Bushveld Minerals Regulatory News (BMN)

13 December 2016

Bushveld Minerals Limited

("Bushveld" or "the Company")

Greenhills Resources agrees Heads of Terms to acquire a significant interest in the Uis tin project in Namibia

Bushveld Minerals Limited (AIM: BMN), a diversified mineral development company with projects in South Africa and Madagascar, is pleased to announce that it has agreed terms to acquire a significant interest in the Uis Tin project through its wholly owned subsidiary, Greenhills Resources Limited ("Greenhills Resources"). Under the Agreement Greenhills Resources will acquire 49% interest in Dawnmin Africa Investments Ltd ("Dawnmin") which is the 85% owner of the Uis Tin Project (the "Project"), subject to due diligence, from a consortium of Namibian shareholders (the "Sellers").

Erongo Tin Ltd ("Erongo") holds the 50.5% majority of the issued share capital of Dawnmin not held by the Sellers. The Sellers comprise: Namuis (Pty) Ltd, Havana Investments (Pty) Ltd and Sweltering Desert Investments (Pty) Ltd.

The Uis Tin Project is one of the largest undeveloped opencast hard rock tin deposits in the world and has a history of significant tin mining. It is located in the Erongo Region of Namibia and comprises three mining licenses, ML 134, ML 129 (B1 and C1) and ML 133. Historic work confirmed a significant tin resource on all three licenses, the most significant of which is the ML 134 resource estimated at 70.3Mt at 0.14% Sn for a total potential resource of over 90kt of contained tin. Further information regarding the project, its history and resources are set out below.

The Project is held by Guinea Fowl Investments Twenty Seven (Pty) Ltd, which is owned 85% by Dawnmin Africa Investments Ltd (the remaining 15% being held by Small Miners of Uis, a company wholly owned by the Namibian Government).

Greenhills Resources, Bushveld's tin platform, was established to develop a pan-African portfolio of tin assets with a near term production profile. The company continues to advance its stated strategy to build a critical mass of tin resources with a near term production profile, to advance the projects towards production and to establish Greenhills Resources as a standalone tin platform offering exposure to a pan-African tin portfolio to investors.

Under the terms of the agreement, Greenhills Resources commits to conduct due diligence on the Uis Tin Project, following which, if a successful outcome is attained, Greenhills Resources intends to acquire the initial 49% shareholding for a consideration equal to 41,000,000 ordinary shares in Bushveld Minerals (a total sterling amount of approximately £0.65m at the closing price on 12 December 2016). The agreement provides for Greenhills Resources to conduct due diligence on the Project over the period to 31 March 2017. The proposed acquisition is also subject to, inter alia, regulatory approvals and negotiation of definitive agreements, including a share purchase agreement.

Fortune Mojapelo, CEO of Bushveld Minerals, commented:

"The completion of the potential acquisition would see Bushveld Minerals acquire a substantial interest in one of the largest undeveloped opencast hard rock tin deposits in the world positioning Greenhills Resources as one of the most significant tin platforms on AIM.

This development is aligned with our long-stated strategy to establish Greenhills Resources Limited and Lemur Resources Limited as attractive stand-alone platforms with quality strategic partners and strong dedicated management teams to deliver long term shareholder value. For Greenhills this means consolidating a critical mass of mineable, low-cost resources with a near term production profile while for Lemur this means securing a quality power purchase agreement and an IPP license for a thermal coal-based power generation play in Madagascar.

All this while the Company continues to progress its flagship vanadium platform and progress towards completing the Vametco Alloys (Pty) acquisition."

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.

