REG - Bushveld Minerals Ld - Interim Results for Six Months ended 30 June 2024
17/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240917:nRSQ4146Ea&default-theme=true
RNS Number : 4146E Bushveld Minerals Limited 17 September 2024
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed
inside information for the purposes of Article 7 of Regulation (EU) No
596/2014 until the release of this announcement
17 September 2024
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Unaudited Interim results for the six-months ended 30 June 2024
Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium
producer, announces its interim results for the six months ended 30 June 2024.
Following the previously announced sale of the Vanchem vanadium processing
plant ("Vanchem") to Southern Point Resources Fund I S.A. LP ("SPR"), Vanchem
has been classified as 'a discontinued operation' and 'held for sale'.
Vanchem's operational results for the current and comparative periods are
presented as discontinued operations in the Group's consolidated interim
statement of profit or loss and its assets and liabilities are presented
separately under current assets and current liabilities, respectively, in the
Group's consolidated interim statement of financial position at 30 June 2024.
H1 2024 Financial Highlights from continuing operations
· Revenue (primarily Vametco) of US$25.6 million (H1 2023: US$55.1
million)
· Group Sales of 949 mtV (H1 2023: 1,428 mtV)
· Average realised price of US$26.9/kgV (H1 2023: US$38.6/kgV)
· Cost per unit sold including sustaining capital of US$42.9/kgV (H1
2023: US$30.8/kgV)
· Adjusted EBITDA(1) loss of US$14.3 million (H1 2023: US$12.6 million
profit)
· Operating loss of US$18.6 million (H1 2023: US$7.9 million profit)
· Net loss of US$45.0 million (H1 2023: net loss US$12.5 million)
· Free cash outflow(2) of US$18.1 million (H1 2023: outflow of US$2.7
million)
· Cash and cash equivalents of US$1.0 million (31 December 2023: US$1.3
million)
· Net debt(3) of US$124.0 million (31 December 2023: US$105.7 million)
(1) Adjusted EBITDA is EBITDA, excluding the Group's share of losses from
investments in associate and joint venture, fair value gain on derivative
liability and other losses.
(2 )Free cash flow defined as operating cash flow less sustaining capital.
(3) Net debt is total debt plus lease liabilities less cash and cash
equivalents.
Group Priorities and Post-Period Update
· Optimising operations and right-sizing the organisation to ensure
that Vametco is a cash-generating asset, expecting to achieve an annualised
savings of US$8-10 million by 2025 year-end, including the following
initiatives:
o Reducing the current labour complement at Vametco and Head Office.
o Reducing costs by transferring purchases of certain goods and services to
longer term contracts.
o Reducing raw material consumption by ensuring assets are running
efficiently.
o Implementing several operational initiatives for yield improvements from
kiln to finished goods.
· Complete outstanding conditions of the Vanchem sale, expecting to
receive Competition Commission approval at the end of October 2024 and
complete final documentation.
· Focused on receiving the outstanding balance of funds due in 2024
from SPR.
· Attaining sustainable production at Vametco of 240 mtV per month by
Q4 2024.
· Complete the sale of certain non-core assets - Lemur Holdings
Limited ("Lemur") and Bushveld Electrolyte Company ("BELCO").
· Cash balance of US$4.1 million as at 31 August 2024.
· OMF Fund III (F) Limited's ("Orion") US$10 million matched funding
received post-period end.
· As announced on 14 August 2024, the Company secured the total amount
of US$12 million of the SPR interim working capital facility announced on
07 May 2024.
· In discussions with Joint Venture ("JV") partner for the transfer of
liabilities from BELCO and removal of a guarantee provided by Bushveld
amounting to ZAR28.75 million (c.US$1.5 million).
· Received approval from the Development Bank of South
Africa ("DBSA") to dispose of Lemur, which will result in Bushveld no longer
being liable for a c.US$2.5 million debt. The disposal remains subject to
certain outstanding conditions being met.
Investor session
Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief
Financial Officer, Robbie Taylor, will host an investor session on Thursday
19(th) September 2024 at 14:00pm BST (15:00pm 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. Pre-submitted questions will be prioritised.
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.
Craig Coltman, CEO of Bushveld Minerals commented:
"The Company experienced a challenging start to the financial year given
severe funding constraints leading to the inability to run our assets
efficiently. This is clearly reflected in these financial results. However,
Bushveld has remained steadfast in its commitment to rationalise assets, and
implement a range of cost-cutting measures in what is now our core asset,
Vametco.
The sale of Vanchem is expected to be concluded, with approval from the
Competition Authorities expected by end October 2024.
As outlined in our Q2 and H1 operational update, May was a standout month at
Vametco, reaching its highest monthly output since the beginning of my tenure
of 217 mtV, demonstrating the early success of some of our turnaround efforts.
Additionally, we saw the successful receipt of the final instalment of US$2
million from SPR, completing the total US$12 million interim working capital
facility initially secured in May 2024. In a further boost to our position, we
received the full US$10 million of the matched funding facility from Orion.
These milestones have enabled us to maintain momentum in our turnaround
journey, but the Company remains focused on managing our working capital
situation and is dependent on a significant amount of funds from SPR for the
balance of funds due in 2024."
