(Alliance News) - Bushveld Minerals Ltd saw its shares rise on Friday, after entering into a definitive agreement with Southern Point Resources Ltd.
The vanadium producer headquartered in South Africa confirmed the sale of a 64% stake in Mokopane mine to Southern Point for an acquisition price of USD3.7 million.
Bushveld shares rose 6.9% to 2.25 pence each on Friday morning in London.
This USD3.7 million acquisition is the latest in a package of investments by Southern Point into Bushveld and its group companies, which taken together would provide a cumulative investment of between USD69.5 million and USD77.5 million.
The two also entered an agreement with respect to sales and marketing, with Southern Point agreeing to take command of all marketing and sales of the vanadium product produced at the Vametco and Vanchem plants on an exclusive basis.
Southern point will provide Bushveld with a provisional working capital facility of between USD25 million and USD30 million to replace the existing working capital facilities.
Chief Executive Officer Craig Coltman said: "I am very pleased to report that the sales and marketing agreement with Southern Point Resources has now been signed, putting the company in a stronger financial position through the provision of the necessary near term working capital. This agreement is just one in a package of interrelated transactions which will fundamentally transform the company.
By Hugh Cameron, Alliance News reporter
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Bushveld Minerals (BMN)