Shares in Bushveld Minerals Limited (LON:BMN) advanced in early deals as it agreed amended terms of its acquisition of the Vametco vanadium mine in South Africa, including a reduced purchase price.
The deal to buy Strategic Minerals Corporation from Russian mining giant Evraz Group SA was unveiled in April this year.
Bushveld was to pay vendor Evraz US$17.2mln in two tranches for a 78.8% stake in Strategic Minerals, the owner of the mine and the processing plant, but this has now been reduced to US$16.4mln.
In part to avoid reverse takeover rules on London’s AIM, Bushveld is partnering with private South African vehicle Yellow Dragon in the financing of phase one of the acquisition.
Under the terms of this partnership, Bushveld will have 45% of BVL, a special purpose vehicle established to act as a holding company for Strategic Minerals, while Yellow Dragon will hold the other 55%.
The deal is now scheduled to complete on or before March 31, next year which is around three months earlier than the previous long stop date of July 15 next year.
Bushveld's Fortune Mojapelo told investors the firm remained focused on completing the 78.8% interest acquisition in SMC as planned.
"Not only does the amendment ensure a reduced purchase consideration and an incentive to complete earlier than scheduled, but it also allows us to finance the entire acquisition as single package and eliminates any risk of partial completion of the transaction. Moreover, the revised structure ensures that, at US$1.646 million, much less cash is tied up in the transaction over a period in which Bushveld would have held a minority position in SMC pending completion of the entire transaction."
Bushveld shares are up 8.77% to 1.55p.