Bushveld Minerals Regulatory News (BMN)

1 April 2021

Bushveld Minerals Limited

("Bushveld Minerals" "Bushveld" or the "Company")

Follow-on investment in Enerox GmbH

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage solutions provider, with ownership of high-grade assets in South Africa, ("Bushveld"), is pleased to provide an update in respect of Bushveld Energy Limited, its 84%-owned energy subsidiary ("Bushveld Energy") and its investment in Enerox GmbH ("Enerox"), a Vanadium Redox Flow Battery ("VRFB") manufacturer providing grid scale and micro-grid energy storage solutions.

Highlights

· A consortium of investors in Enerox Holdings Limited ("EHL"), which wholly owns Enerox, is investing US$30 million to scale up production capacity to 30MW by 2022.

· Bushveld Energy has an indirect interest in Enerox of 25.25 per cent, through VRFB Holdings Limited ("VRFB H"), which owns 50 per cent interest in EHL.

· Bushveld will contribute its share of the investment, being US$7.5 million comprising US$5 million paid on 31 March 2021 and US$2.5 million payable during the month of April 2021.

· Bushveld's funding strategy for Bushveld Energy initiatives is to promote self-funding and funding sharing with external partners, including its follow-on investment in Enerox. Self-funding options being realised by Bushveld Energy include proceeds of the sale of a portion of its holding in Invinity Energy Systems Plc ("Invinity").

· The investment is in line with Bushveld's strategy to mobilise capital to scale up growth and manufacturing capacity of VRFB manufacturers, as illustrated by the previous and on-going success of Invinity.

Fortune Mojapelo, CEO of Bushveld Minerals, commented:

"Investing in VRFB manufacturers is a part of Bushveld Energy's strategy, designed to play a catalytic role in mobilising third-party capital to assist VRFB manufacturers scale up of sales and manufacturing capacity in order to meet the fast-growing demand for long duration energy storage solutions.

Our first investment of US$5 million in Invinity played a critical role in establishing Invinity out of the merger of Avalon and RedT, and allowed it to access follow-on funding from the equity capital markets, establishing a leading VRFB player. In addition, to a healthy return from Bushveld's US$5 million investment, the success of the investment in Invinity is evidenced by its AIM listing with a healthy >US$150 million market capitalisation and a well-funded programme to scale up its production capacity to support a solid pipeline of announced VRFB projects.

Our investment in Enerox follows the same script of mobilising third-party financing to scale up manufacturing capacity and sales, while establishing a platform for collaboration in developing projects into which we will supply vanadium. The funding commitments of Enerox's shareholders are a strong vote of confidence in the potential and strategy of the company. We believe that this additional capital will place Enerox on the path to becoming a major player in the industry. It further cements VRFB technology in the rapidly growing stationary energy storage sector.

The sell down of our Invinity stake is no reflection of any diminishing faith in the potential of the company. We are proud of its achievements and continue to cooperate on other topics, including vanadium supply, vanadium electrolyte rental and the overall growth of the VRFB industry. Our decision is rather informed by our conservative capital allocation strategy across the Group, which focuses resources on our mining and processing operations and seeks to place Bushveld Energy on a path to self-fund its future plans.

Enerox update

As part of Bushveld strategy of partnering with VRFB Original Equipment Manufacturers ("OEMs") that includes supply of vanadium and electrolyte, deployments and investment, the Company successfully completed in 2020 the acquisition of Enerox as part of a consortium, Enerox Holdings Limited ("EHL").

Enerox is a leader among VRFB peers, with a more than 20 years development and production history, over 130 systems / 23MWh deployed. In H2 2020, Enerox secured 13 MWh in signed orders for its systems.

EHL holds a 100 per cent interest in Enerox, with Bushveld Energy a 25.25 per cent shareholder in EHL through VRFB H. To date EHL has invested US$14.6 million into Enerox to fund acquisition consideration, transaction costs and working capital requirements.

The EHL shareholders and Enerox management have determined that the growth capital required by Enerox is US$30 million, which will provide sufficient funding for Enerox to scale up to 30 MW (120 - 240 MWh) per annum manufacturing capacity and sales, executing upon a strong pipeline of available projects, with a future expansion allowing Enerox to scale to at least 150 MW (600 - 1,200 MWh) by 2025.

Bushveld Energy's share of the funding requirement is approximately US$7.5 million, of which it has already paid US$5 million. It intends to invest another US$2.5 million in VRFB H, and thus ultimately in Enerox, in April 2021 in order to maintain its 25.25 per cent indirect shareholding.  

Invinity update

Bushveld Energy has monetised a portion of its Invinity holding and received approximately US$8.8 million. As at the last practicable date, being 31 March 2021, Bushveld Energy's Invinity holding was less than three per cent. The proceeds from the sale will be used to fund Bushveld Energy initiatives in 2021, including the Vanadium Electrolyte Rental Limited ("VERL"), the partnership established with Invinity to rent vanadium electrolyte, the global scale up of the vanadium electrolyte rental product and the follow on investment in Enerox.

Bushveld's right of first refusal to supply vanadium and vanadium electrolyte to systems sold by Invinity will still be effective up to the second year anniversary of the agreement. This is buoyed by the planned manufacturing expansion capacity announced by Invinity in its March 2021 update, including "stack manufacturing expansion, delivering a total 200% capacity increase over December 2020 levels" and an agreement with a "strategic manufacturing partner in China giving the Company an option to increase manufacturing capacity up to +80%."

ENDS

Enquiries: info@bushveldminerals.com

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low-cost, vertically integrated primary vanadium producer. It is one of only three operating primary vanadium producers, owning 2 of the world's 4 operating primary vanadium processing facilities. The Company produced more than 3,600 metric tonnes of Vanadium  in 2020. The Company is funded to grow its production to more than 6,800 mtVp.a. by 2025 (almost double the achieved production in 2020), and could, subject to funding, increase its production to more to 8,400 mtVp.a. over the same period.

Bushveld Minerals owns a diversified vanadium product portfolio serving the needs of the steel, energy and chemical sectors. Bushveld Minerals participates in the entire vanadium value chain through its two main pillars: Bushveld Vanadium, which mines and processes vanadium; and Bushveld Energy, an energy storage solutions provider. 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.

Detailed information on the Company and progress to date can be accessed on the website

Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com.

About Bushveld Energy Limited

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

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, meeting the demand for utility scale energy storage in Africa by leveraging South Africa-mined and beneficiated vanadium. As part of its strategy of partnering with VRFB Original Equipment Manufacturers ("OEM") for the supply of vanadium material, vanadium electrolyte and vanadium electrolyte rental products, the Company is invested in Invinity Energy Systems Plc and Enerox GmbH. In addition, Bushveld Energy is developing its own hybrid mini-grid at the Vametco vanadium mine comprising 3.5 megawatts of solar photovoltaic and 4 megawatt hours of VRFB energy storage. In addition, Bushveld Energy has developed a vanadium electrolyte plant in partnership with the Industrial Development Corporation, with an initial 200 megawatt hours capacity, in East London, South Africa. The Company has also created and rolled out an innovative vanadium electrolyte rental product that reduces costs of VRFBs and introduces vanadium into the circular economy.

http://www.bushveldenergy.com