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Bushveld Minerals Limited
An Emerging Integrated Vanadium Platform
13 June 2016
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2 6/14/2016
Introduction
Why Vanadium
Bushveld Minerals Vanadium Platform
The SMC/Vametco Transaction
3 6/14/2016
Bushveld Minerals is a mineral development company with a
portfolio of vanadium and titanium-bearing iron ore, tin and coal
assets in Southern Africa. The company has three development
platforms:
Bushveld Resources Ltd:
– Developing an integrated mine-to-market vanadium
business
– Owner of the Company’s flagship asset, Mokopane
Vanadium Project in Limpopo Province, South Africa
– Owns 84% of Bushveld Energy, an energy storage solutions
company focusing on vanadium redox flow battery
technology in Africa
Greenhills Resources: A portfolio of tin assets in Southern Africa
Lemur Resources: Developing an integrated thermal coal and
IPP project in Madagascar
Bushveld was admitted to the AIM of the London Stock
Exchange in March 2012
Introduction to Bushveld Minerals
Share information
Ticker BMN
Number of ordinary shares in issue 584,670,772
Share price* 2.0 p
Number of options in issue Nil
Market capitalisation* £11.5M
Warrants* (exercise prices = 2.4p, 5p, 3.4p, 4.75p, 12p) 79.6m
4
Source: Bloomberg (10 June 2016 close)
Source: Company records
6/14/2016
Introduction to Bushveld Minerals
5 6/14/2016
Vametco
Early production targeting
high grade zones of the
Groenfontein & Zaaiplats
deposits
• Secure IPP license for thermal
coal power generation
• Secure strategic partner for
development of integrated mine
to power plant play
Focus
Building a significant
integrated vanadium mining
and processing platform
Introduction
Why Vanadium
Bushveld Minerals Vanadium Platform
The SMC/Vametco Transaction
6 6/14/2016
1. Vanadium prices are at historic lows, with long term averages significantly above current levels
2. 90% of vanadium consumption concentrated in steel sector, with utility scale energy storage providing step change opportunity
3. Supply is concentrated geographically and in terms of feedstock source and is constrained
4. Significant supply deficit expected
5. Significant price improvement needed to stimulate new supply
6. South Africa is one of the leading primary vanadium producers, with low cost production base is well placed to fill looming
supply deficit
7. >40% improvement in V price since February 2016
7
Case for vanadium: The story to now
Market at the bottom of its commodity cycle, making this an ideal investment opportunity
6/14/2016
Source: Metal Bulletin, Roskill 2015 Report, TTP Squared
• High strength-to-weight characteristics
• Corrosion resistance
• Weldability
• Fabricability
8
Case for Vanadium - Uses
6/14/2016
Vanadium is a grey, soft, ductile high value metal with several unique characteristics that position them well in the
steel, alloys and chemicals sectors
• Able to exist in four different oxidation states
• Water-soluble
Steel
Chemicals
Source: Metal Bulletin, Roskill 2015 Report
59%
31%
4%
3% 2% 1% 0%
Vanadium Consumption by Application 2014
HSLA Special Steel Super Alloys / Titanium Alloys Chemicals Cast Iron Stainless Steel V Metal
9
Case for Vanadium - Uses
6/14/2016
Steel - Accounts for ~(85% - 90%)
• High strength low alloy steel (HSLA)
• High carbon steel alloys (HSS)
• Rebar and structured beams
• High speed tools and surgical instruments
Titanium Alloys (5-10%)
• Used in aerospace & aircraft industry -
• Also used in dental implants
Chemicals (1-3%)
• Catalysts for sulphuric acid and synthetic
rubber production
• Use in catalytic converters to remove sulfur
dioxide
• Vehicle catalyst alternative for platinum
