TIDMBMN
RNS Number : 4146S
Bushveld Minerals Limited
06 November 2023
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
6 November 2023
Bushveld Minerals Limited
("Bushveld Minerals", "Bushveld" or the "Company")
Q3 2023 and 9M 2023 Operational Update
Bushveld Minerals Limited (AIM: BMN), the integrated primary
vanadium producer and energy storage solutions provider, is pleased
to announce its operational update for the 3 months and 9 months
ending 30 September 2023.
Group highlights
Q3 2023
-- Production of 1,000 mtV (Q2 2023: 840 mtV) (Q3 2022: 1,016
mtV).
-- Weighted average production cash cost(1) (C1) of US$26.5 /kgV
(Q2 2023: US$27.4/kgV) (Q3 2022: US$29.3/kgV).
-- Sales of 849 mtV (Q2 2023: 1,068 mtV) (Q3 2022: 1,034
mtV).
9M 2023
-- Production of 2,784 mtV (9M 2022: 2,657 mtV).
-- Weighted average production cash cost(1) (C1) of US$26.4 /kgV
(9M 2022: US$28.9/kgV).
-- Sales of 2,945 mtV (9M 2022: 2,678 mtV).
-- Total Recordable Injury Frequency Rate ("TRIFR") of 5.69 (9M
2022:10.25).
1. Weighted average production cash cost (C1) is the blended
weighted average production cash cost (C1) of Vametco and Vanchem,
divided by group production.
2023 Group guidance
-- On track to meet Group production guidance for 2023 of
between 3,700 mtV and 3,900 mtV.
- Vametco production expected to be c.200 mtV per month for the remainder of the year.
- Vanchem production expected to c.150 mtV in November and c.180 mtV in December.
-- October 2023 Group production of 387 mtV (Vametco: 209 mtV)
(Vanchem: 178 mtV).
-- On track to meet Group weighted average production cash cost
(C1) guidance of between US$26.6/kgV and US$26.9/kgV, (ZAR481/kgV
and ZAR487/kgV).
Corporate update
-- On 11 September 2023, the Company announced a Binding Term
Sheet with Southern Point Resources for a cumulative proposed
investment of between US$69.5 - US$77.5 million. Bushveld has since
received the ZAR150 million (US$8.1 million) interim working
capital funds as part of the transaction. The Company is in process
of completing the other aspects of the overall transaction.
-- The Company is progressing the various workstreams to
complete the Orion convertible loan note restructuring before the
21 December 2023 due date.
-- Post period end, the Company announced the agreement to
acquire the 26% minority interest in Bushveld Vametco Holdings, the
transaction is value accretive to shareholders.
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
"I am pleased to report the first set of quarterly production
numbers under my stewardship. They are a solid set of results for
the quarter ending 30 September 2023. What is immediately clear
from the highlighted numbers is a strong improvement in production
of 19% from Q2 2023, which has translated into some solid
improvements on the cost front. This gives us confidence that we
have made the right decisions, especially at Vanchem, with the
implementation of the various initiatives, and the goal now is to
ensure that things stabilise and even improve further from
here.
We have made progress both in respect of the Southern Point
transaction and the refinancing of the Orion convertible loan note.
Completion of these transactions will steady the ship and ensure
Bushveld is a sustainable business for the long term."
Conference call
Bushveld Minerals Chief Executive Officer, Craig Coltman and
Finance Director, Tanya Chikanza, will host a conference call at
2:30 pm UK time (4:30 pm SAST) today to discuss the quarterly
update with analysts and investors. Participants may join the call
by dialling:
Tel: United Kingdom: +44 (0) 330 551 0200; South Africa: Toll
Free: 0 800 980 512, USA Local: +1 786 697 3501
Password: Quote Bushveld Minerals when prompted by the
operator.
A replay of the conference call will be available on the
Company's website post the call.
