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Bushveld ups Vametco stake to 75%

Vanadium producer Bushveld Minerals (AIM:BMN) has increased its indirect interest in Vametco Alloys to 75%.
Bushveld ups Vametco stake to 75% Bushveld ups Vametco stake to 75% Bushveld ups Vametco stake to 75% Bushveld ups Vametco stake to 75% Bushveld ups Vametco stake to 75%

Bushveld now owns 75% of the Vametco vanadium mine and processing plant in South Africa

Staff reporter

The company has paid US$20 million to acquire another 21.22% interest in the holding company Strategic Minerals Corporation from Sojitz Noble Alloys.

Bushveld will then own 100% of Strategic, which holds 75% in Vametco, which includes a vanadium openpit mine and a processing plant in South Africa.

The company will pay $17.5 million in cash for the sale of shares and the remaining $2.5 million in cash in final settlement of accrued but unpaid dividends on the sale shares.

In May last year, the company became a producer by acquiring its first chunk of Bushveld Vametco for $17 million from the Evraz Group, which operated the mine through its holding in Strategic.

It upped its interest in November to 59.1% by acquiring another 26.6% stake for a $4.5 million cash payment, the issue of 54.8 million shares, two deferred payments of $600,000 in 2018 and 2019 and another payment in 2020 calculated using Vametco's EBITDA for that year.

Bushveld CEO Fortune Mojapelo said the newest acquisition fulfilled its aim 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 18 of R1.05 billion (US$70.8 million) and R521 million an increase of 139.1% and 429.6% respectively, compared to H1 2017," he said.

Mojapelo added that the acquisition put Bushveld in an advantageous position to deliver its growth strategy into a low-cost, vertically integrated vanadium platform.

Bushveld's shares were up 14.74% after the news Thursday to 21.8p (US28c).