and nickel
• Energy Storage
– Grid scale vanadium redox flow
batteries
– Applications in lithium-vanadium
based battery for electric vehicles
Source: Metal Bulletin, Roskill 2015 Report
Although vanadium market prices are the lowest they have been for years…
FeV price history
USD / kgV, March 1997- October 2015
… both supply and demand factors suggest a short to
medium term rebalancing
2
1 Supply
• Supply concentrated geographically, with ~85%
located in China, South Africa and Russia
• Supply will likely decrease due to exit of Chinese
vanadium slag producers
• Low probability of new entrants with production
costs low enough for profitable operations
Demand
• Over 90% of Vanadium demand is anchored in
steel
• Increasing vanadium intensity in steel in China and
other developing market supports demand growth
despite slowing steel demand
• Demand will diversify with increased use in utility
scale energy storage, offering a potential step
change in overall demand
Note: Price as at April 2016
Source: MetalB Bulletin, 2015, Roskill, TTP Squared
$ 0.00
$ 20.00
$ 40.00
$ 60.00
$ 80.00
$ 100.00
$ 120.00
$ 140.00
US
$/K
gV
Metal Bulletin FeV Daily Price Quote
Current FeV price*
US$16.50/kgV or
US$4.2/lb
Market at the bottom of its commodity cycle, making it an ideal investment opportunity
10
Case for vanadium: The story to now
6/14/2016
Source: Roskill, 2015; Bushveld analysis
of global
production -
mainly China &
Russia
64%
Ore
• High vanadium grade required – barrier of entry
• Lower capex than steel making
• Primary economics driver – vanadium
Vanadium raw material cost assumed zero –
accounted for in steel making
Large steel plant capex – barrier to entry
Primary economics driver – steel
Hot metal
Vanadium slag
Salt Roast
& Leach
BOF
Vanadium
recovery
Steel
Smelting
Magnetite
concentrate
Route B: Primary Vanadium production
Route A: Vanadium Co-production
Salt Roast
& Leach of global
production -
mainly South
Africa
24%
Case for vanadium: Supply considerations
NO SIGNIFICANT SUPPLY INCREASE IN SIGHT ….
6/14/2016 11
V-Slag
of global production
mainly China &
Russia
64%
salt roast
& leach
BOF Vanadium
recovery Smelting
Magnetite
concentrate
Three available options for uneconomic vanadium co-product steel plants
Resulting vanadium supply
reduction of
6/14/2016
Hot metal Steel
China
Brazil
Australia
India
CIS
1 High operating costs(~2x operating
costs compared with haematite
processing)
Complex steel plant design
Inferior Fe grade
Additional processing steps
2
Subdued steel market
Improved margins from
cheaper seabourne iron ore
not available
3 Global production of iron ore – US$/t
1
2
3
SWITCH Chengde Steel, substituting some of feedstock raw materials with
seaborne haematite, reducing V production
CURTAIL Panzhihua Steel – 2 blast furnace put on care & maintenance during
2015 & reducing V production by 15%
STOP Highveld Steel – stopping production May 2015, followed by
Vanchem
EXAMPLES
~ 15 – 20%
Case for vanadium: Supply considerations
VANADIUM CO-PRODUCTION SUPPLY FACING SIGNIFICANT CONSTRAINTS
12
Source: Roskill, 2015; TTP Squared Inc, 2014, Bushveld analysis
Market balance trajectory points to a sustained deficit
Price recovery expected in the short to medium term
>$6/lb V2O5 price required to stimulate new supply (Roskill, 2015)
13 6/14/2016
Case for vanadium: Market imbalance
THE DISAPPEARING SUPPLY IS MOSTLY FROM THE LOWER-END OF THE 1st QUARTILE OF THE CASH COST CURVE
Co-product slag
Primary ore
Secondary Potential Supply
reductions
Current FeV
price
(US$16.50/kgV
or US$4.2/lb))
Current oxide
price
(US$13.50/kgV or
US$3.44/lb))
Case for vanadium: Demand drivers
Source: TTP Squared; World Steel Association
STEEL PRODUCTION DRIVERS REMAIN ROBUST …
