Bushveld Minerals: Repayment of Duferco convertible loan note

27th October 2021

Repayment of Duferco convertible loan note

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage solutions provider with ownership of high-grade assets in South Africa, is pleased to announce the final terms for the repayment of the US$11.5 million unsecured convertible loan notes held by Duferco Participations Holding S.A. (“Duferco”).

On 18 December 2020, the Company announced that the US$11.5 million remaining balance of the Duferco convertible notes was due for payment on 8 November 2021. Further to the announcement on 21 October 2021 that progress has been made in negotiations with Duferco regarding the remaining balance of US$11.5 million of the convertible loan notes, the Company is pleased to announce that agreement has now been reached to the effect that on 8 November 2021:

  1. Duferco will convert US$9 million of the principal outstanding under the loan notes into new ordinary shares of Bushveld; and
  2. the Company will repay the balance of US$2.5 million, together with accrued interest on the notes of approximately US$0.512 million in cash, to Duferco.

The terms of conversion remain the same as previously announced by the Company, being at a five per cent discount to the prevailing 10 day volume weighted average share price of ordinary shares of Bushveld leading up to the date of conversion. There is no lock in or orderly marketing period for the shares issued.

The Company has also agreed to pay, on Duferco’s behalf, working capital adjustment and deferred business completion payment amounts owing to Duferco Vanadium Alloys Proprietary Limited and Duferco Vanadium Proprietary Limited in terms of the Business and Share Purchase Agreement entered into between Bushveld, Duferco and others announced on 1 May 2019 in an aggregate amount of approximately US$2.2 million payable in South African Rands (ZAR32,006,496).

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:

“I am pleased that Duferco will convert US$9 million of the principal outstanding under the loan notes into Bushveld Minerals shares, which will reduce our debt position significantly while also making a material reduction at the net debt level given that most of the repayment will be made using Bushveld shares.”

“This will be the final payment of our US$53.5m acquisition, two years ago, of Vanchem, the remaining primary vanadium processing plant in South Africa (and one of only four such operational plants in the world). The acquisition structure, which comprised US$30.5m in cash and US$23m in the form of a 2-year convertible loan, allowed us to complete the important acquisition at a time, in November 2019, of falling realised vanadium prices that went on to average US$23/kgV in 2020. Yet, our conviction in the strategic importance of this asset to the Company’s quest to establish a significant low cost vertically integrated vanadium platform continues to grow, even as we progress the refurbishment plan to raise Vanchem’s production run rate levels to 2,600 mtV by the end of 2022, in the process diversifying our vanadium product portfolio while significantly improving Vanchem’s cost position.”

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