Bushveld Minerals completes BEE supported transaction

Bushveld Minerals Limited provided the following update on the completion of the change in ownership of Vametco Holdings (Proprietary) Limited's ("Vametco") Black Economic Empowerment ("BEE") partners.

Highlights:
•Jaxson 640 (Proprietary) Limited's ("Jaxson 640") BEE stake acquisition in Vametco completed with payment of ZAR 8.522 million (US$ 0.655 million) to the Avacap (Proprietary) Limited consortium ("Avacap Consortium");
•Bushveld agrees to vendor finance Jaxson 640 for the above amount of ZAR 8.522 million;
•Bushveld completes a Settlement and Undertaking Agreement with Gingko Trading (Proprietary) Limited ("Gingko") ("Gingko Agreement") and pays ZAR 7.678 million (US$ 0.59 million) and replaces Gingko as lender to Vametco's BEE shareholding structure;
•Avacap Consortium's nominated directors on the board of directors of Vametco and Vametco Alloys (Proprietary) Limited ("Vametco Alloys") resign and are replaced by Jaxson 640 nominees.
 
Further to the Company's announcement on 22 February 2017 ("Supported Acquisition of BEE Shareholding"), Bushveld can now confirm that Jaxson 640 has completed the acquisition of the Avacap Consortium's interest in Vametco and will now replace the Avacap Consortium as major BEE partner to Strategic Minerals Corporation ("SMC").  Jaxson 640 together with the local communities, on whose land the Vametco mine deposit and processing plant are located, will now hold a 26% shareholding in Vametco.
Under the terms of the acquisition, as previously announced, Jaxson 640 agreed to purchase the Avacap Consortium's interest in Vametco for a total sum of ZAR 8,522,103 (US$ 655,189), comprising a purchase consideration of ZAR 5,000,000 (US$ 384,405), the settlement of a shareholder loan, with interest, of ZAR 2,000,000 (US$ 153,762) principal and an additional ZAR 1,000,000 (US$ 76,881) premium. In addition, Jaxson assumed its share of the existing debt of approximately ZAR 39.5 million (US$ 3.04 million) historically incurred in establishing the existing BEE shareholding in Vametco.
The acquisition was conditional on, among others,
•The completion of the acquisition of SMC by Bushveld Vametco Limited;
•Bushveld entering into the Gingko Agreement in terms of which Bushveld would settle all demonstrable funding (and accumulated interest thereon) that Gingko advanced to the Avacap Consortium as part of the 2014 acquisition of the BEE shareholding in Vametco;
•Consent to the transaction being granted by Nedbank Limited, the lenders to the Avacap Consortium's original BEE transaction with Vametco.
The Company confirms that this transaction is now complete. Furthermore, the Company announces that it has reached a vendor funding agreement with Jaxson 640 in terms of which Bushveld has provided to Jaxson 640 funding totalling ZAR 8,522,103 (US$ 655,189) to enable it to complete the transaction. The funding has been provided in the form of a vendor loan and will be repaid to Bushveld from dividends due to Jaxson 640 from Vametco over a period of 5 years.
As announced on 28 March 2017, Bushveld entered into the Gingko Agreement in terms of which Bushveld would replace Gingko as lender to the BEE shareholders of Vametco. Accordingly, Bushveld has paid Gingko a total of ZAR 7,677,983.49 (US$ 590,292), comprising a principal and accumulated interest amount of ZAR 6,427,983.49 (US$ 494,190) and a ZAR 1,250,000.00
(US$ 96,101) premium for the settlement.

The total outlay by Bushveld in respect of the BEE transaction was ZAR 16,200,087 (US$ 1,245,480).

Pursuant to the completion of the Jaxson BEE transaction, the directors representing the Avacap Consortium on the boards of directors of Vametco and Vametco Alloys have since resigned and will be replaced by Jaxson 640's representatives.

Jaxson 640 is led by Bill Chipane, an investment professional with more than ten years in the metals and mining investment banking experience.  Mr Chipane is well known to Bushveld Minerals and has been a consultant to the group for some time. 

Fortune Mojapelo, CEO of Bushveld Minerals, commented, "We are delighted to announce, now that all the conditions have been satisfied, that the Jaxson 640 transaction Bushveld supported and vendor financed is now complete.  We are pleased to have the Jaxson 640 team and the local land-owners and communities, who are beneficiaries of this transaction, as our partners at Vametco and look forward to working with them in future."

Bushveld Minerals is an AIM diversified mineral development company with a portfolio of vanadium, titanium, iron ore, tin and coal assets in Southern Africa.