Regulation driven shift to higher strength
rebar driving up vanadium intensity of use in
China
• 2010 - Code for Design of Concrete Structures
(GBS0010-2010,
• 2011, Update Code for Construction Quality
Acceptance of Concrete Structures (GB50204 –
2002)
Urbanisation in emerging markets
• Large gap in urbanisation between emerging
markets (~40-47%) and developed markets ( ~80%)
• Strong correlation between urbanisation and
infrastructure build (thus steel consumption)
• Steel production expected to grow at a CAGR of 1%
through to 2025
14
2
1
• Vanadium intensity in steel in Chinese and other emerging markets lags
behind rest of the world, creating opportunity for higher vanadium demand
• China has already enacted regulation to shift to higher strength rebar,
driving up its vanadium intensity
0.096 0.084
0.06 0.056 0.05
0.03
0.00
0.02
0.04
0.06
0.08
0.10
0.12
North AmericaEurope CIS World Average China India
Vanadium intensity of use by region
kgV
/ton s
teel
% growth in Vanadium consumption in steel between 2006 –
2014, compared with 3.6% growth in steel production +8%
Vanadium intensity of steel will lead to vanadium demand growth of
~4%, which is faster than that for steel
Source: TTP2, MetalBulletin, 2015, World Steel Association, Company analysis
6/14/2016
Implies ~30,000
tons additional
demand *
* Based on 2012 Chinese Steel production
Growing momentum in energy storage
market globally – projected to grow to
>US$350 Bn by 2030
Utility scale energy storage
applications:
Driving grid efficiency – operational
and capital expenditure
o Peak shaving
o Regulating load frequency
o Balancing PV and wind
intermittency
o Reducing CAPEX for and
losses in transmission and
distribution
Driving grid independence
o Storing electricity from solar PV
for use night
o Lowering system costs for
micro grids and islands Source: BCG. CitiGroup, Press search
0
100
200
300
400
500
BCG, 2011 CitiGroup, 2015
2030 forecasts
Case for vanadium: Demand drivers
POTENTIAL DEMAND STEP-CHANGE FROM ENERGY STORAGE APPLICATIONS
6/14/2016
Flow battery developer to build 800 MWh battery
system in ...
UniEnergy Technologies and Rongke Power plan
to deploy one of the biggest energy storage facility,
an 800 MWh flow battery, in the Dalian peninsula in
...
www.utilitydive.com/news, 02/06/2016
STORAGE Is the New Solar: Will
Batteries and PV Create an
Unstoppable Hybrid Force
Greentechmedia.com, Jan ‘15
60MWh Redox Flow Battery Starts
Operations to Deal With ...
Hokkaido Electric Power Co Inc (HEPCO)
and Sumitomo Electric Industries (SEI) Ltd
announced Dec 25, 2015, that they have
completed a large-scale storage battery ...
05/01/2016
THE energy storage market is shifting to a
commercially viable market - 900 MW of projects are
expected to be installed in 2016, growing capacity
100%
iHS, 2016
There will be economic potential for
very large amounts (about 400 GW) of
storage in the EU
Commercialization of Energy in
Europe, EC report, March ‘13
US$ Bn
15
Case for vanadium: Demand drivers
a) Lifespan cycles - able to charge and
discharge repeatedly (>35,000 times)
giving it a long (>20 years) lifespan
b) Capacity for 100% discharge without
performance degradation is unique
c) Capacity to store large quantities of
energy and scalable up into the MW-
range
d) Very fast response time (<70ms)
e) Only one battery element - therefore no
cross-contamination – unique among flow
batteries
f) 100% of vanadium is reusable upon
decommissioning of the system
VANADIUM REDOX FLOW BATTERIES WELL PLACED FOR SIGNIFICANT ENERGY STORAGE MARKET SHARE
16 6/14/2016
VRFBs have several features that make them ideal for
utility scale, stationary energy storage applications:
Why Vanadium? Cont.
