Bushveld Minerals Regulatory News (BMN)

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.

13 September 2018

Bushveld Minerals Limited

("Bushveld " or the "Company")

Acquisition of Sojitz interest in Strategic Minerals Corporation

Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade vanadium assets, is pleased to announce that it has today completed the acquisition of a 21.22 per cent interest in Strategic Minerals Corporation ("SMC"), an intermediate holding company of Vametco Alloys Proprietary Limited, "Vametco") from Sojitz Noble Alloys Corporation ("Sojitz") for a total cash consideration of US$20,000,000 (the "Acquisition"). On completion of the Acquisition, Bushveld has increased its indirect beneficial interest in Vametco from 59.1 per cent to 75 per cent.

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:

"This Acquisition is a significant achievement as it fulfils the Company's undertaking to simplify its corporate structure in order to increase exposure to the underlying cash flows at Vametco. Vametco's strong cash generation capabilities are demonstrated by the Revenue and EBITDA generated in H1 2018 of ZAR 1,050 million and ZAR 521 million an increase of 139.1% and 429.6% respectively, compared to H1 2017.

"The transaction is in line with our priorities laid out earlier this year as part of the US$22 million placing and sets the Company in an advantageous position to deliver on its strategy to grow into a significant, low-cost vertically integrated vanadium platform."

Acquisition Highlights

· The Company has acquired all of Sojitz' shareholding interest and accompanying rights in SMC, the 75 per cent owner of Vametco, for a total consideration of US$20,000,000 (twenty million US dollars).

· The US$20,000,000 consideration payable comprises:

o US$17,500,000 in cash (seventeen million five hundred thousand US dollars) for the sale shares; and

o US$2,500,000 in cash (two million five hundred thousand US dollars) in full and final settlement of accrued but unpaid dividends on the sale shares;

· The Sojitz shareholding in SMC is acquired free from all claims, liens, equities, charges, encumbrances and adverse rights of any description, and together with all rights attaching thereto, accrued or contingent.

· Following completion of the transaction Bushveld, through wholly owned Bushveld Vametco Limited, will own 100 per cent of SMC and therefore have an indirect beneficial interest of 75 per cent in Vametco.

· Bushveld used its existing cash resources to complete the Acquisition.

Rationale for the Acquisition

The Acquisition increases the Company's see-through controlling interest in Vametco from 59.1 per cent to 75 per cent. The Directors believe that the Acquisition will benefit the Company and its shareholders for the following reasons:

· Increased exposure to vanadium, a commodity with compelling fundamentals:

o Robust and growing demand from steel manufacturers and energy storage;

o A significant structural supply deficit due to concentrated and constrained primary production; and

o Limited new global vanadium production on the horizon.

· The vanadium price has enjoyed a strong performance recently, seeing a cumulative price increase of over 200 per cent in the last 12 months, with the 2018 year to date average price of US$70/KgV (source: Metal Bulletin);

· Vametco is a high grade, low-cost, open-cast and simple mining proposition with access to brownfield processing infrastructure. Vametco is one of only three producing primary vanadium operations globally;

· Increased exposure to Vametco's underlying cash flows. Bushveld now own a 75 per cent shareholding in Vametco, with the Black Economic Empowerment partner and the Community partnership being the only minority interest, with an ownership of 25 per cent;

· Vametco enjoys a significant 3 per cent share of the global vanadium market which is targeted to grow to more than 5 per cent in the medium term, supported by one of the largest primary vanadium resource bases in the world (under the ownership of Bushveld);

· Vametco has the potential to diversify its product range beyond its NitrovanTM product;

· The Acquisition is in line with the Company's stated intentions at the time of its US$22 million placing in March 2018, to use part of the proceeds to simplify Bushveld's organisational and corporate structure to improve Bushveld's exposure to the underlying cash flows of its assets; and

· The Acquisition is further aligned with the Company's plans in the global energy storage space by providing capacity for potential electrolyte manufacturing.

Enquiries: info@bushveldminerals.com

ABOUT BUSHVELD MINERALS LIMITED

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

The Company's flagship vanadium platform includes a 75 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 Ltd, the Company's energy storage solutions provider. Whilst the demand for vanadium remains largely anchored in the steel industry, Bushveld 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 coal platform comprises the wholly-owned Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers. The Company's tin interests are held through its shareholding in AIM listed AfriTin Mining Limited.

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 NitrovanTM, 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 NitrovanTM.