Bushveld signs agreement to buy Vametco for $17M

 

9TH MAY 2016 BY: MARTIN CREAMER

 

 

Diversified mineral development company Bushveld Minerals has signed a share purchase agreement with Evraz for control of the Vametco vanadium mine and processing plant in South Africa’s North West province. This signing by the London Aim-listed company, headed by CEO Fortune Mojapelo, follows last month’s exclusivity deal of the potential acquisition of Evraz’s 78.8% economic interest in Strategic Minerals Corporation, a holding company for the group of companies that own the producing Vametco. Its wholly owned Bushveld Vametco Limited has put in an offer of $17.2-million, which Mojapelo described as being “less than 10% of the replacement value”. The company said in a release to Creamer Media’s Mining Weekly Online that it was at an advanced stage of negotiation with funding partners. The mine’s 30-million-tonne-plus resource is said to be sufficient to support the operations for more than 20 years at current production levels. Bushveld’s own vanadium project in Brits is a continuation of the strike of the Vametco mine’s deposit, with similar vanadium grades. Previously disadvantaged South Africans hold a quarter of the shares of the 473-employee operation, which also produces vanadium (III) oxide, which is said to be environmentally preferred to vanadium pentoxide and more suited to downstream vanadium chemicals production, which dovetails with Bushveld’s aspirations to manufacture electrolytes locally for the vanadium flow battery energy storage industry. Situated 8 km north-east of Brits, Vametco Alloys has a capacity to produce 2 750 t of vanadium a year as patented vanadium nitride and vanadium oxide. Last year’s all-in cash cost of production was $17.33/kg of vanadium and revenue was R629-million. Evraz Highveld Steel is currently in business rescue.