Source: Roskill, 2015; TTPSquared; Bushveld analysis
A structural market deficit suggests looming price correction
-21% -19% -19% -18% -18%
17 6/14/2016
Notes:
Market supply and demand volumes per Roskill 2015 reports, adjusted for subsequent supply reductions arising from
Highveld Business Rescue and subsequent liquidation underway, reductions in Chinese production from haematite
substitutions for some vanadium-bearing magnetite iron feedstock
Robust demand from steel
sector, and potential demand
upside from energy storage
applications
Constrained supply, with short
term supply reductions and
limited new supply additions
A potential structural market
deficit, which creates potential
for upward price correction
+
Introduction
Why Vanadium
Bushveld Minerals Vanadium Platform
The SMC/Vametco Transaction
18 6/14/2016
Bushveld Vanadium target structure
VANADIUM
19
World class primary vanadium reserves and resources with
easy access to existing infrastructure
Open cast deposits
Tier-1 vanadium grades (>2% V2O5 in magnetite)
The world’s largest high grade primary vanadium resource
base (>400 Mt JORC reserves and resources)
Salt-roast processing infrastructure with existing capacity
capable to meet 3% of global market
Targeting brownfields infrastructure significantly lowers
capex requirements and brings forward production
Targeting ~1,000MW of energy storage solutions using
Vanadium based flow battery systems
Captive market for BMN vanadium production
Major agreements already signed with key technology and
financing partners
Maximises the beneficiation dividend for Bushveld
DEVELOPING A VERTICALLY INTEGRATED AND LOW COST VANADIUM PLATFORM
MINING
PROCESSING
ENERGY
Mokopane
Vanadium
Project
Brits
Vanadium
Project
Vametco Bushveld Vanadium
SaltCo
Vametco
Mine
6/14/2016
BVR: project locations
20
Key
Vanadium-bearing
titaniferous magnetite
Mokopane Vanadium Project
Witbank
Middelburg
EASTERN LIMB
Thabazimbi
Rustenburg
Pretoria
Johannesburg
NORTHERN LIMB
Brits Vanadium Project
Vametco
WESTERN LIMB
• 298 MT JORC, outcropping reserve &
resource
• Vanadium in-magnetite grades of 1.75% V2O5
• Resource includes ~12.5Mt with average in-
magnetite grades >2.0% V2O5
• PFS completed Jan 2016
• Target production of 9,525 tpa V2O5
• Strike extension of the Vametco mine
• Outcropping zones identified
• Resource as yet unquantified
• Historical drilling showed in-magnetite
grades of as much as 2.6% V2O5
• 27 MT reserve average in-magnetite
grade of 2.55% V2O5 (JORC)
• 139 Mt Resource with average in-
magnetite grades of 2.1% V2O5
• Processing plant with 2 419 mtv
production capacity 6/14/2016
Mokopane Vanadium Project
• 298 Mt JORC resource, outcropping, defined on three adjacent and
parallel layers (MML; MML Hanging Wall & AB Zone)
• High in-magnetite V2O5 grade: MML: ~1.75% V2O5, AB-Zone: >2%
V2O5
• Long-term mine life: Ore Reserve of 28.56 million tonnes ("Mt")
supporting a minimum 30 year life of mine ("LoM")
• Low cost open-pit mining along strike envisaged
• Significant exploration upside - PFS uses <10% of the total project
resource of 298 Mt, which represents
• Established Salt Roast processing method lowers project risks:
• High-quality product: 99.5 weighted percent (wt%) purity
• Robust project economics:
‒ Payback period of 4years
‒ Pre-tax NPV of US$418.0 M (based on a 9% base case
discount rate)
‒ IRR of 24.8% (pre-tax)* Significant market share: RoM
production 9,525 tons per annum to contribute as much as 6
% of global annualised vanadium output
‒ First quartile opex of US$3.28/lb
21
MML Hanging Wall
MML AB Zone
*using a conservative long-term US$:ZAR12.75 exchange rate and a real vanadium price of US$7.50/lb (US$16.53/kg) for V2O5
flakes at >98 % purity 6/14/2016
Brits Vanadium Project
22
• Project comprises
prospecting rights to
several farms in Brits, North
West Province
– Uitvalgrond 431 JQ
(Portion 2);
Syferfontein 430 JQ;
Doornpoort 295 JR
and Uitvalgrond 431
