanadium mine and plant in South Africa.
Following the acquisition, Bushveld will retain a 45% interest in Bushveld Vametco and Yellow Dragon will retain the other 55%.
Financing has been arranged through a loan to Bushveld Vametco in proportion to each party's shareholding, being USD2.3 million from Bushveld and USD2.9 million from Yellow Dragon for the first USD4.7 million of consideration due by June 17.
Bushveld will funds its loan through a placing and subscription of 98.3 million shares with institutional investors at 1.8 pence each, led by a subscription for 50 million shares for the sum of USD1.3 million by Yellow Dragon, together with the grant of one warrant for each two shares exercisable at 2.4 pence each for a period of 2 years.
On completion of tranche 1, Bushveld Vametco will have a 23% interest in Strategic Minerals which will increase to 79% on completion of tranche 2.
"I am pleased to announce the USD5.2 million funding package and welcome Yellow Dragon Holdings as a co-investor in Bushveld Vametco Ltd," Chief Executive Fortune Mojapelo said in a statement.
"In addition, Bushveld is pleased to announce the completion of an equity placement with a number of new and existing investors. These investors recognised the opportunity and growth that the acquisition of the Vametco mine and plant will bring to the company and we thank them for their support. I look forward to updating shareholders in due course as we progress the transaction," Mojapelo added.
Shares in Bushveld were trading down 20% at 1.96 pence on Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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