Enquiries : info@Bushveldminerals.com (mailto:info@Bushveldminerals.com)
Bushveld Minerals Limited +27 (0) 11 268 6555
Craig Coltman, Chief Executive Officer
SP Angel Corporate Finance LLP Nominated Adviser & Joint Broker +44 (0) 20 3470 0470
Richard Morrison / Charlie Bouverat
Grant Barker / Abigail Wayne
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
ENDS
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a primary vanadium producer. It is one of the world's
three primary vanadium producers, offering compelling exposure to vanadium
through its upstream asset.
Detailed information on the Company and progress to date can be accessed on
the website www.bushveldminerals.com (https://www.bushveldminerals.com/) .
Chief Executive Officer's Review
Dear stakeholders,
The financial results for the first six months of 2024 reflect a challenging
first half of the year for the Company.
We entered the period on the front foot, having completed a fund raising at
the end of 2023 that was intended to help us reduce creditors and secure
availability of goods and services, along with pricing based on longer term
contracts.
For reasons previously explained, this funding was not immediately forthcoming
and the Company was forced to continue to run on a hand-to-mouth basis for
several months. The pre-announced sale of Vanchem, and US$10 million in
matched funding have since strengthened our position, and we remain focused on
managing our working capital situation, but we remain dependent upon SPR for
the balance of funds due in 2024.
In addition, Orion agreed to amend the terms of the agreements entered into
for the convertible loan note refinancing announced on 1 February 2024,
importantly extending the first repayment date on the term loan to 31 December
2025 (previously 30 June 2024).
The major factor out of our control in this regard, remains the Vanadium
price, which continues to trade at levels which place pressure on the ability
of our operations to generate meaningful positive cash flow.
As a result of these, and other factors, the Company recorded an adjusted and
underlying EBITDA loss from continuing operations of US$14.3 million, and an
operating loss of US$18.6 million. Both adjusted EBITDA loss and operating
loss were higher than the prior year due to lower realised prices and lower
sales volumes, partially offset by lower costs of sales. While revenue of
US$25.6 million from continuing operations was 54% lower than the prior year
due to a 30% decrease in the average realise price to US$26.9/kgV and a 34%
decrease in sales to 949 mtV.
The cost of sales, excluding depreciation, from continuing operations for the
first half of 2024 was US$28.3 million, which was US$1.4 million lower than
the prior period primarily due to lower variable production costs.
Production cash costs for continuing operations for the quarter and half year
were $32.8/kgV, driven by higher raw material costs, lower production volumes
due to earlier constraints, and maintenance expenses. As production continues
to stabilise and increase due to our turnaround strategy, we anticipate a
reduction in Vametco's costs in the second half of the year. We are targeting
weighted average production cash costs for the Group of between $26.7/kg and
$27.1/kg, with total Group production projected between 3,800 mtV and 4,000
mtV. Assuming Vanchem's production is excluded for the last two months of the
year (with Competition Commission approval expected to be received at the end
of October 2024), total year Group production guidance will reduce by 400 mtV.
OPERATIONAL OVERVIEW
Bushveld Minerals has continued its efforts to streamline operations and drive
efficiencies, and the Company remains committed to its strategy of asset
rationalisation, which includes cost-cutting measures and a reduction in
headcount, while simultaneously making significant strides in the turnaround
initiative at Vametco. The programme has already delivered improved production
volumes and enhanced operational stability, despite supplier challenges. A
stabilised power supply, secured through our agreement with the local
municipality, has further enabled steady production, and as a result of these
measures, our outlook remains strong for the remainder of 2024 into 2025.
In Q2, Bushveld reported production at Vametco of 548 mtV, and 905 mtV for the
half year. Notably, May was a standout month at Vametco, with production
reaching 217 mtV - the highest monthly output since my tenure began a year
ago. This performance underscores the success of our ongoing turnaround
efforts at Vametco, which has now become our core asset.
Despite financial constraints earlier in the year and a planned 25-day
maintenance shutdown in January and February, we have laid a strong foundation
for further improvements. With additional initiatives set to be implemented at
Vametco in the second half of the year, we are on track to achieve our goal of
240 mtV of sustainable monthly production by Q4 2024.
Furthermore, during this period, Bushveld has continued to progress its asset
rationalisation strategy. While no definitive agreement has been reached, we
are in discussions with our JV partner, the Industrial Development
Corporation, regarding the transfer of ownership of BELCO, which would include
all liabilities and a guarantee of approximately US$1.5 million from Bushveld.
We have also received approval from DBSA to proceed with the disposal of
Lemur, which will result in Bushveld no longer being accountable for the
outstanding US$2.5 million debt on the asset, contingent on certain conditions
being met.
Following shareholder approval in June, we are now advancing the sale of
Vanchem, with approval from the Competition Commission expected by the end of
October 2024.
Health and Safety
I'm pleased to report that in H1 2024, TRIFR reduced by over 60% to 1.30 from
3.39 in H1 2023, reflecting the successful implementation of the Safety
Diagnostic Audit and a strategic focus on leading indicators, which have
collectively contributed to a notable reduction in safety incidents.
2024 priorities and outlook
Bushveld also renegotiated agreements with Orion during the period, which
include additional funding commitments matching those paid by SPR.
As mentioned, post-period end, Bushveld Minerals has made significant strides
in strengthening its financial position and supporting the execution of our
turnaround strategy at Vametco.
