Bushveld updates sales and marketing agreement with Wogen

Diversified mineral development company Bushveld Minerals announced on Tuesday that, following its previous announcement on 20 March regarding a definitive sales and marketing agreement with Wogen Resources, its subsidiary Bushveld Vametco had agreed with Wogen to retire in full the $3m prepayment facility and to simultaneously increase the Vametco Alloys working capital facility by same amount from $6m to $9m.

The AIM-traded firm had previously announced that the $3m prepayment financing formed part of the acquisition funding for Bushveld Vametco's acquisition of the 78.8% interest in Strategic Minerals Corporation from Evraz Group, which completed on 6 April.

Whereas the agreement provided for full repayment of the prepayment facility by the end of 2018, the company said it had taken the decision to retire the facility much sooner and expand the working capital facility to ensure greater flexibility in the financing of product sold.

Wogen would continue to market Vametco's Nitrovan product globally on an exclusive basis, with the exception of Japan and Taiwan which were covered exclusively by Sojitz Noble Alloys Corporation, the minority partner in SMC.

“The retirement of the prepayment facility at such an earlier point than initially anticipated is testament to the quality of Vametco's operations and the extent to which the vanadium market has strengthened in the past year,” said Bushveld’s CEO Fortune Mojapelo.

“Wogen continues to be a supportive and beneficial partner and its increase in the working capital facility from $6m to $9m we believe demonstrates their confidence in Bushveld Vametco's strategy and vision going forward.

“This is an exciting time for the company and I look forward to updating our shareholders with our progress in due course.”