Vanchem Purchase Competition Commission Approval

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

29 August 2019

Bushveld Minerals Limited

("Bushveld Minerals" or the "Company")

 Vanchem Update - Competition Commission Approval

Bushveld Minerals Limited (AIM:BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade vanadium assets, is pleased to announce that on 28 August 2019, it received approval from the Competition Commission of South Africa to acquire the Vanchem assets, without conditions.

On 1 May 2019, Bushveld announced a conditional agreement to acquire the primary vanadium processing assets of Vanchem Vanadium plant, the ferrovanadium production business of SAJV as a going concern, and a 100 per cent of the outstanding shares of Ivanti Resources (Pty) Limited, a subsidiary of Duferco Participations Holding S.A, (collectively "Vanchem").

The transaction remains on track to be completed on 31 October 2019 and we expect the outstanding conditions precedent, being the cession of specific commercial agreements and South African Reserve Bank approval, to be satisfied.

The Company is progressing the negotiations with local banks for a debt facility to supplement existing cash resources. Further updates and progress on the satisfaction of the remaining conditions precedent and the approval of the debt facility will be provided as appropriate.

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: 

"Competition Commission approval marks yet another key milestone in closing this exciting transaction. We remain on track to complete the acquisition within our targeted timeframe, at which point we will have significantly increased our processing capacity, giving us the ability to unlock even more of our existing large high grade resource base and produce a  diverse array of products for the steel market, chemical industry and energy storage sector. Furthermore, significant progress is being made in respect of the preparation ahead of the integration of Vanchem post transaction closure."

Enquiries: info@bushveldminerals.com

About Vanchem

The Vanchem Business is a primary vanadium producing facility with a beneficiation plant capable of producing various vanadium oxides, ferrovanadium and vanadium chemicals. The Vanchem Business uses the salt roast beneficiation process, similar to the one used at Vametco. Following a refurbishment and ramp-up schedule, which is estimated to require approximately US$45 million of capital expenditure, which will be incurred over a five year period, it is expected to reach steady state production of 4,200 mtV per annum utilising all three kilns. The plant consists of the following components:

·    Milling and concentrator (magnetic separation) facility for the treatment of magnetite;

·    A roast / leach configuration with three kilns;

·    An ammonium poly-vanadate precipitation plant;

·    A de-ammoniation / vanadium trioxide plant;

·    Vanadium pentoxide flake (V₂O₅) production facilities;

·    Two conversion facilities (an electric smelting facility and an aluminothermic smelting facility) for the production of ferrovanadium; and

·    A vanadium chemical plant producing various vanadium chemical products.

The Vanchem Plant is situated at Ferrobank Industrial Park in Emalahleni Local Municipality, Mpumalanga Province in the Republic of South Africa and has been operating since the late 1970s, processing a combination of ore feed from the Mapochs vanadium mine ("Mapochs") and slag from Highveld. Highveld continued to supply ore to VVP from its Mapochs mine in Limpopo until it closed in 2015. The closure of the mine meant that VVP no longer had a supply of ore and as a consequence, VVP went into Business Rescue in November 2015. The Vanchem Plant was put into care and maintenance later that year. The Vanchem Plant was partially re-started in the third quarter of 2018, after VVP was able to procure magnetite ore from third parties. 

SAJV is located at the Highveld site and is situated approximately 10 km from the Vanchem Plant. SAJV comprises of an alumino-thermic smelting facility which is adjacent to the Vanchem Plant electric smelting facility.

The Vanchem Business has secured sufficient ore supply from third parties to support current levels of production, until Mokopane's development has been completed. The Company retains the optionality to supply magnetite concentrates from Vametco to the Vanchem Business. Upon receipt of the mining right, Mokopane will be a primary source of feedstock to the Vanchem Business as a result of its large mineral reserve, therefore the Transaction facilitates the expedited development of Mokopane. The Mokopane-Vanchem model will represent a fully integrated business, in line with the Company's strategy for Vametco.

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low cost, integrated, primary vanadium producer, with ownership of high grade vanadium assets.

The Company's flagship vanadium platform includes a 74 per cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a primary vanadium mining and processing company; the Mokopane Vanadium Project and the Brits Vanadium Project.

Bushveld's vision is to become a significant, low cost, integrated primary vanadium producer through owning high grade assets. This incorporates 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 the steel industry, Bushveld Minerals believes there is strong potential for an imminent and significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.

While the Company's focus is on vanadium operations and the development and promotion of VRFBs, it has additional investments in coal, power and tin.

The Company's 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 within a visible timeframe, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. 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.

About Vametco

Vametco is located near Brits on the Western Limb of the Bushveld Complex. The integrated operation comprises a vanadium ore mine and a processing plant that produces Nitrovan^TM, a trademark product sold in major steel markets across the world. The mine lies adjacent to the Brits Vanadium Project, which will in future serve as an alternative source of near surface run of mine (ROM) ore feed to the Vametco plant.

The Vametco mining operation uses open pit bench mining methods to mine a well-defined orebody. The deposit is continuous with limited faulting and dips in a northerly direction at approximately 19 degrees.

ROM ore is fed into a primary, secondary and tertiary crushing circuit, followed by milling and magnetic separation to produce magnetite concentrates. The magnetite concentrates are fed into the extraction process which includes the kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide (MVO) in rotary calciners. MVO is fed into the mixplant and finally into the shaft furnaces to produce Nitrovan^TM. 

About Bushveld Energy Limited

Bushveld Energy is a leading energy storage solutions provider, focusing on the African market. Bushveld Energy recognises that electricity in Africa intersects paramount potential for social transformation with an immense commercial opportunity.

Launched in 2016, Bushveld Energy is focused on developing and promoting the role of vanadium in the growing global energy storage market through application in vanadium redox flow batteries. Its near term strategy is to deploy several VRFB systems as part of its longer term vision to become a significant electricity storage provider in Africa by 2020, meeting the demand for utility scale energy storage in Africa by leveraging South Africa-mined and beneficiated vanadium.

http://www.bushveldenergy.com