Bushveld Minerals Ld - Successful Raise of US$35M Convertible Loan Note

Market Abuse Regulation ("MAR") Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

9 November 2020

Bushveld Minerals Limited

("Bushveld Minerals", "Bushveld" or the "Company")

Successful Raise of US$35 million Convertible Loan Note Instrument with Orion Mine Finance

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage provider, with ownership of high-grade assets in South Africa, is pleased to announce that, pursuant to an agreement of 6 November 2020, amending the investment agreement between Bushveld and Orion Mine Finance ("Orion") and the related convertible loan note instrument (the "Instrument") first announced on 30^th September 2020, Orion has agreed, through an affiliate of Orion, to subscribe for up to the entire US$35 million of convertible loan notes under the Instrument.

As an adjustment to the previously announced terms of the Instrument, the conversion price of the convertible loan notes has been set at 17 pence. All other terms remain unchanged.  The terms of the transaction are summarised below. The proceeds from the issue of the convertible loan notes will go towards the first phase of Vanchem' s critical refurbishment programme and debt repayment.

The issue of the convertible loan notes is conditional, inter alia, on completion of the US$30 million Production Financing Agreement ("PFA"), also announced on 30^th September 2020. The Company continues to progress completion of the remaining conditions precedent under the US$30 million PFA.

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: 

"We are pleased that Orion has once again shown strong support for the Company and its growth story. While we did receive widespread interest from other investors in the Instrument, Orion's willingness to upsize its investment in line with the terms of its existing commitment made them the natural investor for the entire US$35 million. We welcome this vote of confidence in Bushveld.  Importantly, we have agreed a 17 pence conversion price with Orion, representing a premium of circa 39% to the Bushveld closing share price as at 6 November 2020, to limit dilution to existing shareholders."

Details of the transaction:

Bushveld intends to serve 15 business days' notice on Orion to subscribe at any time after the date of satisfaction of the conditions precedent of the PFA up to 30 November 2020. Bushveld can draw a minimum of US$10 million and a maximum of US$35 million.

Financing terms of the Instrument and convertible loan notes

§ A fixed 10 per cent per annum coupon with a three year maturity date from the drawdown date.

§ All interest will accrue and be capitalised on a quarterly basis in arrears but compounded annually.

§ Accumulated capitalised and accrued interest is convertible into Bushveld ordinary shares. All interest and principal, to the extent not converted into ordinary shares, is due and payable at maturity date.

§ Funds raised are to be used for capital investment purposes for the first phase of Vanchem's critical refurbishment programme, and the balance for debt repayment purposes.

Drawdown

§ Bushveld can serve 15 business days' notice to Orion drawdown in one tranche only, for a minimum of US$10 million and a maximum of US$35 million, at any time from the date of satisfaction of the conditions until 30 November 2020.

§ The issuance of convertible loan notes is conditional, inter alia, on completion of the PFA.

Conversion feature

§ Between drawdown and the Instrument's maturity date Orion may, at their option, convert an amount of the outstanding debt, including capitalised and accrued interest, into Bushveld ordinary shares as follows:

-       First six months: Up to one third of the outstanding amount;

-       Second six months: Up to two thirds of the outstanding amount (less any amount previously converted);

-       From the anniversary of drawdown until the maturity date: the outstanding amount under the Instrument may be converted;

-       Bushveld also has the option to convert all, but not some, of the amount outstanding under the Instrument, if its volume weighted average share price is more than 200 per cent of the conversion price over a continuous 15 trading day period, a trading day being a day on which the AIM market is open for the trading of securities.

§ At any time until the convertible maturity date, Orion may convert the debt as above mentioned into an amount of ordinary shares equal to the total amount available for conversion under the Instrument divided by the conversion price of 17 pence.

General Meeting

A general meeting of shareholders has been convened for 10 a.m. on 27 November 2020 at Oak House, Hirzel Street, St. Peter Port, Guernsey GY1 3RH to approve, amongst other matters, the necessary additional authorities to issue the maximum amount of shares arising on conversion. A further announcement in this regard was made today.

For further details on the terms of the PFA, Instrument and convertible loan notes refer to the Bushveld Minerals announcement on 30^th September 2020.

ENDS

Enquiries: [email protected]

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low-cost, integrated, primary vanadium producer, with ownership of high-grade vanadium assets. 

The Company's flagship vanadium platform includes a 74 per cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a primary vanadium mining and processing company; 100 per cent of Bushveld Vanchem, a primary vanadium processing facility with a beneficiation plant; the Mokopane Vanadium Project and the Brits Vanadium Project.

Bushveld's vision is to become a significant, low-cost, integrated primary vanadium producer through owning high grade assets. Whilst the demand for vanadium remains largely anchored in the steel industry, Bushveld Minerals believes there is strong potential for an imminent and significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries. Bushveld Energy, the Company's energy storage solutions provider, plays a leading role in the development and promotion of the role of vanadium in this market.

The Company's approach to project development recognises that, whilst attractive project economics are imperative, they may be insufficient to secure capital to bring them to account. A clear path to production within a visible timeframe, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. This philosophy is core to the Company's strategy in developing projects.

Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com.

About Vametco

Vametco is located near Brits on the Western Limb of the Bushveld Complex. The integrated operation comprises a vanadium ore mine and a processing plant that produces mostly Nitrovan, a trademark product sold in major steel markets across the world. The mine lies adjacent to the Brits Vanadium Project, which will in future serve as an alternative source of near surface run of mine ("ROM") ore feed to the Vametco plant.

The Vametco mining operation uses open pit bench mining methods to mine a well-defined orebody. The deposit is continuous with limited faulting and dips in a northerly direction at approximately 19 degrees.

ROM ore is fed into a primary, secondary and tertiary crushing circuit, followed by milling and magnetic separation to produce magnetite concentrates. The magnetite concentrates are fed into the extraction process which includes the kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide ("MVO") in rotary calciners. MVO is fed into the mix plant and finally into the shaft furnaces to produce Nitrovan. 

About Vanchem

Vanchem is situated at Ferrobank Industrial Park in Emalahleni Local Municipality, Mpumalanga Province in the Republic of South Africa. Vanchem is a primary vanadium producing facility with a beneficiation plant capable of producing various vanadium oxides, ferrovanadium and vanadium chemicals. Vanchem uses the salt roast beneficiation process, similar to the one used at Vametco. The plant comprises: a core salt-roast processing plant, including 3 roasting kilns, an electric smelting ferrovanadium converter, an alumino-thermic smelting facility, also located at Highveld, a vanadium chemical plant; and a rail siding linking the plant with Bushveld deposits and additional potential supply sources through the national rail network.

About Orion

Orion is a global alternative investment management firm with approximately US$6.2 billion under management (as of 3/31/2020). Orion specializes in institutional metals and mining investment strategies in the industrial and precious metals space. Orion's private equity, hedge fund, and merchant service divisions enable us to access in-depth knowledge of the global metals and mining supply chain and robust insight into the physical and financial demand driving global metals prices.

For more information visit www.orionresourcepartners.com.