REG - Bushveld Minerals Ld - Full year 2023 Operational Update
05/02/2024 07:15
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RNS Number : 0045C Bushveld Minerals Limited 05 February 2024
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.
5 February 2024
Bushveld Minerals Limited
("Bushveld Minerals", "Bushveld" or the "Company")
Full year 2023 Operational Update
Bushveld Minerals Limited (AIM: BMN), the primary vanadium producer, is
pleased to announce its operational update for the 3 months and 12 months
ending 31 December 2023.
Group highlights
Q4 2023
§ Q4 2023 production of 925 mtV (Q3 2023: 1,000 mtV).
§ Q4 2023 weighted average production cash cost(1) (C1) of US$27.3/kgV (Q3
2023: US$26.5).
§ Q4 2023 sales of 1,106 mtV (Q3 2023: 849 mtV).
12M 2023
§ 12M 2023 production of 3,714 mtV (12M 2022: 3,842 mtV), in line with
guidance.
§ 12M 2023 weighted average production cash cost(1) (C1) of US$26.6/kgV (12M
2022: US$27.7/kgV).
§ 12M 2023 sales of 4,051 mtV (12M 2022: 3,584 mtV), owing to increased sales
out of inventory.
§ 12M 2023 Total Recordable Injury Frequency Rate ("TRIFR") of 2.31 (12M
2022:10.32).
1. Weighted average production cash cost (C1) is the blended weighted
average production cash cost (C1) of Vametco and Vanchem, divided by group
production.
2024 Group guidance and operational update
§ Group guidance has been suspended pending receipt of funds from Southern
Point Resources. Due to the continuing default of Southern Point Resources
("SPR") in respect as part of the equity raise, the Company has had to suspend
critical suppliers' payments and postpone some maintenance projects. The
Company intends to provide an update on 2024 guidance in the Q1 2024
operational update.
§ January 2024 Group production of 267 mtV affected by the Company's current
constrained cash position.
§ Annual scheduled maintenance to occur in Q1 and Q3 2024 for Vametco and Q2
2024 for Vanchem.
Post period highlights
§ On 1 February 2024, the Company announced that it had completed the
refinancing of the unsecured convertible loan note issued to OMF Fund III (F)
Ltd. ("Orion") for a total debt obligation of US$47.1 million (including
accrued interest).
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
"I am pleased that we have met 2023 production guidance and I would like to
commend our workforce for achieving the level of operational performance in H2
2023 given cash flow challenges faced. We are pleased to have announced the
completion of the Orion convertible debt restructuring announced on 1st
February 2024 and had hoped to have put our financial difficulties behind us,
and so it is therefore disappointing that we have to suspend 2024 production
guidance given the funding shortfall reported in recent announcements. Once
the additional funding is received, we hope to stabilise production at both
assets and achieve a more consistent performance."
Conference call
Bushveld Minerals Chief Executive Officer, Craig Coltman, will host a
conference call at 1:00 pm UK time (3:00 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.
Investor session
Bushveld Minerals Chief Executive Officer, Craig Coltman will host an
investor session on 8 February 2024 at 1:00 pm UK time (3:00 pm SAST) via
the Investor Meet Company platform to discuss the operational update.
The session is open to all existing and potential shareholders. Investors can
submit questions via Investor Meet Company dashboard up until 9:00am the
day before the meeting.
Investors can sign up to Investor Meet Company for free and register for the
event via:
https://www.investormeetcompany.com/bushveld-minerals-limited/register-investor
(https://www.investormeetcompany.com/bushveld-minerals-limited/register-investor)
Investors who already follow Bushveld Minerals on the Investor Meet
Company platform will automatically be invited.
