Bushveld Minerals, a leading producer of vanadium, has announced a refinancing agreement with Orion Mine Finance, a global mining investment firm. The deal will extend the maturity date of Bushveld’s existing convertible loan notes to January 31, 2024, and refinance its convertible debt obligations of approximately $46.9 million.
The refinancing package consists of four components: a conversion of 10% of the outstanding balance into shares, a new convertible loan note, a term loan, and a supplemental royalty. The new convertible loan note will have a principal amount of $20.0 million, a coupon rate of 10%, and a conversion price of $0.25 per share. The term loan will have a principal amount of $15.0 million, an interest rate of 10%, and a repayment schedule of 12 equal quarterly instalments starting from June 2024. The supplemental royalty will be a 1% net smelter return on Bushveld’s vanadium sales, capped at $10.0 million.
The refinancing agreement is subject to several conditions, including the entry into finance and security documents, the approval from Bushveld’s shareholders, the raising of at least $12.0 million through new ordinary shares, the consent from the South African Reserve Bank’s Financial Surveillance Department, and the completion of the Share Exchange transaction between the company and minority shareholders.
The Share Exchange transaction is a proposed simplification of Bushveld’s corporate structure, whereby the company will acquire the remaining 49.5% interest in Bushveld Vametco Limited, the owner of the Vametco vanadium mine and plant, from Yellow Dragon Holdings Limited. The transaction will increase Bushveld’s effective interest in Vametco from 59.1% to 100%.
Bushveld’s CEO, Fortune Mojapelo, said that the refinancing agreement with Orion, which has supported the company since its initial investment three years ago, was a key part of the company’s strategy to restore value and deliver its operational targets. He also said that the refinancing would provide certainty and flexibility as the company moved forward with the other elements of its financial package.
Bushveld Minerals is a vertically integrated primary vanadium producer, with a diversified vanadium product portfolio, serving the steel, energy, and chemical sectors. Vanadium is a metal with unique properties that make it suitable for various applications, such as strengthening steel, storing renewable energy, and enhancing battery performance. According to the World Bank, the global demand for vanadium is expected to grow by 2.6% annually until 2030, driven by the increasing use of vanadium in steel and batteries.
The refinancing agreement with Orion is a positive development for Bushveld Minerals, as it will enable the company to reduce its debt burden, improve its cash flow, and focus on its core business of vanadium production. The company also has the potential to benefit from the rising demand for vanadium in the global market, especially in the green energy sector. Bushveld Minerals is well-positioned to become a leading player in the vanadium industry, with its high-quality assets, low-cost operations, and diversified product portfolio.
Source: [Mining Review]
