Bushveld Minerals' shares surge on Strategic Minerals Corp deal-financing update
(ShareCast News) - Shares in Bushveld Minerals are up more than 20% after it signed a definitive sales and marketing agreement with Wogen Resources Ltd to assist with the financing needed to acquire a majority stake in Strategic Minerals Corp.
The Wogen financing comprised a $3.0m product prepayment as part of the acquisition debt package, and inventory and receivable financing of $6.0m to optimise the position of the operations of Vametco Alloys.
Bushveld Vametco Ltd was seeking to clinch a 78.8% interest in Strategic Minerals from Evraz Group SA. Bushveld Vametco had previously provided the required proof of funding to Evraz, in the form of signed term sheets, to secure funding for the acquisition.
Bushveld Vametco had now signed the agreement with Wogen based on which the latter would become a marketer and distributor of Vametco Alloys Ltd's Nitrovan production and provide financing to the Bushveld Vametco.
The agreement provided for full repayment of prepayment facility by end-2018, notwithstanding it being repayable on demand.
The overall term of the agreement was five years, renewable by mutual agreement and Wogen would 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 had agreed to guarantee Bushveld Vametco's payment obligations.
At 11:15 GMT, shares in AIM-listed Bushveld were up 20.22% to 5.35p each.