The Bushveld Minerals Limited (LON: BMN) share price surged 18.8% after announcing that it had entered into a binding term sheet with Southern Point Resources to provide it with funding worth US$69.5-US$77.5 million to provide the company with immediate working capital and help it retire some of its existing debt.
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The funds raised from Southern Point Resources will also serve as an equity investment from SPR into Bushveld Minerals. The funds will also act as a marketing and working capital solution to replace the Group's existing arrangements as and when they expire over the coming 5-17 months.
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The SPR funds will also allow Bushveld to recommission Vanchem's Kiln-1. Here’s a breakdown of how the funds shall be utilised. First, SPR will invest ZAR150 million (~US$8.1 million) to fund the ongoing expansion of production at Vanchem.
SPR also wants to purchase 50% of the shares in Bushveld's subsidiary, which owns its Vanchem vanadium plant and its 64% equity interest in its subsidiary, which owns its Mokopane project, for a total of ~US$25 million.
Southern Point Resources will also make a US$12.5 million equity investment in Buhsveld Minerals at the same equity price as Orion Mine Finance (Orion).
Craig Coltman, Bushveld Minerals CEO, commented: “I am pleased to announce this comprehensive transaction, which will place the Company in a much stronger financial position once complete… Introducing a partner at Vanchem provides a pathway for the Group to increase production beyond the base case and would be value accretive, with synergies arising from Vanchem being able to access a steady supply slag with high vanadium content from the Highveld facility. Finally, going back to the Orion Convertible Loan Note restructuring, we continue to work towards closing the transaction before the November due date.”
Southern Point Resources commented: “Southern Point is proud to announce this series of collaborative transactions which will enable Bushveld to restructure their current balance sheet and allow all stakeholders to unlock significant benefit from a unique set of underlying assets which have much potential. This is especially interesting considering Vanadium's critical role in the global drive toward carbon reduction and the energy transition.”
Bushveld Minerals share price.
The Bushveld Minerals share price surged 18.77% to trade at 2.4050p, from Friday’s closing price of 2.0250p.
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