We announced the successful receipt of the final instalment of US$2 million
from SPR, completing the total US$12 million interim working capital facility
that was initially secured in May 2024. In addition, Orion agreed to match
SPR's additional funds on a dollar-for-dollar basis, up to a maximum of US$10
million, and received approval by SARB and secured the full US$10 million from
Orion, as announced 02 September 2024.
The combined funding of US$22 million from SPR and Orion will significantly
enhance our working capital position, allowing us to reduce our long
outstanding creditor balances, support our ongoing turnaround initiatives at
Vametco, and cover transaction costs. We have also commenced work on critical
cost-cutting and development initiatives aimed at returning the Company to
profitability and securing its long-term future.
Looking ahead, I am focused on executing the Company's asset rationalisation
and turnaround strategies at Vametco, positioning the company as a simple,
fast and effective business.
FINANCIAL OVERVIEW
Unit H1 2024 % change H1 2023
Revenue US$m 25,6 -54% 55,1
Cost of sales US$m (32,4) -6% (34,3)
Other operating income and costs US$m (5,5) -7% (5,9)
Administrative costs US$m (6,3) -10% (7,0)
Adjusted EBITDA US$m (34,3) -432% 10,3
- continuing operations US$m (14,3) -214% 12,6
- discontinued operation US$m (19,9) 763% (2,3)
Underlying EBITDA US$m (21,9) -313% 10,3
- continuing operations US$m (14,3) -214% 12,6
- discontinued operation US$m (7,6) 229% (2,3)
Average foreign exchange rate US$/ZAR 18,73 3% 18,21
Group production mtV 1 693 -5% 1 784
- continuing operations mtV 905 -22% 1 167
- discontinued operation mtV 788 28% 617
Group sales mtV 1 639 -22% 2 096
- continuing operations mtV 949 -34% 1 428
- discontinued operation mtV 690 3% 668
All-in sustaining costs ("AISC") US$/kgV 47,1 41% 33,4
- continuing operations US$/kgV 42,9 40% 30,8
- discontinued operation US$/kgV 52,8 36% 38,9
Average realised price US$/kgV 25,1 -33% 37,4
- continuing operations US$/kgV 26,9 -30% 38,6
- discontinued operation US$/kgV 22,5 -36% 34,9
The sale of Vanchem was considered to be highly probable as at 30 June 2024.
Vanchem was therefore accounted for as held for sale and its operating results
for the current and comparative period were reported as discontinued
operations.
The financial results for the first six months reflect a challenging start to
the year for the Company. The Company recorded an adjusted EBITDA loss of
US$14.3 million from continuing operations and an adjusted EBITDA loss of
US$19.9 million from discontinued operations and an operating loss of US$18.6
million. Both adjusted EBITDA loss and operating loss were lower than the
prior year due to lower realised prices and lower sales volumes, partially
offset by lower costs of sales.
Income statement
The income statement summary below is adjusted from the primary statement
presentation.
In US$'000 H1 2024 % change H1 2023
Revenue 25 550 -54% 55 103
Cost of sales excluding depreciation (28 324) -5% (29 743)
Other operating income and costs (5 488) -7% (5 893)
Administration costs excluding depreciation (6 067) -11% (6 849)
Underlying EBITDA (14 329) -214% 12 618
Impairment losses - 0% -
Adjusted EBITDA (14 329) -214% 12 618
Depreciation (4 296) -10% (4 757)
Operating profit / (loss) (18 625) -337% 7 861
Fair value gain on derivative liability 107 100% -
Share of loss from associate and joint venture - -100% (1 504)
Other gains / (losses) 36 -101% (3 375)
Net financing expenses (5 847) -11% (6 539)
Loss before tax (24 329) 584% (3 557)
Income tax 3 567 -232% (2 712)
Loss from continuing operations (20 762) 231% (6 269)
Loss from discontinuing operations (24 237) 289% (6 224)
Net loss for the period (44 999) 260% (12 493)
Revenue from continuing operations
H1 2024 H1 2023
Group sales (mtV) 949 1 428
Average realised price (US$/kgV) 26.9 38.6
Revenue (US$'000) 25 550 55 103
Revenue of US$25.6 million from continuing operations was 54% lower than the
prior year due to a 30% decrease in the average realise price to US$26.9/kgV
and a 34% decrease in sales to 949 mtV.
The geographic split of Group sales during the first half of 2024 was 48% to
the USA (H1 2023: 49%), 33% to Europe (H1 2023: 29%), 9% to Asia (H1 2023:
6%), 5% to South Africa (H1 2023: 6%), and 5% to the rest of the world (H1
2023: 10%).
During the period, Bushveld continued to prioritise nitro vanadium sales into
North America given the higher vanadium prices in the region. Sales into the
aerospace and specialty chemical products sectors were also a focus given the
price premiums these sectors attract.
Cost analysis
In US$'000 H1 2024 H1 2023
Continuing operations
Cost of sales excluding depreciation (28 324) (29 743)
Other operating income and costs (5 488) (5 893)
Administration costs excluding depreciation (6 067) (6 849)
Total income statement cost excluding depreciation (39 879) (42 485)
Total units sold (mtV) 949 1 428
Cost per income statement per unit sold (excluding depreciation) (US$/KgV) 42.0 29.8
Sustaining capital (862) (1 461)
Total cost including sustaining capital (40 741) (43 946)
Cost per unit sold including sustaining capital from continuing operations
(US$/KgV)
42.9 30.8
Cost per unit sold including sustaining capital from discontinued operation
(US$/KgV)
52.8 38.9
Cost per unit sold including sustaining capital (US$/KgV) 47.1 33.4
Cost per unit sold from continuing operations
The cost per unit sold from continuing operations for the half year (including
sustaining capital expenditure) was US$42.9/kgV. This represents a 40%
increase relative to the prior year primarily as a result of lower sales
volumes, partially offset by the cost factors noted below.