BUSHVELD VANADIUM
9M 2023 Q3 2023 Q3 2023
Group(1) Unit Q3 9M 2023 vs vs vs
2023 9M 2022 Q3 2022 Q2 2023
1 9.0
Production mtV(2) 1,000 2,784 4.8% - 1.6% %
--------- ------- ---------- --------- --------- ---------
Weighted average
production cash
cost1 (C1) US$/KgV 26.5 26.44 -8.5% -9.6% -3.3%
--------- ------- ---------- --------- --------- ---------
Sales(3) mtV(2) 849 2,945 10.0% -17.9% -20.5%
--------- ------- ---------- --------- --------- ---------
1. Based on provisional, unaudited figures.
2. mtV = metric tonnes of vanadium.
3. Reported as final sales to customers.
VAMETCO
Operational highlights for Vametco (on a 100% basis)(1)
9M 2023 Q3 2023 Q3 2023
vs vs vs
Description Unit Q3 2023 9M 2023 9M 2022 Q 3 2022 Q2 2023
1 074
Ore mined Tonnes 368 556 113 -8.6% -14.4% -0.2%
-------- -------- ------- -------- --------- --------
Total mined (ore 2 778
+ waste) Tonnes 723 316 173 -7.4% -45.5% -4.6%
-------- -------- ------- -------- --------- --------
Ore grade (in % V(2)
Whole Rock) O(5) 0.68 0.70 -18.6% -29.2% -2.9%
-------- -------- ------- -------- --------- --------
82 18
Concentrate produced Tonnes 2 266 440 -8.4% -22.5% -18.7%
-------- -------- ------- -------- --------- --------
Concentrate grade % V 1.05 1.05 1.0% 1.9% 0%
-------- -------- ------- -------- --------- --------
Recovery from
Kiln to MVO % 63.3 66.7 -8.5% -10.0% 0.5%
-------- -------- ------- -------- --------- --------
Production (Nitro
Vanadium) mtV(2) 545 1 712 -9.5% -18.2% 12.4%
-------- -------- ------- -------- --------- --------
Production cash
cost (C1) (3) ZAR/KgV 494.6 464.1 17.4% 8.1% -3.7%
-------- -------- ------- -------- --------- --------
Production cash
cost (C1) (3) US$/KgV 26.5 25.3 2.0% -1.5% -3.6%
-------- -------- ------- -------- --------- --------
Foreign exchange
rate ZAR: USD 18.7 18.4 15.7% 10.0% 0.0%
-------- -------- ------- -------- --------- --------
1. Based on provisional, unaudited figures. Bushveld's net
attributable interest of the above figures is approximately 74%.
Production cash cost is based on vanadium produced.
2. mtV = metric tonnes of vanadium.
3. Excludes depreciation, royalties and selling, general &
administrative expenses. Production cash cost is based on vanadium
produced. Production cash cost (C1) measure does not have any
standardized meaning prescribed by IFRS and differs from measures
determined in accordance with IFRS. This measure is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. This measure is not necessarily indicative
of net earnings or cash flow from operating activities as
determined under IFRS.
Production
-- Q3 2023 production of 545 mtV (Q2 2023: 485 mtV), (Q3 2022:
666 mtV), impacted by constraints at the barren dam and Sulphate
Recovery Plant (SRP) and reliability challenges at the leach
plant.
- 136 mtV, 215 mtV and 194mtV produced in July, August and September 2023 respectively.
-- The challenges experienced at the leach plant have been
resolved and production is back to normal.
-- The work on the SRP/barren dam is progressing to plan and
performance is showing improvement. This section is currently not a
bottleneck in achieving around 200mtv, however, it is very
sensitive on the impact of heavy rainfall.
-- 9M 2023 production of 1,712 mtV (9M 2022: 1,892 mtV), with
production impacted by the aforementioned reasons.
-- The previously announced 10-days planned maintenance shutdown
was completed during Q3 2023, and no further planned shutdowns are
expected for the rest of the year.
Costs
-- Q3 2023 production cash cost (C1) of US$ 26.5/ kgV (Q2 2023:
US$27.5/kgV), (Q3 2022: US$26.9/kgV), supported by higher
production volumes in Q3 2023 compared to Q2 2023 and to a weaker
ZAR:USD exchange rate in Q3 2023 compared to Q3 2022.
-- 9M 2023 production cash cost (C1) of US$ 25.3 /kgV (9M 2022:
US$24.8/kgV), mainly due to lower production volumes and partially
offset by a weaker ZAR:USD exchange rate.
