Shares in Bushveld Minerals saw a significant boost, rising by as much as 21%, following the announcement that investment fund Southern Point Resources will be investing up to $77.5 million in the company.
As of 07:23 GMT, the shares had already increased by 0.23 pence, reaching 2.25 pence.
The South Africa-focused vanadium miner revealed on Monday that both parties have agreed to a binding term sheet, outlining a cumulative investment range of $69.5 million to $77.5 million.
As part of the agreement, Bushveld will receive a working capital facility of 150 million South African rand ($7.8 million) to support the expansion of production at its Vanchem vanadium processing plant.
Furthermore, Southern Point Resources will purchase a 50% stake in Bushveld’s subsidiary that owns Vanchem, as well as its 64% equity interest in the subsidiary that owns the Mokopane project, for approximately $25 million.
While Southern Point Resources plans to invest up to $12.5 million in Bushveld’s equity, it will not exceed the subscription of 29.9% of shares, according to Bushveld.
The remaining investment is related to a three-year marketing and sales appointment of SPR, along with a potential future investment into Vanchem by SPR.