Business Rescue Talks Initiated by Bushveld as Challenges Mount

Highlights:

• Bushveld Minerals enters business rescue proceedings after financial uncertainty and unsuccessful refinancing discussions.

• The company requests suspension of shares on the AIM market due to its inability to cover immediate liabilities.

• Sale of Vanchem facilities to Southern Point Resources and disposal of Lemur Holdings shares are part of the company’s efforts to reduce financial pressure.

Bushveld Minerals (LSE:BMN) has announced it has entered business rescue proceedings due to severe financial challenges. The UK-listed vanadium mining company confirmed that it requested a suspension of its shares on the AIM market of the London Stock Exchange, citing ongoing financial uncertainty. The company also revealed that discussions with various stakeholders regarding refinancing had been unsuccessful, leaving it without sufficient funds to cover its immediate liabilities.

In an update for the third quarter, CEO Craig Coltman acknowledged the dire financial situation, stating that Bushveld Minerals was unable to meet its short-term obligations. As a result, the company has engaged a turnaround specialist to assess its recovery prospects and explore options for achieving the best possible outcome for its stakeholders.

While the company faces significant financial strain, there was a glimmer of hope in Coltman’s comments regarding the vanadium market. He noted that vanadium prices had begun to improve for the first time since his appointment as CEO in July 2023. However, he emphasized that further details could not be disclosed due to stock exchange regulations.

In response to its financial pressures, Bushveld Minerals has taken steps to raise capital. The company agreed to the sale of its Vanchem facilities to Southern Point Resources (SPR), a privately held entity and 15% shareholder in Bushveld. This transaction included an initial $3.5 million capital payment, with additional quarterly payments of $1.25 million over the next three years. In addition, Bushveld divested its shares in Lemur Holdings, a move that alleviates the company from the burden of $2.5 million in debt owed to the Development Bank of South Africa.

These actions reflect Bushveld Minerals’ efforts to stabilize its finances and explore a path to recovery while navigating challenging market conditions.