Fortune Mojapelo
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Diversified mineral development company Bushveld Minerals has agreed exclusivity to complete a confirmatory due diligence for the acquisition of financially troubled Evraz’s controlling interest in Vametco’s 473-employee vanadium mine and plant, located near Bushveld’s recently acquired vanadium project in Brits.
Bushveld CEO Fortune Mojapelo described Vametco as a low-cost producing asset with established management that had collectively worked across all the vanadium processing plants in South Africa.
Bushveld would need to raise additional capital to complete the acquisition.
The company said that the proposed deal was in line with the company’s strategy of building a vanadium platform and Bushveld would now advance funding opportunities to meet the initial payment on May 12, when a $500 000 exclusivity fee would become payable to Evraz.
During the period of exclusivity to May 5, Bushveld shares would be suspended from trading on the London Aim.
The transaction would involve the take-up of Strategic Minerals Corporation’s 78.8% economic interest in the mine and plant, which was one of two vanadium producing operations in South Africa.
Bushveld pointed out that Vametco Holdings was 25% owned by two black economically empowered companies, which include interests for the local landowners and employees.
Vametco Alloys had a mining right for vanadium and other associated minerals, over portions of farms in Brits, where it operated a mine supplying ore to its vanadium processing plant located on the same properties.
Vametco Alloys made use of the salt roast processing method to process vanadium-rich magnetite concentrate from its mine to produce 2 700 t of vanadium a year in the form of Nitrovan, a patented vanadium product used in the steel industry, and vanadium oxide.
The mine had a resource of more than 30-million tonnes, which was sufficient to support the operations for more than 20 years at current production levels.
Scope existed to expand production capacity through targeted debottlenecking interventions at limited capital expenditure.
The resource of Bushveld’s vanadium project in Brits appeared to comprise the strike continuation of the Vametco Alloys mine, which could enhance the Vametco Alloys operations through its contribution of shallow vanadium rich resources.