Cost of sales
The cost of sales, excluding depreciation, from continuing operations for the
first half of 2024 was US$28.3 million, which was US$1.4 million lower than
the prior period primarily due to lower variable production costs incurred.
Other operating income and costs
Other operating income and costs from continuing operations of US$5.5 million
decreased by US$0.4 million primarily due to:
· A US$1.9 million reduction in selling and distribution costs to
US$2.7 million primarily driven by lower commissions due to the lower average
realised sales prices and lower distribution costs due to the lower sales
volumes.
· This reduction was partially offset by a US$1.5 million decreased in
other operating income primarily due to reduction in foreign exchange gains
due to the strengthening of the Rand compared to the US$.
Administration costs
Administration costs, excluding depreciation charges, from continuing
operations for the half year, was US$6.1 million. Below is a breakdown of the
key items included in administration costs:
In US$'000 H1 2024 H1 2023
Staff costs 2 482 3 235
Professional fees 544 1 846
Other (incl. IT and security expenses) 3 041 1 768
6 067 6 849
Adjusted and underlying EBITDA
Adjusted EBITDA is a factor of volumes, prices and cost of production. This is
a measure of the underlying profitability of the Group, which is widely used
in the mining sector. Underlying EBITDA removes the effect of impairment
charges.
In US$'000 H1 2024 H1 2023
Continuing operations
Revenue 25 550 55 103
Cost of sales (32 367) (34 324)
Other operating income and costs (5 488) (5 893)
Administration costs (6 320) (7 025)
Add: Depreciation and amortization 4 296 4 757
Adjusted EBITDA from continuing operations (14 329) 12 618
Adjusted EBITDA from discontinued operation (19 921) (2 308)
Adjusted EBITDA (34 250) 10 310
Add: Impairment losses from continuing operations - -
Add: Impairment losses from discontinued operation 12 317 -
Underlying EBITDA from continuing operations (14 329) 12 618
Underlying EBITDA from discontinued operations (7 604) (2 308)
Underlying EBITDA (21 933) 10 310
The Group delivered an adjusted and underlying EBITDA loss of US$14.3 million
from continuing operations, a decrease of US$26.9 million compared to the
previous year, primarily driven by lower realised sales prices and lower sales
volumes, partially offset by lower costs of sales.
Other gains/(losses)
Other gains/(losses) of US$36k consists of a gain recognised on the
remeasurement of the Orion production financing arrangement of US$1.2 million
partially offset by a write-down of US$1.2 million on the investment in
VRFB/CellCube.
Net financing expenses
Net financing expenses were US$5.8 million, US$0.7 million lower than in the
prior year.
In US$'000 H1 2024 H1 2023
Finance income (82) (235)
Interest on borrowings 4 813 6 050
Unwinding of discount 371 382
Interest on lease liabilities 383 322
Other finance costs 362 20
Net finance expenses 5 847 6 539
Interest on borrowings primarily reflected the interest on the Orion
convertible loan note of US$1.1 million (H1 2023: US$3.7 million), interest on
the Orion production financing arrangement of US$2.2 million (H1 2023: US$2.2
million), and interest on the Orion senior term loan of US$1.4 million (H1
2023: $nil).
Loss from discontinued operations
Vanchem was accounted for as a discontinued operation and its operating
results for the current and comparative period were reported as net loss from
discontinued operations. The net loss from discontinued operations were
US$24.2 million, an increase of US$18.0 million compared to the prior year.
The increase in the net loss from discontinued operations was primarily due to
the impairment loss recognised in order to align the net asset value of
Vanchem with the expected discounted sales proceeds of US$32.0 million,
decrease in revenue due to a lower average realised price partially offset by
lower cost of sales due to costs saving initiatives.
Balance sheet
Assets
The sale of Vanchem was considered highly probable and therefore the assets
and liabilities of Vanchem were classified as assets and liabilities held for
sale and presented separately under current assets and current liabilities,
respectively in the Group's consolidated interim statement of financial
position at 30 June 2024.
Property, plant and equipment decreased by US$51.6 million compared to the
previous year primarily due to the impairment loss recognised for Vanchem and
the reclassification of Vanchem as assets held for sale.
Inventories of US$25.8 million decreased by US$16.4 million compared to the
prior year, primarily due to a reclassification of Vanchem as assets held for
sale of $11.2 million and the reduction in work-in-progress stocks and
weighted average production costs.
Trade and other receivables of US$15.6 million decreased by US$9.4 million
compared to the prior year primarily due to the reclassification of Vanchem as
assets held for sale of $6.1 million. The remaining decrease is primarily due
to the collection of US$1.4 million of the subscription receivables and
collection of other trade receivables.
