1st May 2019 09:21
LONDON (Alliance News) - Vanadium miner Bushveld Minerals Ltd on Wednesday announced a USD68 million deal for vanadium and ferrovanadium assets in South Africa.
Shares were 16% higher on Wednesday morning in London at 28.69 pence each.
Bushveld is buying the Vanchem plant, 200 kilometres away from its existing Mokopane vanadium project in Limpopo province, from Vanchem Vanadium Products Pty Ltd, which is a subsidiary of Duferco Vanadium Investment Holding SA.
It is also buying ferrovanadium assets from South African Japan Vanadium Pty Ltd, a subsidiary of Vanchem Vanadium.
Further, Bushveld is buying Ivanti Resources Pty Ltd, a subsidiary of Duferco Participations Holding SA. Ivanti has rights to some secondary vanadium units treated in the Vanchem plant.
Bushveld anticipates USD45 million of refurbishment costs over the next five years. Vanchem, it said, brings "immediate" production growth, adding 960 metric tonnes of vanadium on an annualised basis.
Following refurbishment, it will be capable of 4,200 metric tonnes a year.
The entire deal, plus capital expenditure of around USD20 million, will be funded from existing cash, future cash flow, and debt if needed, which is currently being negotiated.
Chief Executive Fortune Mojapelo said: "This highly strategic transaction combines our existing portfolio of high-grade low-cost primary vanadium resources, including the Mokopane greenfield deposit, with an established production facility.
"This substantially reduces the capital required to bring the Mokopane project into production, while also bringing it online in a much shorter timeframe than if we were to construct a new plant."
"We consider ourselves the ideal buyer for these businesses and given our sound portfolio of high-quality deposits and a strong operating base established with Vametco, now is the perfect time to take advantage of this opportunity," he continued.
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