Bushveld Minerals

Fortune Mojapelo +27 (0) 11 268 6555

Beaufort Securities

Jon Bellis +44 (0) 20 7382 8300

Strand Hanson

Andrew Emmott / Ritchie Balmer +44 (0) 20 7409 3494

Blytheweigh

Tim Blythe / Camila Horsfall +44 (0) 20 7138 3204

Gabriella von llle +27 (0) 711 121 907

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a diversified AIM listed mineral development company with a portfolio of vanadium, iron ore, tin and coal greenfield assets in Southern Africa and Madagascar. The Company's flagship platform, the vanadium platform, includes the Mokopane Vanadium Project, the Brits Vanadium Project, and the Bushveld Iron Ore & Titanium Project. The tin platform comprises the Mokopane Tin Project whereas the Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers, makes up the Company's coal platform.

The Company's vision is to become the largest low cost integrated primary vanadium producer through owned low-cost high-grade assets. This includes the development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage solutions provider. Whilst the demand for vanadium remains largely anchored in a slow growing steel industry, Bushveld Minerals believes there is a strong potential for imminent significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.

Bushveld Minerals' 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 with a visible timeframe, low capex requirements and scalability are important factors in retaining an attractive exit option. 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 The Uis Tin Project

The Uis Tin Project Ownership Structure

The Uis Tin Project is held by Guinea Fowl Investments Twenty Seven (Pty) Ltd, which is 85% owned by Dawnmin Africa Investments and 15% by Small Miners of Uis, a Namibian Government owned subsidiary. Dawnmin Africa is a company owned 51.5% by Erongo Tin Limited and 49.5% by a consortium of Namibian shareholders comprising Namuis (Pty) Ltd, Havana Investments (Pty) Ltd and Sweltering Desert Investments (Pty) Ltd.

Project Location

The Uis Tin Mine is located in the west of central Namibia, approximately 130km east of the Atlantic Ocean coastline in the Erongo Region in Namibia. Swakopmund, the capital city of the Erongo Region and Namibia's fourth largest settlement, is approximately 165km due south of the Uis Project while the Namibian capital city of Windhoek is located approximately 270km southeast of the Uis Project. Tin (and tantalum) bearing pegmatites are found on three existing mining licenses (ML 129, ML 133 and ML 134), all of which are located within 35 km of the Uis town in Namibia.

Project Licenses

ML 134 contains numerous pegmatites which have been mined partially, and which have historical (non-JORC) reserve estimates. ML 133 contains a smaller tin/tantalite mine in a group of pegmatites known as the Naisnais Pegmatites, which have been partially exploited. ML 129 contains a small pegmatite that has been mined on a small scale by local artisanal miners.

· ML134 located within the Uis Pegmatite Belt. This area is regarded as the primary target area of the Uis Tin Project which hosts the historic Uis Tin Mine which commenced production in 1924, ceasing in 1990. Today it comprises of the historic open pits, waste rock dumps, tailings storage facility, derelict mine infrastructure buildings and defunct processing plant. The Uis Tin Mine historically exploited the most important tin deposit of Namibia, a deposit which ranks among the largest of its type in the world;

· ML129 located within the Uis Pegmatite Belt. This area hosts the B1 and C1 pegmatite tin and tantalum deposits which have been historically explored, from which a historic "resource" and "reserve" statements exist (non-JORC compliant), and is currently being mined on a small scale by the Small Miners of Uis (SMU); and

· ML133 within the Nainais-Kohero Pegmatite Belt which hosts the historic Tin Tan Mine. This mine has been intermittently operated since the 1920's and is currently mined on a small scale by the SMU.

Geology

The large and important rare metal pegmatites of the Uis pegmatite field evolved late in the history of the Damara Orogen. The Uis pegmatites are large, layered, unzoned, pervasively albitised and fine- to coarse-grained bodies. The pegmatites appear on plan as lenticular, linear or slightly sigmoidal shapes that tend to thicken towards the centre and pinch out rapidly at either ends.

Licence ML134 contains the historic Uis Tin Mine, where production commenced in 1924, and has historic "reserves" sufficient for another 75 years of production. The Uis Tin Mine historically exploited the most important tin deposit of Namibia, a deposit which ranks among the largest of its type in the world. The Uis pegmatites are confined to a narrow regional belt of metasediments of the Uis Formation that has been preserved in a graben of a portion of the intracratonic branch of the Damara Orogen since Proterozoic times. These pegmatites are found within schistose and quartzose rocks of the Khomas Subgroup, a division of the Swakop Group, which have been subjected to intense tectonic deformation and regional metamorphism.