BUSHVELD VANADIUM
12M 2023 vs Q4 2023 vs Q4 2023 vs
Group(1) Unit Q4 2023 12M 2023 12M 2022 Q4 2022 Q3 2023
Production mtV(2) 925 3,714 -3.3% -21.9% -7.5%
Weighted average production cash cost1 (C1) US$/KgV 27.3 26.6 -3.9% 9.1% 3.3%
Sales(3) mtV(2) 1,106 4,051 13.0% 22.2% 30.2%
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)
Description Unit Q4 2023 12M 2023 12M 2023 vs Q4 2023 vs Q4 2023 vs
12M 2022 Q4 2022 Q3 2023
Ore mined Tonnes 99,463 1,061,947 -26.6% -76.6% -73.0%
Total mined (ore + waste) Tonnes 223,503 2,317,537 -30.0% -82.7% -69.1%
Ore grade (in Whole Rock) % V(2)O(5) 0.73 0.68 -21.8% -16.1% 7.4%
Concentrate produced Tonnes 93,466 359,905 -7.8% -6.2% 13.7%
Concentrate grade % V 1.06 1.05 2.0% 5.6% 1.0%
Recovery from Kiln to MVO % 68.0 67.0 -7.4% -3.8% 7.4%
Production (Nitro Vanadium) mtV(2) 589 2,306 -14.8% -27.5% 8.1%
Production cash cost (C1)(3) ZAR/KgV 495.1 471.1 21.3% 33.0% 0.1%
Production cash cost (C1)(3) US$/KgV 26.4 25.5 7.5% 24.9% -0.4%
Foreign exchange rate ZAR: USD 18.75 18.46 12.9% 6.4% 0.5%
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
§ Q4 2023 production of 589 mtV (Q4 2022: 812 mtV, Q3 2023: 545 mtV),
impacted by constraints at the barren dam and Sulphate Recovery Plant (SRP),
reliability challenges at the leach plant and cashflow shortfalls.
§ 12M 2023 production of 2,306 mtV (12M 2022: 2,705 mtV), with production
impacted by the aforementioned reasons.
Costs
§ Q4 2023 production cash cost (C1) of US$26.4/kgV (Q4 2022: US$21.1/kgV, Q3
2023: US$26.5/kgV), impacted by low production volumes during Q4 2023 partly
offset by a weaker ZAR:USD exchange rate in Q4 2023 compared to Q4 2022 and Q3
2023.
§ 12M 2023 production cash cost (C1) of US$25.5/kgV (12M 2022: US$23.7/kgV),
due to lower production volumes.
2024 Operational Update
§ 142 mtV produced in January, due to an ongoing 25 day Kiln maintenance
shutdown.
- The kiln is expected to be back online in mid-February.
§ A further 10-days maintenance shutdown is expected in Q3 2024.
VANCHEM
Operational highlights for Vanchem(1)
Description Unit Q4 2023 12M 2023 12M2023 vs Q4 2023 vs Q4 2023 vs
12M 2022 Q4 2022 Q3 2023
Ore Milled Tonnes 80,663 307,788 18.6% -11.0% -2.1%
Ore Grade (in Whole Rock) % V(2)O(5) 1.55 1.52 2.0% 2.0% 1.0%
Milled ore to Kiln Tonnes 63,547 234,385 26.1% 2.8% 9.3%
Milled Ore Grade % V 0.97 0.97 2.1% 0.8% -1.9%
Recovery: Kiln to Final Product % 69.3 68.3 3.0% 12.4% 7.0%
Chemicals mtV(2) 38 195 1.1% -31.5% -57.9%
Flake mtV(2) 213 416 44.5% 0.7% 222.4%
FeV mtV(2) 86 798 21.5% -18.7% -71.4%
Total production mtV(2) 336 1,408 23.9% -9.6% -26.1%
Production cash cost (C1)(3) ZAR/kgV 502.4 515.1 -15.3% -15.2% 2.0%
Production cash cost (C1)(3) US$/kgV 26.8 27.9 -24.9% -20.3% 1.5%
Foreign exchange ZAR: USD 18.8 18.5 12.9% 6.4% 0.5%
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
§ Q4 2023 production of 336 mtV (Q4 2022: 372 mtV, Q3 2023: 455), due to
unplanned stoppages as a result of repeated refractory failures during the
quarter. Accordingly, a decision was taken to bring forward part of the 2024
kiln reline maintenance programme shutdown to December 2023. In addition,
cashflow challenges negatively impacted production.