Guidance
-- Guidance range remains unchanged of between 2,300 mtV and
2,400 mtV.
-- Production cash cost (C1) guidance has been maintained of
between US$25.6/kgV and US$25.9/kgV (ZAR463/kgV and
ZAR469/kgV).
VANCHEM
Operational highlights for Vanchem(1)
9M2023 Q3 2023 Q3 2023
vs vs vs
Description Unit Q3 2023 9M 2023 9M 2022 Q3 2022 Q2 2023
Ore Milled Tonnes 82 403 227 125 34.5% 19.0% 33.1%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Ore Grade (in % V(2)
Whole Rock) O(5) 1.32 1.37 3.0% -6.4% -4.3%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Milled ore to
Kiln Tonnes 58 166 170 838 37.7% 13.8% 21.6%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Milled Ore Grade % V 0.99 0.97 3.2% 6.5% 3.1%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Recovery: Kiln
to Final Product % 65.1 60.6 -1.7% -6.9% 1.6%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Chemicals mtV(2) 90 157 14.6% 246.2% 104.5%
--------- ------------------ ----------------- --------- --------- ---------
Flake mtV (2) 66 203 167.1% -4.3% -45.5%
--------- ------------------ ----------------- --------- --------- ---------
FeV mtV (2) 299 713 29.2% 17.3% 57.4%
--------- ------------------ ----------------- --------- --------- ---------
Total production mtV (2) 455 1072 40.1% 30.0% 28.2%
--------- ------------------ ----------------- --------- --------- ---------
Production
cash cost (C1)(3) ZAR/kgV 492.4 519.4 -16.7% -14.4% -2.9%
--------- ------------------ ----------------- --------- --------- ---------
Production
cash cost (C1)(3) US$/kgV 26.4 28.3 -27.6% -21.9% -2.9%
--------- ------------------ ----------------- --------- --------- ---------
ZAR:
Foreign exchange USD 18.7 18.4 15.7% 10.0% 0.0%
--------- ------------------ ----------------- --------- --------- ---------
1. Based on provisional, unaudited figures.
2. mtV = metric tonnes of vanadium.
3. Excludes depreciation, royalties and selling, general &
administrative expenses. Production cash cost is based on vanadium
produced. Production cash cost (C1) measure does not have any
standardized meaning prescribed by IFRS and differs from measures
determined in accordance with IFRS. This measure is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. This measure is not necessarily indicative
of net earnings or cash flow from operating activities as
determined under IFRS.
Production
-- Q3 2023 production of 455 mtV (Q2 2023: 355 mtV), (Q3 2022:
350 mtV). Production increase supported by improved operational
performance underpinned by the Vanchem turn around project, partly
offset by unplanned stoppages.
- 160 mtV, 175mtV and 120 mtV produced in July, August and September 2023 respectively.
-- September 2023 production was 120 mtV, due to a 9 day
shutdown to repair the refractory. The shutdown was successful and
at the back of this Vanchem will not require to conduct the
previously announced 25-day maintenance in Q4 2023.
-- 9M 2023 production of 1,072 mtV (9M 2022: 765 mtV),
underpinned by improved operational performance.
Costs
-- Q3 2023 production cash cost (C1) of US$ 26.4 /kgV (Q2 2023:
US$27.2/kgV) (Q3 2022: US$33.8/kgV), supported by higher production
volumes in Q3 2023 compared to Q2 2023, a weaker ZAR:USD exchange
rate and higher production volumes in Q3 2023 compared to Q3
2022.
-- 9M 2023 production cash cost (C1) of 28.3/kgV (9M 2022:
US$39.1/kgV) supported by a weaker ZAR:USD exchange rate and higher
production volumes.
Guidance
-- Production guidance range has been maintained at between
1,400 mtV and 1,500 mtV.
-- The planned 25-day maintenance for the year is no longer
required by virtue of a 9 and 4 day shutdown in September and
November respectively.
- 178 mtV produced in October 2023. Production is expected to be
around 150 mtV in November (due to the 4 day shutdown) and 180 mtV
in December.