The decrease in cash and cash equivalents to US$1.0 million was primarily due
to cash used from operations (US$16.3 million), capital expenditures incurred
(US$1.9 million), repayment of finance costs (US$1.9 million), partially
offset by net proceeds received from the interim working capital facility
(US$18.9 million) and net proceeds received from the equity raise (US$1.4
million).
Liabilities
Total borrowings (excluding leases) of US$116.4 million increased by US$17.9
million compared to the previous year primarily due to the additional funds
received from the SPR interim working capital facility of US$18.9 million and
the capitalisation of finance costs to borrowings of US$5.9 million, partially
offset by the 10% conversion of the Orion convertible loan notes by issuing
124,747,016 new ordinary shares and the repayment of finance costs of US$1.9
million.
The net debt reconciliation below outlines the Group's total debt and cash
position:
30 June 2024 31 Dec 2023 Change
In US$'000
Orion production financing arrangement (35 768) (35 635) (133)
Orion convertible loan notes (14 787) (46 766) 31 979
Orion senior term loan (29 658) - (29 658)
Industrial Development Corporation loans (6 747) (6 238) (509)
SPR interim working capital facility (27 807) (7 812) (19 995)
Other (1 664) (2 124) 460
Lease liabilities (8 570) (8 428) (142)
Total debt (125 001) (107 003) (17 998)
Cash and cash equivalents 1 028 1 281 (253)
Net debt (123 973) (105 722) (18 251)
Cash flow statement
The table below summarises the main components of cash flow during the year:
In US$'000 H1 2024 H1 2023
Operating profit/(loss) (18 625) 7 861
Depreciation 4 296 4 757
Other non-cash items (1 007) (12 755)
Changes in working capital and provisions 4 337 (4 571)
Taxes paid (799) (1 902)
Cash outflow from continuing operations (11 798) (6 610)
Cash inflow/(outflow) from discontinued operation (4 472) 5 690
Cash outflow from operations (16 270) (920)
Sustaining capital expenditures (1 850) (1 793)
Free cash flow (18 120) (2 713)
Cash generated from/(used in) other investing activities 21 (2 521)
Cash generated from/(used in) financing activities 17 846 (1 313)
Cash outflow (253) (6 547)
Opening cash and cash equivalents 1 281 10 874
Less cash and cash equivalents classified as held for sale
(47) -
Foreign exchange movement 47 (585)
Closing cash and cash equivalents 1 028 3 742
Operating activities
Cash used in operating activities was US$16.3 million, an increase of US$15.3
million from the previous year, primarily driven by the higher operating loss
incurred partially offset by the inflow from changes in working capital and
provisions.
Investing activities
Cash used in investing activities, including sustaining capital expenditure of
US$1.9 million was primarily driven by capital expenditure on property, plant
and equipment.
Capital Expenditure (US$' million)
In US$ millions H1 24 H1 23
Vametco
- Growth - -
- Sustaining 0.9 1.5
Vanchem
- Growth - -
- Sustaining 0.9 0.3
Bushveld Energy
- Growth 0.1 2.5
- Sustaining - 0.0
Total 1.9 4.3
Financing activities
Cash generated from financing activities of US$17.8 million comprised of the
proceeds received from the SPR interim working capital facility of US$18.9
million and the equity proceeds received of US$1.4 million, partially offset
by the repayment of finance costs of $1.9 million and repayment of lease
liabilities of US$0.3 million.
Going concern and outlook
We closely monitor and manage liquidity risk by ensuring that the Group has
sufficient funds for all ongoing operations. As part of the liquidity planning
process, the Directors reviewed the approved Group production outlook and base
case cashflow forecast through to 30 September 2025. The base case cashflow
forecast has been amended in line with any material changes identified during
the year. Equally, where funding requirements are identified from the base
case cashflow forecast, appropriate measures are taken to ensure these
requirements are tracked and can be met.
We have performed an assessment of whether the Group would be able to continue
as a going concern for at least twelve months from balance sheet date. We took
into account the financial position, outstanding cash flow commitments from
SPR for the balance of 2024, expected future performance of the operations,
the debt facilities and debt service requirements, the working capital
requirements, capital expenditure commitments and forecasts, expected proceeds
from the sale of Vanchem and Mokopane. The Directors have identified and are
proactively monitoring options within their control which will improve the
Group's liquidity. Additionally, we factored in the favourable relationship
with Orion, demonstrated by the restructuring of agreements to accommodate
market conditions and constructive engagement in relevant matters.
The Group's ability to continue as a going concern is dependent on its ability
to complete the sale of Vanchem and Mokopane and the timing of those sales
proceeds, monitoring options within their control, the continued support of
Orion, and achieving the planned production levels at the estimated average
sales prices of US$29.15/kgV for the remainder of 2024 (which is 8% greater
than current prices) and estimated average sales prices of US$34.40/kgV (which
is 27% greater than current prices) throughout 2025 which were based on
industry analysts' market research.
These conditions indicate the existence of material uncertainties that may
cast significant doubt on the Group's ability to continue as a going concern.
The interim consolidated financial statements for the period ended 30 June
2024 have been prepared on a going concern basis as, in the opinion of the
Directors, the Group will be in a position to continue to meet its operating
and capital costs requirements and pay its debts as and when they fall due for
at least twelve months from the date of this report.