JQ (Portion 3)
• The property Uitvalgrond
Portion 3 and Portion 2
contain the strike extension
of the Vametco mine
• Outcropping zones
identified
• Resource as yet
unquantified
• Historical drilling showed
in-magnetite grades of as
much as 2.6% V2O5
6/14/2016
Upper Zone
Main Zone
Main Zone
Upper ZoneUpper Zone
Main Zone
Main Zone
Upper Zone
Vametco Mine
Planned Borehole Positions on Uitvalgrond 431 (Portions 2 & 3)
Significant Progress in the last 12 months
2015 Started evaluating VRFB market opportunity
Jan 2016 Launch of Bushveld Energy
Feb 2016 Partnership with UET, now cooperating on
various potential projects
May 2016 Purchase Agreement for Vametco mine and
processing plant - creates path to vanadium
production and potential electrolyte
manufacturing
Jun 2016
Cooperation agreement with SA’s IDC – for
joint development and funding of the energy
storage market opportunities in Africa
Focus areas going forward:
• Deployment of VRFBs in selected locations
• Develop vanadium electrolyte manufacturing capacity
• Continue developing pipeline for large scale VRFB solutions in Africa
Bushveld Energy
23 6/14/2016
• Vision to be one of the largest electricity storage
providers in Africa by 2020, utilizing vanadium based
utility scale battery systems
• Ideally placed to address two key hurdles for VRFB
adoption:
• Security in the supply of vanadium - Bushveld
has large high grade vanadium resource
capable of supplying required vanadium
• Security of cost of vanadium - Bushveld
vanadium projects’ first quartile cash cost curve
position provides capacity to mitigate security of
cost risk
• Business model:
• Vertical integration with the upstream
vanadium mining & processsing to address
security of supply and cost
• Partnerships for technology, market access
and financing
• Targeting utility scale applications for critical mass
• Advisory and management team combine extensive
expertise and experience in energy market
Bushveld Energy
24 6/14/2016
BUSHVELD ENERGY – IDC COOPERATION
• IDC is South Africa’s national development
finance institution
• Wholly owned by South African government
• In last 4 years has approved > ZAR 14 billion
for renewable energy projects in SA
• to In 2015, approved ~ZAR 11.5 billion in
funding to companies across various sectors
• Partnership aligns Bushveld Energy with an
important stakeholder in SA energy landscape
• Partnership strengthens lobbying efforts in
respect of regulatory enablers for energy storage
in SA
• Assess VRFB viability and costs in South African
market, including
• studies of market potential in South Africa
and Africa,
• techno-economic studies for local
manufacturing of vanadium
electrolyte and VRFB systems in
South Africa
• Identify local and foreign partnershps in support of
roll-out and local manufacturing of VRFBs
• Establish test sites of up 1MW each in SA to
demonstrate performance and commercial value
of VRFBs
Cooperation Objectives
Success of the cooperation could open significant funding
opportunities for Bushveld Energy
Vametco
25
A LEADING VANADIUM BROWNFIELD ASSET LOCATED IN THE BUSHVELD COMPLEX
Located in Brits, 20km from Glencore’s Rhovan operations
Utilises Salt Roast processing method to produce
vanadium in the form of Nitrovan (exclusive trademark
owned by Vametco Alloys) and V2O3
In 2015 Vametco produced 2,419 tonnes of vanadium in
the form of Nitrovan and vanadium oxide
Scope to increase production to approximately 5,400 tons V
Ore feed sourced from captive mine with 26.8 Mt reserve
and 138.6 Mt resource
In-magnetite V grades of ~2% V2O5 among the highest in
the world
Adjacent to the Brits Vanadium project, acquired recently by
Bushveld
BEE compliant, with 25 % shareholding shared between
two BEE groups each with equity participation of local
communities
Established leadership team with extensive experience in
vanadium processing, having collectively worked on all
vanadium processing plants in South Africa
