Bushveld Minerals Limited (LON:BMN) Early settlement of the Yellow Dragon earn-out

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: We are pleased to have agreed terms with Yellow Dragon for the early settlement of the earn-out under our 2017 Bushveld Vametco acquisition terms.

This represents the final leg of our balance sheet simplification exercise, which we are pleased to coincide with the completion of the Vanchem acquisition, which is expected to complete shortly. We would also like to take this opportunity to thank Yellow Dragon for its support over the years, particularly at the time of the transformational Vametco acquisition. Their contribution to our success, along with their long-standing presence as one of our significant shareholders, is appreciated.

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer, with ownership of high grade vanadium assets in South Africa, is pleased to announce it has agreed an early settlement of the Yellow Dragon Holdings’ earn-out payable under the Bushveld Vametco Limited acquisition agreement.

The early settlement is in line with the Company’s strategy to simplify its balance sheet and corporate structure while taking into account current market dynamics. This strategy has seen the Company acquire Yellow Dragon Holdings’ interest in Bushveld Vametco Limited, acquire all the shares in Strategic Minerals Corporation that it did not already own and redeem the preference shares in Bushveld Vametco Alloys that were held by Strategic Minerals, a wholly owned subsidiary of Bushveld Minerals.

As part of the Vametco acquisition terms announced on 30 November 2017, Bushveld Minerals agreed to make further deferred payments to Yellow Dragon as follows:

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· Two deferred payments of US$0.6 million each, payable following publication of the accounts for Vametco Holdings Limited for respectively the years ending 31 December 2018 and 31 December 2019; and

· A final payment to be made on publication of the Vametco Holdings Limited accounts for the year ended 31 December 2020 to be calculated by reference to Vametco Holdings Limited’s EBITDA for the 2020 financial year. The payment being calculated on the following basis 4.5x EBITDA (as shown in the 2020 Accounts) x 5.91 per cent.

The Company has to date paid the first of the two US$0.6 million payments, following which the two parties agreed on an early settlement for the balance of amounts payable to be settled as follows:

· Full and final settlement of the earn out of US$13,500,000, being an all-in total payment comprising:

o A cash component payment totalling US$3,000,000; and

o A total of US$10,500,000 payable in 33,914,729 Bushveld Minerals Limited ordinary shares of 1.0 penny each to be issued at a price of £0.24 (which favourably compares to the 10 day volume weighted average price of £0.235 and the 20 day volume weighted average price of £0.226, as at 22 October 2019).

The shares issued to Yellow Dragon are subject to a 6 month lock-in arrangement and a further 6 month orderly market arrangement which are subject to certain exceptions and may otherwise only be waived with the consent of the Company’s brokers.

The cash component of the earn-out early settlement is to be settled on or before 31 October 2019.

Admission to AIM and Total Voting Rights

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Share Talk Bulletin Board Heroes, Tuesday 22nd October 2019

Application will be made for admission of the 33,914,729 new Ordinary Shares to trading on AIM (“Admission”) and it is expected that Admission will take place and that trading will commence on AIM at 8.00 a.m. on or around 29 October 2019. The deferred consideration shares represent 2.94% of the enlarged share capital of the Company.

Following Admission, there will be a total of 1,153,642,682 Ordinary Shares in issue, 670,000 of which are held in treasury. Shareholders should use the figure of 1,152,972,682 as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the FCA’s Disclosure and Transparency Rules.

 

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