Bushveld Minerals Limited
Consolidated Interim Financial Statements for the period ended 30 June 2024
Consolidated Statement of Profit or Loss
6 months 6 months
ended 30 June ended 30 June
2024 2023
Unaudited Unaudited
Figures in thousands of US$ Notes
Continuing operations
Revenue 25,550 55,103
Cost of sales (32,367) (34,324)
Gross (loss) profit (6,817) 20,779
Other operating income 259 1,738
Selling and distribution costs (2,730) (4,590)
Other mine operating costs (1,350) (1,492)
Idle plant costs (1,667) (1,549)
Administrative expenses (6,320) (7,025)
Operating profit / (loss) (18,625) 7,861
Finance income 82 235
Finance costs (5,929) (6,774)
Other gains / (losses) 36 (3,375)
Fair value gain on derivative liability 107 -
Share of loss from investments in associate and joint venture - (1,504)
Loss before taxation (24,329) (3,557)
Taxation 3,567 (2,712)
Loss from continuing operations (20,762) (6,269)
Loss from discontinued operations, net of taxation 4 (24,237) (6,224)
Loss for the period (44,999) (12,493)
Loss attributable to:
Owners of the parent (44,999) (14,093)
Non-controlling interest - 1,600
(44,999) (12,493)
Loss per ordinary share
Basic loss per share (cents) 3 (1.97) (1.09)
Diluted loss per share (cents) 3 (1.97) (1.09)
The accompanying notes are an integral part of these unaudited condensed
consolidated interim financial statements.
Consolidated Statement of Comprehensive Loss
6 months 6 months
ended 30 June ended 30 June
2024 2023
Unaudited Unaudited
Figures in thousands of US$ Notes
Loss for the period (44,999) (12,493)
Other comprehensive income / (loss):
Items that may be reclassified to profit or loss:
Currency translation differences 183 (15,097)
Total comprehensive loss (44,816) (27,590)
Total comprehensive loss attributable to:
Owners of the parent (44,816) (24,716)
Non-controlling interest - (2,874)
(44,816) (27,590)
The accompanying notes are an integral part of these unaudited condensed
consolidated interim financial statements
Consolidated Statement of Financial Position
Figures in thousands of US$ Notes 30 June 31 December
2024 2023
Unaudited Audited
Assets
Non-current assets
Property, plant and equipment 5 48,193 99,744
Investment property 2,217 2,173
Investments in associate and joint venture 1,080 2,360
Deferred tax asset 4,209 464
Restricted investment 3,071 2,881
Total non-current assets 58,770 107,622
Current assets
Inventories 6 25,853 42,273
Trade and other receivables 7 15,619 25,018
Other financial assets 24 24
Cash and cash equivalents 8 1,028 1,281
42,524 68,596
Assets held for sale 4 57,678 3,700
Total current assets 100,202 72,296
Total assets 158,972 179,918
Equity and liabilities
Share capital 9 28,527 26,944
Share premium 9 143,405 140,272
Accumulated loss 9 (163,005) (118,006)
Share-based payment reserve 261 261
Foreign currency translation reserve (46,983) (47,166)
Fair value reserve (1,783) (1,783)
Equity attributable to owners of the parent (39,578) 522
Non-controlling interest 288 288
Total equity (39,290) 810
Liabilities
Non-current liabilities
Post retirement medical liability 1,606 1,577
Environmental rehabilitation liabilities 7,232 16,633
Deferred consideration - 306
Borrowings 10 111,268 38,008
Lease liabilities 7,787 7,746
Total non-current liabilities 127,893 64,270
Current liabilities
Trade and other payables 11 36,953 46,295
Provisions 1,520 1,944
Borrowings 10 5,163 60,567
Lease liabilities 783 682
Deferred consideration 2,586 2,304
Current tax payable 2,135 3,046
49,140 114,838
Liabilities relating to assets held for sale 4 21,229 -
Total Current Liabilities 70,369 114,838
Total liabilities 198,262 179,108
Total equity and liabilities 158,972 179,918
Consolidated Statement of Changes in Equity
Share capital Share premium Foreign currency translation Share-based Fair value reserve Accumulated Total attributable to equity holders of the group Non- controlling Total equity
reserve payment reserve loss interest
Figures in thousands of US$
Balance at 1 January 2023 17,122 127,702 (35,346) 515 (1,798) (39,147) 69,048 36,583 105,631
Loss for the period - - - - - (103,927) (103,927) (2,842) (106,769)
Other comprehensive loss, net of tax: Currency translation differences - - (11,820) - - - (11,820) (853) (12,673)
Other fair value movements - - - - 15 - 15 - 15
Total comprehensive loss for the period - - (11,820) - 15 (103,927) (115,732) (3,695) (119,427)
Transaction with owners: Issue of shares
6,874 9,977 - - - - 16,851 - 16,851
Share issue costs - (945) - - - - (945) - (945)
Share-based payment - - - (254) - - (254) - (254)
Acquisition of non-controlling interest 2,948 3,538 - - - 25,068 31,554 (33,036) (1,482)
Contribution from non-controlling interest - - - - - - - 436 436
Audited balance at 31 December 2023 26,944 140,272 (47,166) 261 (1,783) (118,006) 522 288 810
Loss for the period - - - - - (44,999) (44,999) - (44,999)
Other comprehensive income, net of tax: Currency translation reserve - - 183 - - - 183 - 183
Total comprehensive loss for the period - - 183 - - (44,999) (44,816) - (44,816)
Issue of shares 1,583 3,133 - - - - 4,716 - 4,716
Unaudited balance at 30 June 2024 28,527 143,405 (46,983) 261 (1,783) (163,005) (39,578) 288 (39,290)
Notes 9 9
Consolidated Statement of Cash Flows
6 months 6 months
ended 30 June ended 30 June
2024 2023
Unaudited Unaudited
Figures in thousands of US$ Notes
Cash flows from operating activities
Loss before taxation from continuing operations (24,329) (3,557)
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets 5 4,296 4,757
Share of loss from investments in associate and joint ventures - 1,504
Fair value gain on derivative liability (107) -
Other (gains) / losses (36) 2,125
Finance income (82) (235)
