Bushveld Minerals has satisfied the conditions required to drawdown the US$30 million under the Production Financing Agreement (PFA) and the unsecured Convertible Loan Notes of US$35 million, to be subscribed by Orion Mine Finance first announced on 30 September 2020.
The Company is in the process of drawing down funds under the PFA and has given notice to Orion to draw-down on the full amount of US$35 million under the Notes.
Bushveld will repay the principal amount and pay interest via quarterly payments determined initially as the sum of:
- a gross revenue rate (set at 1.175% for 2020 and 2021 and 1.45% from 2022 onwards, subject to adjustment based on applicable quarterly vanadium prices) multiplied by the gross revenue for the quarter; and
- a unit rate of US$0.443/kgV multiplied by the aggregate amount of vanadium sold for the quarter.
Once Vametco reaches vanadium sales of approximately 132,020 mtV during the term of the facility, the gross revenue rate and unit rate will reduce by 75% (i.e. to 25% of the applicable rates).
On each of the first three loan anniversaries, Bushveld has the option to repay up to 50% of both constituent loan parts (each may only be repaid once).
If Bushveld utilises the loan repayment option, the gross revenue rate and / or the unit rate will reduce accordingly.
The Company will raise a total of US$35 million through the issue of the Notes pursuant to the related Convertible Loan Instrument (the Instrument).
The Notes bear a fixed coupon of 10% per annum (which will accrue and be capitalised on a quarterly basis in arrears but compounded annually) and have a maturity date of three years from the date of issue (the “Maturity Date”).
The Notes will be issued in one tranche, in December 2020, upon receipt of funds by the Company. The Notes are convertible by the holder into Bushveld ordinary shares of 1 pence each in the Company at a price equal to 17 pence.
Between issue and the Maturity Date, Orion may, at their option, convert an amount of the outstanding Notes, including capitalised and accrued interest, into Bushveld ordinary shares as follows:
- First six months: Up to one third of the outstanding amount;
- Second six months: Up to two thirds of the outstanding amount (less any amount previously converted);
- From the anniversary of drawdown until the maturity date: the outstanding amount under the Instrument may be converted Bushveld also has the option to convert all of the Notes outstanding, in one tranche, if the volume weighted average share price is more than 200 per cent of the conversion price over a continuous 15 trading day period, a trading day being a day on which the AIM market of the London Stock Exchange is open for the trading of securities.