Bushveld Minerals Limited (LON:BMN), a diversified mineral development company with a portfolio of vanadium, titanium, iron ore, tin and coal assets in Southern Africa, announced today that on Friday 17 March 2017 it signed a definitive Sales and Marketing Agreement with Wogen Resources Limited (the “Agreement”).
This assists with the financing required for the conditional acquisition by Bushveld Vametco Limited (“Bushveld Vametco”) of a 78.8% interest in Strategic Minerals Corporation from Evraz Group SA.
Bushveld Vametco has previously provided the required proof of funding to Evraz, in the form of signed term sheets, to secure funding for the Acquisition Transaction. Bushveld Vametco has now signed the Agreement with Wogen Resources Limited based on which Wogen will become a marketer and distributor of Vametco Alloys Limited’s NitrovanTM production (the “Product”) and provide financing to the Bushveld Vametco Group (“Wogen Financing”).
The Wogen Financing comprises a US$3.0 million Product prepayment as part of the acquisition debt package for the Acquisition Transaction and inventory and receivable financing of US$6.0 million to optimise the position of the operations of Vametco Alloys. The Agreement provides for full repayment of prepayment facility by the end of 2018, notwithstanding it being repayable on demand. The overall term of the Agreement is five years, renewable by mutual agreement and Wogen will market the Product globally on an exclusive basis, with the exception of Japan and Taiwan which markets are covered exclusively by Sojitz Noble Alloys Corporation, the minority partner in SMC. Bushveld has agreed to guarantee Bushveld Vametco’s payment obligations under the Agreement.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, said of the Wogen Agreement, “We are pleased to welcome Wogen as a long term partner for the sales, marketing and distibution of NitrovanTM post completion of the Transaction. The Wogen Agreement not only takes us a step closer to completing the transformational acquisition of SMC but also provides important working capital finance for Vametco Alloys. We look forward to a fruitful and mutually beneficial relationship based on Wogen’s extensive experience in commodities trading and distribution across a range of commodity markets including vanadium, servicing customers across the globe.”
John Craig, CEO of Sanctuary Partners Limited, the parent company of Wogen Resources Limited commented, “We at Wogen are particularly pleased to be assisting Bushveld Vametco with this exciting acquisition and in supporting the company through the development of sales and distribution of its products on a global basis into the future”.
The signed Agreement with Wogen is conditional, inter alia, on the successful completion of the Share Purchase Agreement between Bushveld Vametco and Evraz.
As part of the Agreement, Wogen will receive 15,000,000 Bushveld warrants, each of which entitlies Wogen to subscribe at any time during the subscription period of three years in cash for one ordinary share in the capital of Bushveld Minerals Limited at the subscription price of 7.0 pence.
Further updates will be provided as appropriate.