Detailed geological mapping at Uis since 1972 suggests that the Uis swarm of pegmatites consists of over 100 individual pegmatite bodies. Zones of country rock alteration may indicate the presence of mineralised pegmatite deposits as all known pegmatites are surrounded by a halo of intensely altered, bleached or fractured rock. The presence of tourmaline in the Damara Orogen is arguably the single most reliable pathfinder indicator mineral of mineralised pegmatites. Tourmaline-bearing wall rocks appear as an envelope completely surrounding the rare metal pegmatites and follow closely the outline of the pegmatites along strike.

License ML133, colloquially referred to as the Nainais tin-tantalite deposit, has hosted the historic Tin-Tan Mine, an area which has been mined and prospected for tin and tantalite on a stop-start small scale basis since the 1920's. This deposit is located within the Nainais-Kohero Pegmatite Belt whose pegmatites have a similar origin of intrusion as those of the neighbouring Uis Pegmatite Belt.

Four basic mineralised pegmatites have been recognised in the Nainais deposit area:

· tin rich pegmatites which have cassiterite concentrated in altered pegmatite margins which are muscovite-rich with medium to coarse textures;

· pegmatites with erratic tin distribution which are complexly zoned and contain tourmaline. Here the tin is concentrated in the course-textured rocks;

· pegmatites with low yet evenly distributed tin content which are feldspar rich and have a uniform texture in which muscovite books, tourmaline and garnet occur; and

· tourmaline-garnet pegmatites hosting no tin.

Mineralisation

Uis Pegmatites (ML 134 and ML 129)

The tin mineralisation of the Uis pegmatites consists of black cassiterite grains ranging in size from tiny specks to very coarse grains up to 25mm in diameter with 60% of the grains in the 1mm to 5mm range. High values of up to 15% Sn over 1m or more of sample length have been recorded within the Uis pegmatites, though the average grade is generally

Nainais Pegmatites (ML 133)

Tin mineralisation occurs in pegmatites within Damara schists or the Salem granites where two distinct styles of mineralisation have been described:

· tourmaline-rich pegmatites, which are most common within those pegmatites that have intruded associated granites and occur close to intrusive contacts. Here tournamile has replaced quartz and feldspar within distinct bands on the pegmatite margins, there is very little mica (muscovite) and is often associated with the presence of garnet and topaz. Abundant tourmaline is intimately associated with cassiterite along the altered pegmatite contacts; and

· tin-rich pegmatites, the greatest development of which is within the Damara schists and near to the contacts with associated granites, but not within the granites themselves. Here alteration predominates, causing finer grained zones in places with muscovite, lithium-tourmaline and cassiterite replacing feldspar, quartz and tourmaline. This secondary cassiterite and lithium-tourmaline is distributed in zones/bands near to and paralleling pegmatite margins which is the product of metasomatic replacement of feldspar and quartz by gaseous solutions containing boron and tin. The best sites of cassiterite mineralisation are in steeply dipping schists and in structural bend/fold traps within the host schists next to a discordant contact with the granites.

Tantalite occurrence and other mineral associations are in general similar to the cassiterite in schist-hosted altered pegmatites containing muscovite, lithium minerals and quartz blows. At Nainais tantalite occurs sporadically in blows of very coarse grained altered white feldspar/quartz rock with muscovite.

Historical Exploration Work

The Uis tin deposits, specifically those of the Uis Tin Mine, have been the focus of numerous geological, mineralogical and metallurgical investigations undertaken by various companies and academics since its official recorded discovery in 1911. The definition of historic mineral resource or reserve estimates can be regarded as "an estimate of the quantity, grade or metal or mineral content of a deposit that an issuer has not verified as a current mineral resource or mineral reserve and which was prepared before the issuer acquiring, or entering an agreement to acquire an interest in the property that contains the deposit".