-- Production cash cost (C1) guidance range has been maintained
to between US$28.1/kgV and US$28.5/kgV (ZAR509/kgV and
ZAR516kgV).
BELCO
The hot commissioning phase was completed in July and
construction completed in August. An initial batch of electrolyte
was produced to fulfil a small order and produce samples. These
samples are now being distributed among international customers in
an effort to qualify BELCO and its electrolyte with battery
companies. This qualification step is essential prior to issuance
of orders. It is expected to take a few months.
VAMETCO HYBRID MINI-GRID
The construction of the 3.5 MW solar PV plant was completed
during the period. The plant was first energised at the end of
September. The plant and all its components are now undergoing site
acceptance and grid compliance testing. The plant will generate
approximately 10% of Vametco's electricity requirements.
HEALTHY AND SAFETY
Q3 2023 TRIFR of 4.94 (Q3 2023: 12.01), 9M 2023 TRIFR at 5.69
(9M 2022: 10.25) , supported by improved reporting of leading
indicators analysed for learning and improvement opportunities.
VANADIUM MARKET
-- Q3 2023 sales of 849 mtV (Q2 2023: 1,068 mtV), below previous
quarter due to inventory in the logistics pipeline at quarter
end.
-- Sales into the higher value markets (aerospace application,
speciality alloy and chemicals) and higher price markets (Nitro
Vanadium in North America) continue to be prioritised.
-- Demand for our entire range of products remains strong and we
expect sales volume to be in line with production volumes for the
rest of 2023.
-- Q3 2023: CRU Ryan's Notes Ferrovanadium prices averaged
US$36.0/kgV. London Metal Bulletin and Asian Metals averaged
US$31.5/kgV and US$31.0/kgV respectively.
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Craig Coltman, Chief Executive
Officer
Chika Edeh, Head of Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jamil Miah / Sahil Suleman
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ +44 (0) 207 920
James Whitaker 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, vertically integrated primary
vanadium producer, it is one of only three operating primary
vanadium producers. In 2022, the Company produced more than 3,800
mtV, representing approximately three per cent of the global
vanadium market. With a diversified vanadium product portfolio
serving the needs of the steel, energy and chemical sectors, the
Company participates in the entire vanadium value chain through its
two main pillars: Bushveld Vanadium, which mines and processes
vanadium ore; and Bushveld Energy, an energy storage solutions
provider.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through the
advancement of vanadium-based energy storage systems, specifically
Vanadium Redox Flow Batteries ("VRFBs").
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com
About Vametco
Vametco is located near Brits on the Western Limb of the
Bushveld Complex. The integrated operation comprises a vanadium ore
mine and a processing plant that produces mostly Nitro Vanadium.
The mine lies adjacent to the Brits Vanadium Project, which will in
future serve as an alternative source of near surface run of mine
("ROM") ore feed to the Vametco plant.
The Vametco mining operation uses open pit bench mining methods
to mine a well-defined orebody. The deposit is continuous with
limited faulting and dips in a northerly direction at approximately
19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing
circuit, followed by milling and magnetic separation to produce
magnetite concentrates. The magnetite concentrate is fed into the
extraction process which consists of a rotary kiln for roasting
followed by leaching and precipitation. Thereafter the precipitated
vanadium as ammonium metavanadate is converted to modified vanadium
oxide ("MVO") in a rotary calciner. MVO is fed into the mix plant
and finally into the shaft furnaces to produce Nitro Vanadium.
About Vanchem
Vanchem is situated at Ferrobank Industrial Park in Emalahleni
Local Municipality, Mpumalanga Province in the Republic of South
Africa. Vanchem is a primary vanadium producing facility with a
beneficiation plant capable of producing various vanadium oxides,
ferrovanadium and vanadium chemicals. Vanchem uses the salt roast
beneficiation process, similar to the one used at Vametco. The
plant comprises: a core salt-roast processing plant, including 3
roasting kilns, an electric smelting ferrovanadium converter, an
alumino-thermic smelting facility, also located at Highveld, a
vanadium chemical plant; and a rail siding linking the plant with
Bushveld deposits and additional potential supply sources through
the national rail network.
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