Bushveld Minerals Limited (LON:BMN) has agreed with Wogen Resources Limited to retire a US$3 mln prepayment facility that formed part of a wider sales and marketing agreement for Nitrovan, a vanadium product produced by Vametco, a company in which Bushveld now owns a significant stake.
Simultaneously, the existing working capital facility Vametco will increase by same amount from US$6mln to US$9mln.
The US$3mln 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 S.A, the previous owner of Vametco. Bushveld owns 45% of Bushveld Vametco, with joint venture partner Yellow Dragon holding the other 55%.
Wogen will continue to market Vametco's Nitrovan product globally on an exclusive basis, with the exception of Japan and Taiwan which are covered exclusively by Sojitz Noble Alloys Corporation, the minority partner in Strategic Minerals Corporation.
"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 Fortune Mojapelo, chief executive of Bushveld, in a statement.
“Wogen continues to be a supportive and beneficial partner and its increase in the working capital facility from US$6 to US$9 million we believe demonstrates their confidence in Bushveld Vametco's strategy and vision going forward.”