The exploration, production and mineral resource information pertaining to the Uis Project, and specially the Uis Tin Mine, has therefore been classified as historic exploration information, historic production and historic mineral resources or reserves. The outdated nature of the production information and mineral resource estimates provided in the documentation pertaining to that period has resulted in the use of the terms "resources", "orebody" and "ore reserves", which are not compliant with the current definitions of these terms. The information provided in this historic ownership section uses such terms in their original context but it is import important to note that any reference to the terms "resources", "orebody" or "ore reserves" cannot not be relied upon.

South African Iron & Steel Industrial Corporation Limited (Iscor), through its subsidiary Industrial Minerals Mining Corporation (Pty) Ltd (Imcor), owned the mining and prospecting licences over the Uis Tin Mine and surrounding areas for the majority of the Uis Tin Mines production history. The ownership of the Uis Tin Mine and the historic exploration and production undertaken by the various exploration/production companies which held the rights to the Uis Tin Mine are summarised as follows:

· 1911 Mine was discovered by Dr Paul of the Duetsche Kolonial Gesellschaft.

· 1923 August Stauch purchases a majority of known tin orebodies in the Omaruru, Karibib and Usakos districts, consolidates them into Namib Tin Mines Limited. Production is attempted on a small scale.

· 1930 - 1933 Solar Development Company Investigates properties but does not purchase them.

· 1938 Friedrich Krupp AG Purchases Uis tin rights with plans to undertake production on a large scale. Outbreak of WW II cancels all mining plans.

· Beginning of World War II Custodian of Enemy Property acquires all holdings.

· 1948 Angus Munro Purchased properties from the Custodian of Enemy Property.

· 1951 Uis Tin Mining Company (SWA) Limited begins large scale mining.

· 1958 Imcor (Industrial Minerals Mining Corporation (Pty) Ltd buys Uis and other properties owned by Namib Tin Mines Limited.

· 1990 Uis Mine closes owing to collapse of the tin price in the 1980s

· 1994 Small Miners of Uis begins small scale mining.

· 2011 Procomex Company undertakes a technical due diligence assessment which culminate in a bulk sample being collected

· 2014 Riverdeep Resources compiles historic exploration and production data in conjunction with the SMU in order to apply for a Mining Right.

Previous Resource Estimates

Mineral "Resource" and "Reserve" estimations were historically undertaken by the various owners and explorers of the Uis Project following closure of the Uis Tin Mine in 1990. These were all estimated prior to the establishment of the SAMREC Code.

Whilst of significant historic interest, none of the historic sampling was correlated with a proper quality QA/QC programme and therefore does comply with current international reporting standards including those of SAMREC.

· ML134 - Uis Tin Mine

The most recent historic resource statement pertaining to the Uis Tin Mine is presented in the May 1989 SRK Life of Mine Plan Report for the period 1987 to 2063. This statement was historically reported as a reserve, but should be considered as an equivalent (historic) current day resource statement. This estimate was mirrored in the Namibia Small Miners Assistance Center 1989 CPR. This resource statement considered 16 pegmatite orebodies, all of which outcropped on surface, each of which was geologically re-evaluated by Iscor. A total of 70,323,750 tons at a grade of 0.136% Sn was estimated.

· ML133 - Tin Tan Mine

No historic resource estimate exists for the Tin Tan Mine.

· ML129 - B1 and C1

In 2001 a project Viability Study document was prepared by Falconbridge and the SMU to support a loan application for ML129 from the Minerals Development Fund. The resources reported used results from the exploration work conducted by Falconbridge, which included results from test pits, trenches, reverse circulation drilling, core drilling, chip sampling and bulk sampling. A historic resource of 1,379,906 tons at 738 ppm SnO2 and 151 ppm Ta2O5 was estimated.