6/14/2016
Central to Bushveld’s vanadium processing strategy is the acquisition of Vametco Alloys, located on the Western Limb of the Bushveld Complex
Bushveld’s vanadium platform proposition
26
The right
commodity Low-cost curve
position
Scaleability Pragmatic
executable
path to
production
6/14/2016
• Proven Salt Roast process
• Well-developed infrastructure
• Acquisition of Vametco brings
forward production
• Deep local talent pools
• Robust economics – Vametco
operations profitable even at
current low commodity prices
• Demand anchored in steel
industry
• Potential step change from
energy storage application
• Concentrated and limited
growth profile
• Planned production and
current production profile
target approximately 10% of
resource
• Scope to scale up
deposits/resources and
production capacity at
Vametco
• Large open cast resource base
– combined >400 Mt (across
two deposits), including >60Mt
in reserves
• High primary vanadium grades
• V2O5 in magnetite grades
among the highest in the world
• 1st quartile cash cost
Bushveld Vanadium Strategy
27
Completion of PFS and BFS
1 • Anchor project for Bushveld Vanadium
• PFS completed Jan 2016
• BFS commencing 2016, funded through strategic partner
Options for early cash-flow
2 • Acquire brownfield processing plant(s)
• SPA signed for acquisition of Vametco vanadium mine and processing
plant
Vanadium demand support
3
• Actively participate in development of viable additional vanadium markets
• Bushveld Energy Ltd, launched Jan 2016
• Strategic partnerships with VRFB technology partner, Feb 2016
• Cooperation agreement with IDC, June 2016
Consolidation 4
• Identify and secure high grade primary vanadium opportunities
• Develop quality deposits into world-class mines
• Brits Vanadium Project acquisition completion
6/14/2016
Introduction
Why Vanadium
Bushveld Minerals Vanadium Platform
The SMC/ Vametco Transaction
28 6/14/2016
Vametco
29
A LEADING VANADIUM BROWNFIELD ASSET LOCATED IN THE BUSHVELD COMPLEX
Acquisition of Vametco’s operating
mine and plant provides low cost
near route to production
Acquisition price: US$17.2 million
What Bushveld is acquiring: Evraz
Group’s :
a) 78.8% economic interest in
Strategic Minerals Corporation,
which owns Vametco
b) Marketing rights to ~80%
Vametco production
c) A 78.8% share in a preference
share held by SMC in Vametco
Holdings
6/14/2016
Central to Bushveld’s vanadium processing strategy is the acquisition of Vametco Alloys, located on the Eastern Limb of the Bushveld Complex
Acquisition in 3 stages:
a) Tranche 1 – 23% economic interest in SMC for US$4,682,073 payable by 17 June 2016 as
follows:
‒ A US$500,000 upon execution of Exclusivity Agreement and agreeing purchase terms
(Bushveld has already paid the US$500,000)
‒ US$500,000 by 13 May 2015 pursuant to signing of the Share Purchase Agreement (Bushveld
has already paid the US$500,000)
‒ US$3.7million by 17 June 2016
b) Tranche 2 – 55.8% economic interest in SMC for a cash consideration of US$12,524,836,
conditional inter alia on
‒ Regulatory approvals
‒ BVL acceding to a shareholder agreement with the co-investor in relation to the class B shares;
‒ Bushveld shareholder approval, if necessary;
‒ Waiver or lapse of SMC's and the co-investor's pre-emption rights to acquire Evraz's Tranche 2
interests;
The long stop date for completion of Tranche 2 is 12 months from completion of Tranche 1 (with the
ability to extend with consent for a further six months).
c) Earn out: A potential annual earn out payment following completion of Tranche 2, based upon the
vanadium price breaching an agreed minimum threshold price, is payable between 2018 and 2025 up to
an annual maximum amount of US$1,500,000 and a cumulative maximum amount of US$5,000,000, in
2016 money terms.
Vametco
30
A LEADING VANADIUM BROWNFIELD ASSET LOCATED IN THE BUSHVELD COMPLEX
6/14/2016
BEE partner 2
SMC
BEE partner 1
Vametco Holdings
Pty Ltd
EVRAZ Group SOJITZ Corp.
