SP Angel update BMN/RED2 Apr 2020 12:52
Bushveld Minerals* (BMN LN) 9.3p, Mkt cap £107m – Invinity (redT/Avalon) raises a further £7.9m to roll out VRFB developments
• Bushveld Minerals reports shareholder approval has been received for the merger of redT and Avalon Battery Corporation
• The new group will be called Invinity Energy Systems plc which has raised £7.9m through an equity placing at 1.65p
• The combined group will have a leading position in the development and deployment of Vanadium Redox Flow Batteries in Europe, the US, Sub-Sahara Africa and Asia.
• Bushveld will supply vanadium electrolyte to Invinity through its existing Vanadium Financing Partnership with redT for its battery system developments. We expect these battery developments to be owned by third-parties with lease finance used to pay for the cost of the vanadium electrolyte.
• Bushveld is supporting the deal through the conversion of their existing $5m convertible loan to Avalon which will convert into shares in the combined group.
• Bushveld has a right to nominate a director to the Board of Invinity for a 5% stake in the first year and 10% in the second year plus the right for a second director if Bushveld holds a 20% stake in Invinity
Conclusion: There is increasing news supporting the development of Vanadium Redox Flow Batteries ‘VRFB’ in the US, UK, Europe and S Africa.
We expect Bushveld’s Vanadium Investment Program to support the roll-out of VRFB technology and for Bushveld’s vanadium electrolyte lease-finance structure to support the cost of buying vanadium electrolyte for the batteries.
The future development of VRFB batteries should in time support the expansion of Bushveld’s primary vanadium production beyond that supported by growth in the use of vanadium for hardening steel in China and India.
China and India accounted for 1.1bnt (59%) of steel production last year and are subject to increasing compliance in the addition of vanadium for hardening steel.
*SP Angel acts as Nomad and broker to Bushveld Minerals
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