Finance costs 5,929 6,774
Other non-cash movements 7 (1,613)
Foreign exchange differences (1,015) (9,892)
Changes in working capital 4,338 (4,571)
Income taxes paid (799) (1,902)
Net cash used in operating activities related to continuing operations (11,798) (6,610)
Net cash used in operating activities related to discontinued operation (4,472) 5,690
Net cash used in operating activities (16,270) (920)
Cash flows from investing activities
Finance income 82 97
Purchase of property, plant and equipment (949) (4,008)
Purchase of exploration and evaluation assets - (71)
Net cash used in investing activities related to continuing operations (867) (3,982)
Net cash used in investing activities related to discontinued operation (962) (332)
Net cash used in investing activities (1,829) (4,314)
Cash flows from financing activities
Proceeds from borrowings 10 19,025 1,294
Lease payments (328) (331)
Finance costs 10 (1,943) (2,258)
Purchase of non-controlling interest (310) -
Equity proceeds (net) 1,417 -
Net cash generated from / (used in) financing activities related to continuing 17,861 (1,295)
operations
Net cash generated used in financing activities related to discontinued (15) (18)
operation
Net cash generated from / (used in) financing activities 17,846 (1,313)
Total cash and cash equivalents movement for the period (253) (6,547)
Cash and cash equivalents at the beginning of the period 1,281 10,874
Less cash and cash equivalents including in assets held for sale (47) -
Effect of translation of foreign exchange rates 47 (585)
Total cash and cash equivalents at end of the period 1,028 3,742
Notes to the Condensed Consolidated Interim Financial Statements
1. Corporate information and principal activities
Bushveld Minerals Limited ("Bushveld" or the "Company") and its subsidiaries
and interest in equity accounted investments (together the "Group") are an
integrated primary vanadium producer. The company was incorporated and
domiciled in Guernsey on 5 January 2012 and admitted to the AIM market in
London on 26 March 2012.
The address of the Company's registered office is 18-20 Le Pollet, St Peter
Port, Guernsey. The unaudited condensed consolidated interim financial
statements ("consolidated interim financial statements") of the Company for
the interim period ended 30 June 2024 comprise of the Company and its
subsidiaries and interest in equity accounted investments.
2. Significant accounting policies Basis of accounting
The results presented in this report are unaudited and they have been prepared
in accordance with the recognition and measurement principles of UK-adopted
International Accounting Standards that are expected to be applicable to the
next set of financial statements and on the basis of the accounting policies
to be used in those financial statements.
The consolidated interim financial statements do not include all of the
information required for full annual financial statements and accordingly,
whilst the consolidated interim financial statements have been prepared in
accordance with the recognition and measurement principles of the UK-adopted
International Accounting Standards, it cannot be construed as being in full
compliance with the UK-adopted International Accounting Standards. The
financial information contained in this announcement does not constitute
statutory accounts as defined by the Companies (Guernsey) Law 2008.
The consolidated interim financial statements have not been audited or
reviewed in accordance with International Standard on Review Engagements (UK)
2410. The consolidated financial statements for the period ended 31 December
2023 is based on the statutory accounts for the period ended 31 December 2023.
The auditor reported on those accounts which were not qualified but included a
material uncertainty related to going concern.
The consolidated interim financial statements have been prepared on the basis
of accounting policies applicable to a going concern. This basis presumes that
funds will be available to finance future operations and that the realisation
of assets and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business.
Going concern
The interim consolidated financial statements have been prepared on the going
concern basis, which contemplates continuity of normal business activities and
the realisation of assets and discharge of liabilities in the normal course of
business.
The Group recorded a net loss after tax of US$45.0 million for the period
ended 30 June 2024. As at 30 June 2024 the Group had cash and cash equivalents
of US$1.03 million and total borrowings of US$116.43 million.
The Directors closely monitor and manage the liquidity risk of the Group by
ensuring that the Group has sufficient funds for all ongoing operations. As
part of the liquidity planning process, the Directors reviewed the approved
Group production outlook and base case cashflow forecast through to 30
September 2025. The base case cashflow forecast has been amended in line with
any material changes identified during the year. Equally, where funding
requirements are identified from the base case cashflow forecast, appropriate
measures are taken to ensure these requirements are tracked and can be met.
The Group has entered into a revised sales agreement with SPR, which was
approved by the shareholders, whereby the Group will sell 100% of Vanchem. The
closing of the Vanchem sale remains conditional upon approval by the
Competition Tribunal. The Group also entered into revised agreements with
Orion Mine Finance ("Orion") whereby the Group received additional funding of
US$10 million under the senior term loan facility and the repayment of
interest and capital were extended to 31 December 2025.
