Bushveld Minerals Regulatory News (BMN)

22 April 2016

Bushveld Minerals Limited

("Bushveld" or the "Company")

Proposed acquisition of Vametco vanadium mine and plant in South Africa

Update regarding suspension of trading in shares

Bushveld Minerals Limited (AIM: BMN), a diversified mineral development company with a portfolio of vanadium, titanium, iron ore, tin and coal assets in Africa, provides the following update further to the announcement yesterday regarding the suspension of trading in its shares.

Bushveld is pleased to announce that it has agreed exclusivity for the acquisition of Evraz Group S.A.'s ("Evraz") 78.8% economic interest in Strategic Minerals Corporation ("SMC"), a holding company for a group of companies (the "Group"), which owns the producing Vametco vanadium mine and plant in South Africa ("Vametco Alloys") (the "Acquisition"). The Acquisition would be a reverse takeover under the AIM Rules and accordingly would require the publication of an admission document and be subject to shareholder approval. Accordingly, trading in the Company's shares on AIM will remain suspended until either an admission document is published or Bushveld announces its or Evraz's withdrawal from the Acquisition process.

The Acquisition, which remains subject to ongoing due diligence, financing and shareholder approval, would be transformational for Bushveld and is line with its stated strategy to seek brownfield developments and, should the acquisition be successful, will immediately provide the Company with access to vanadium production. The consideration for the Acquisition, if completed, would be fully payable in cash. There can be no certainty, however, that the Acquisition will proceed and further updates will be provided as and when appropriate.

Located on the western limb of the Bushveld complex, Vametco is of one of only two vanadium producing operations in South Africa. Vametco is a debt-free cash generating vanadium operator that is also BEE compliant.

The terms of the exclusivity agreement provide Bushveld with a period of exclusivity for six weeks from 24 March 2016 to 5 May 2016 in which to complete confirmatory due diligence (the "Exclusivity Period"). In consideration for the grant of exclusivity, Bushveld has placed US$500,000 (the "Exclusivity Fee") on deposit with its solicitors which will become payable to Evraz on the expiration of the Exclusivity Period if, by that time, Evraz has executed, but Bushveld has not executed, a sale and purchase agreement (the "SPA") (the form of which has already been agreed between the parties and is appended to the exclusivity agreement). The Exclusivity Fee will be offset against the acquisition consideration upon execution of the SPA by both parties.

The exclusivity agreement also grants Bushveld a right of first refusal with regard to any competing offers received by Evraz during the Exclusivity Period and a for further period of three months. Furthermore, if, during the Exclusivity Period, Evraz gives effect to an equity investment in SMC, the disposal of its interests in SMC or the disposal of any of the Group's assets, Evraz will pay to Bushveld a break fee of US$500,000.

The exclusivity agreement was entered into on 24 March 2016 and the undertakings with regard to the deposit of the exclusivity fee with Bushveld's solicitors were given on 7 April 2016.

Bushveld has sufficient working capital and facilities for its basic corporate activities for the time being but will, whether or not the Exclusivity Fee becomes payable, need to raise additional capital in order to complete the Acquisition and to continue to develop its existing assets.

Further announcements will be made in due course.

Fortune Mojapelo, CEO of Bushveld Minerals, said, "We are pleased to have agreed exclusivity with Evraz for the acquisition of the Vametco vanadium mine and plant in South Africa. The proposed acquisition is transformational for the Company and is exactly in line with our strategy of building our vanadium platform. Vametco is a low cost producing asset with an established management team who have collectively worked across all the vanadium processing plants in South Africa. The asset, located adjacent to our recently acquired Brits vanadium project, offers a unique opportunity to acquire a producing asset at a small fraction of the cost of a similar greenfield asset.

"We have undertaken significant due diligence on this asset for over the past 15 months and will now advance funding opportunities to meet the initial payment on 12 May 2016. We look forward to updating shareholders on the proposed acquisition in due course." 

About Vametco Alloys

Vametco Alloys is owned by SMC through its 75% shareholding in South African domiciled Vametco Holdings (Pty) Ltd ("Vametco Holdings").

In line with Black Economic Empowerment ("BEE") legislation in South Africa, Vametco Holdings is 25% owned by two BEE companies, which include interests for the local landowners and employees.

Vametco Alloys has a mining right for vanadium and other associated minerals over Portion 1 of the farm Uitvalgrond 431 JQ and Portion 1 of the farm Krokodilwaal 426 JQ, in Brits where it operates a mine supplying ore to its vanadium processing plant located on the same properties.

Vametco Alloys utilises a Salt Roast processing method to process vanadium-rich magnetite concentrate from its mine to produce 2,700 metric tonnes of vanadium in the form of Nitrovan (a patented vanadium product used in the steel industry) and vanadium oxide (V2O3). The mine has a resource in excess of 30Mt, sufficient to support the operations for more than 20 years at current production levels. Scope exists to expand production capacity through targeted de-bottlenecking interventions at limited capital expenditure.

The mine and plant employs 473 people and is an important economic contributor to South Africa and its immediate Brits environment. It has an established leadership team with extensive experience in vanadium processing, having collectively worked on all vanadium processing plants in South Africa.

Vametco Alloys is located adjacent to Bushveld Minerals' recently acquired Brits Vanadium project, a greenfield exploration project. The Brits Vanadium Project resource appears to comprise the strike continuation of the Vametco Alloys mine and could enhance the Vametco Alloys operations through its contribution of shallow vanadium rich resources.

Enquiries: info@bushveldminerals.com

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Notes to editors

About Bushveld Minerals Limited

Bushveld Minerals Limited is a mineral development company with a portfolio of vanadium-and titanium bearing iron ore, tin and coal assets in Southern Africa and Madagascar.

The Group owns the Bushveld Vanadium Project, Mokopane Vanadium Project, Bushveld Iron Ore Project and Mokopane Tin Project, located on the northern limb of the Bushveld Complex, South Africa. Bushveld also owns the Imaloto coal project in Madagascar, acquired in September, 2015, through its takeover of Lemur Resources.

Bushveld was admitted to the AIM of the London Stock Exchange in March 2012.