10% 15%1 75%1
78.8%2 21.2%2
• SMC is a holding company for a group of companies (the
"Group") which owns the producing Vametco vanadium
mine and plant in South Africa ("Vametco Alloys”)
• SMC capital structure gives Evraz 78.8% economic
interest and 75% voting rights
• SMC owns:
- 75%1 ordinary shareholding in Vametco Holdings
- A preference shares in Vametco Holdings, valued
as at 31 December 2015 at ZAR357 million
• Vametco Holdings holds the new order mining rights for
Vametco, over the properties Uitvalgrond 431 JQ (Portion
1) and Krokodilwal 426 JQ (Portion 1)
• Sojitz Corporation, is a Japanese conglomerate whose
business interests include a global commodities trading
business
SMC Structure
1 SMC’s share is currently 75% and this will decrease to 74% in 2016, with BEE partner 1 increasing its stake from 15% to 16%. This brings the BEE share of Vametco to 26% and in compliance with SA mining
regulations
2 Economic interest in SMC
Vametco Alloys Pty
Ltd
Acquisition
target
100%
31 6/14/2016
Financing – Yellow Dragon
32 6/14/2016
Yellow Dragon
Holdings Limited BMN
Bushveld Vametco
55% 45%
Acquisition contributions
• Phase 1 - US$2.860 m
• Phase 2 – US$6.875m
• Total = US$9.735m
SMC
78.8%
Acquisition contributions
• Phase 1 - US$2.340 m
• Phase 2 – US$5.625m
• Total = US$7.965m
Of this amount,
Bushveld has
already
contributed
US$1 million
• Yellow Dragon and Bushveld
Minerals have agreed terms
for a strategic investment by
Yellow Dragon in Bushveld
Vametco. Transaction has 2
parts:
a) Subscription by Yellow
Dragon for 50 million
Bushveld Minerals shares
prior to share suspension
lifting
b) Subscription for 55% of
Bushveld Vametco Limited
in return for funding 55% of
the purchase consideration
requirement for SMC
(US$2.860m for Phase
1)
• Yellow Dragon is an
investment holding company
for a syndication of high net
worth investors, set up for
the purpose of the
transaction
Acquisition consideration & phases
33
Party Interest
acquired
Bushveld Minerals
contribution
US$
Yellow Dragon
contribution
US$
Total
US$
45% 55% 100%
Phase 1 23% Total phase 1 consideration of US$4,682,03 plus transaction expense of US$500,000
Paid to date 1,000,000 1,000,000
To completion of Phase 1 1,331,933 2,850,140 4,182,073
Total Phase 1 contributions 2,331,933 2,850,140 5,182,073
Phase 2 55.8% Total phase 2 consideration of US$ 12,524,836
Phase 2 contributions* 5,636,176 6,888,660 12,524,836
Total 78.8% 7,968,109 9,738,800 17,706,909
6/14/2016
* To be funded through debt and equity
1) Accelerated path to production
• The acquisition accelerates Bushveld’s path to production by several years;
• Earliest production start date of 2020 anticipated for greenfield Mokopane Vanadium Project
• Earlier production means earlier scope for dividends
2) Quality Asset
• Vametco Alloys is a high quality, low cost producer with a trademark vanadium product and a global vanadium customer base;
• In magnatite-ore vanadium grades are among the highest in the world
• At US$3.57/lb V2O5 equivalent, it is one of the lowest cost producers
3) Achievable transaction structure
• The acquisition consideration is substantially less than the cost of a greenfield mine and plant of the same capacity; Replacement
value of plant and mine estimated at more than 10 times the acquisition consideration
• Staggered transaction structure means transaction can be completed in manageable bite-sizes for Bushveld Minerals
4) Strategic alignment
• It is aligned with the Company’s aspiration to develop a virtically integrated vanadium platform
• It has synergy with the Company’s interests in the global energy storage space by providing capacity for potential electrolyte
manufacturing.
5) Vanadium market at a tipping point
• Acquisition occurring at a time of significant correction in vanadium pricing >40% price improvement since December 2015
Investment Proposition (1/2)
34 6/14/2016
Investment Proposition (2/2)
35
Vanadium market on the verge of a breakout …
6/14/2016
Source: TTP Squared
Thank You
Contacts and conclusion
37
South Africa Guernsey
Fortune Mojapelo
Chief Executive Officer
Tel +27 11 268 6555 Tel: +44 (0)1481 722 584
Fax: +27 11 268 5170 Fax: +27 11 268 5170
Email: [email protected]
Twitter @BushveldMin_Ltd
2nd Floor, Building 3
Illovo Edge Office Park
Cnr Harries & Fricker Road,
Illovo,
Johannesburg, 2116
South Africa
18-20 Le Pollet
St Peter Port
Guernsey
GY1 1WH
Investor Relations Contacts
Tavistock Communications
Jos Simson/Nualla Gallagher
Tel +44 (0) 207 920 3150
Mobile +44 (0) 7899 870 45/+44 (0) 7715 164 296
6/14/2016