Bushveld Minerals Limited (LON:BMN) has agreed a deal that will take it another step closer to its acquisition of the Vametco vanadium mine in South Africa.
The company plans to buy a 78.8% stake in Strategic Minerals Corporation, Vametco's owner, from Evraz Group.
To help move the deal along, Bushveld said it would provide funding to Oakleaf Investments Holdings, which owns a 10% shareholding in Vametco.
Oakleaf needs the finances to settle its loan with Gingko Trading Proprietary Limited, which supported the company’s acquisition of its stake in Vametco in 2014.
Bushveld has signed a deed of settlement and undertaking (DSU) with Oakleaf and Gingko.
The agreement will help facilitate a change in the ownership of one of Vametco's Black Economic Empowerment (BEE) partners.
Jaxson 640, led by investment professional Bill Chipane, is to acquire a controlling interest in the BEE shareholdings in Vametco from a consortium led by Avacap, giving it a 21.2% stake in Vametco
The Jaxson transaction will take place alongside Bushveld's proposed acquisition of Strategic Minerals Corporation from the Evraz Group, which was announced last May.
"The signing of the DSU with Gingko is an important step in the completion of the Jaxson-Avacap agreement and, as such, a further important milestone towards the completion of our acquisition of Strategic Minerals, “ said chief executive Fortune Mojapelo.
Shares jumped 7.67% to 8.07p.