Bushveld Minerals Limited (LON: BMN) has agreed a restructuring of the bridge loan it took out to complete the acquisition of a 78.8% stake in Strategic Minerals Corporation, which transformed it into a "significant player in the global vanadium market".
The firm said repayment of the bridge loan facility of up to US$11mln with Barak Fund SPC Limited, which was due within two months of drawdown, has been extended to 30 June 2017.
Bushveld said that, following this restructuring, the group has repaid the US$8.8m loan principle by the May 31, as required, as well as an additional US$1.2mln on June 2, to bring the total repayment of to US$10.0mln.
Therefore, as of June 2, the balance that is outstanding to Barak, and payable by June 30, is US$1.0mln plus fees and interest, as previously disclosed.
The company said it remains confident of settling these final payments from internal cash flows without recourse to equity capital raises, as previously announced.
Post the end of June, Bushveld said it will only have the US$3.0mln prepayment facility with Wogen Resources Limited left in place as external debt.
The group expects to repay the Wogen Facility over a 15 month period prior to the end of 2018 out of operating cash flows.
"Unnecessary dilution" for shareholders avoided
Fortune Mojapelo, CEO of Bushveld Minerals Limited, said: "We are delighted with the progress we have made in settling the Bridge Loan which formed an essential aspect of concluding the Vametco transaction and enabled us to avoid unnecessary dilution for our shareholders.
“Acquiring SMC for less than 10% of its replacement cost, through a highly leveraged acquisition model and repaying 70% of the debt within 2 months of the acquisition is not a small achievement.”
He added: "Of course, the real story is our strategy going forward for the Vametco asset and particularly its contribution to our ongoing efforts of building a deeply integrated vanadium platform."
Strategic Mineral, acquired from Evraz Limited, owns the Vametco open pit mine and processing plant, which is next to Bushveld's Brits Vanadium project in South Africa.
In reaction to the loan restructuring news, Bushveld shares were 11% higher in early morning trading, up 0.92p to 9.30p.
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