§ 12M 2023 production of 1,408 mtV (12M 2022: 1,137 mtV), although production
was impacted by the reason mentioned above, overall, the production increase
was underpinned by the Vanchem turn around project implemented in H2 2023.
- Highest yearly production since the asset was acquired by Bushveld.
Costs
§ Q4 2023 production cash cost (C1) of US$26.8/kgV (Q4 2022: US$33.6/kgV, Q3
2023: US$26.4/kgV), supported by a weaker ZAR:USD exchange rate in Q4 2023
compared to Q4 2022 and Q3 2023, partially offset by a lower production
volumes during Q4 2023.
§ 12M 2023 production cash cost (C1) of $27.9/kgV (12M 2022: US$37.2/kgV)
supported by higher production volumes and a weaker ZAR:USD exchange rate
compared to 12M 2022.
2024 Operational Update
§ 125 mtV produced in January due to working capital constraints, resulting
from delays in receiving the SPR funding.
§ Annual 23-day maintenance shutdown expected during Q2 2024.
BUSHVELD ENERGY
§ After the Bushveld Electrolyte Company's ("BELCO") plant's completion in
August 2023 and the initial production run, the product samples were
distributed to customers for qualification and compatibility. BELCO's
electrolyte has already been successfully qualified by three international
battery companies and is in the qualification process with others. The company
is in discussion with multiple companies on possible supply contracts.
Furthermore, BELCO has started the process of looking for additional
investors in its plant.
§ As previously announced, the Group has commenced a sale process for its
stake in CellCube, the process still ongoing and in discussion with various
parties.
§ The Mini-grid's plant and all its components are undergoing site acceptance
and grid compliance testing. The plant will generate approximately 10% of
Vametco's electricity requirements.
HEALTHY AND SAFETY
§ Q4 2023 TRIFR of 1.70 (Q4 2022: 5.97), 12M 2023 TRIFR at 2.31 (12M 2022:
10.32). The improvement is a result of the implementation of a safety
diagnostic assessment action plan. Special focus was on leading indicators
namely, visible felt leadership, planned task observations, inspections and
addressing all the audits results.
Corporate update
§ Appointment of the interim Finance Director
Bushveld has appointed Robbie Taylor as non-board interim Finance Director.
Robbie holds a bachelor's degree in commerce from the University of Cape Town
and is a qualified Chartered Accountant. He brings with him over 27 years of
experience as a finance executive in various sectors. Robbie has extensive
experience working with listed entities and multinationals.
His professional skills include areas such as Mergers and Acquisitions, Cost
Control, Corporate Governance, Unit Economics, Profit Optimisation, Management
Accounting and Financial Reporting, and Treasury. The Company will now
commence the search of a permanent Finance Director.
VANADIUM PRICE OUTLOOK
§ Q4 2023 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$31.6/kgV,
showing a decline from US$36.0/kgV achieved in Q3 2023. London Metal Bulletin
and Asian Metals averaged US$26.6/kgV and US$24.2/kgV respectively, also
declining from US$31.5/kgV and US$31.0/kgV in Q3 2023, respectively.
§ 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.
ENDS
Enquiries: info@bushveldminerals.com
Bushveld Minerals Limited +27 (0) 11 268 6555
Craig Coltman, Chief Executive Officer
Chika Edeh, Head of Investor Relations
SP Angel Corporate Finance LLP Nominated Adviser & Joint Broker +44 (0) 20 3470 0470
Richard Morrison / Charlie Bouverat
Grant Barker / Richard Parlons
Hannam & Partners Joint Broker +44 (0) 20 7907 8500
Andrew Chubb / Matt Hasson / Jay Ashfield
Tavistock Financial PR +44 (0) 207 920 3150
Gareth Tredway / Tara Vivian-Neal / James Whitaker
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a primary vanadium producer, it is one of only three
operating primary vanadium producers, with a diversified vanadium product
portfolio serving the needs of the steel, energy and chemical sectors.
Detailed information on the Company and progress to date can be accessed on
the website www.bushveldminerals.com (http://www.bushveldminerals.com)
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