The Directors have performed an assessment of whether the Group would be able
to continue as a going concern for at least twelve months. In their
assessment, the Group has taken into account its financial position,
outstanding cash flow commitments from SPR for the balance of 2024, expected
future performance of its operations, its debt facilities and debt service
requirements, its working capital requirements, capital expenditure
commitments and forecasts, expected proceeds from the sale of Vanchem and
Mokopane. The Directors have identified and are proactively monitoring options
within their control which will improve the Group's liquidity. Additionally,
the Directors factored in the favourable relationship with Orion, demonstrated
by the restructuring of agreements to accommodate market conditions and
constructive engagement in relevant matters.
The Group's ability to continue as a going concern is dependent on its ability
to complete the sale of Vanchem and Mokopane and the timing of those sales
proceeds, monitoring options within their control, the continued support of
Orion, and achieving the planned production levels at the estimated average
sales prices of US$29.15/kgV for the remainder of 2024 (which is 8% greater
than current prices) and estimated average sales prices of US$34.40/kgV
(which is 27% greater than current prices) throughout 2025 which were based on
industry analysts' market research.
These conditions indicate the existence of material uncertainties that may
cast significant doubt on the Group's ability to continue as a going concern.
The interim consolidated financial statements for the period ended 30 June
2024 have been prepared on a going concern basis as, in the opinion of the
Directors, the Group will be in a position to continue to meet its operating
and capital costs requirements and pay its debts as and when they fall due for
at least twelve months from the date of this report.
Accordingly, these interim consolidated financial statements do not include
adjustments to the recoverability and classification of recorded assets and
liabilities and related expenses that might be necessary should the Group be
unable to continue as a going concern.
Use of estimates and judgements
The preparation of consolidated interim financial statements requires
management to make judgments, estimates and assumptions that affect the
reported amounts of assets, liabilities and contingent liabilities as at the
date of the consolidated interim financial statements and reported amounts of
revenues and expenses during the period ended 30 June 2024. Estimates and
assumptions are continuously evaluated and are based on management's
experience and other factors, including expectations of future events which
are believed to be reasonable under the circumstances. Actual results may
differ from these estimates.
Determination of Assets Held for Sale and Discontinued Operations
Critical Judgements in Applying Accounting Policies
Judgement is required in determining whether an asset or disposal group should
be classified as held for sale. An asset or disposal group should be
classified as held for sale when it is available for immediate sale in its
present condition and its sale is highly probable. The Group determined the
sale of Vanchem was considered highly probable.
Management also applies judgement to determine whether a component of the
Group that either has been disposed of, or is classified as held for sale,
meets the criteria of a discontinued operation. The key area that involves
management judgement in this determination is whether the component represents
a separate major line of business or geographical area of operation. This
determination was applied to the sale of Vanchem and the Group concluded that
Vanchem was a sperate major line of business and was considered to be a
discontinued operation.
Deferred tax assets
Key sources of estimation uncertainty
Deferred tax assets are recognised only to the extent it is considered
probable that those assets will be recoverable. This involves an assessment of
when those assets are likely to reverse, and a judgement as to whether or not
there will be sufficient taxable profits available to offset the assets when
they do reverse. This requires assumptions regarding future profitability and
is therefore inherently uncertain. To the extent assumptions regarding future
profitability change, there can be an increase or decrease in the amounts
recognised in respect of deferred tax assets as well as in the amounts
recognised in income in the period in which the change occurs.
Adoption of New Accounting Standards and New Accounting Standards Issued but
Not Yet Effective
(a) Adoption of new accounting standards
These consolidated interim financial statements have been prepared following
the same accounting policies and methods of computation as the audited annual
consolidated financial statements for the year ended 31 December 2023. In
addition, the following new accounting pronouncements are effective for annual
periods beginning on or after 1 January 2024 and have been incorporated into
the consolidated interim financial statements:
* Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
* Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases).
* Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7).
The adoption of these pronouncements did not have a significant impact.
(b) New accounting standards issued but not effective
2. Significant accounting policies (continued)
Certain pronouncements have been issued by the International Accounting
Standards Board (IASB) that are mandatory for accounting periods after June
30, 2024:
· Lack of exchangeability (Amendments to IAS 21) which is effective
for periods on or after 1 January 2025.
· Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7) which is effective for periods
on or after 1 January 2026.
· Presentation and Disclosure in Financial Statements (IFRS 18)
which is effective for periods on or after 1 January 2027.
· Sale or Contribution of Assets Between an Investor and its
Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) amendments were
to be applied prospectively for annual periods beginning on or after 1 January
2016, however, on 17 December 17 the IASB decided to defer the effective date
for these amendments indefinitely. Early adoption is still permitted. The
Company does not intend to early adopt these standards.
Pronouncements related to IAS 21, IFRS 9, IFRS 7, IFRS 10 and IAS 28 are not
expected to have a significant impact on the consolidated interim financial
statements upon adoption and the impact of the introduction of IFRS 18 is
under assessment.
3. Loss per share Basic loss per share
Basic loss per share is calculated by dividing the net loss attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the period excluding ordinary shares purchased by the
Company and held as treasury shares.
6 months 6 months
ended ended
30 June 30 June
Figures in thousands of US$ 2024 2023
Unaudited Unaudited
Numerator
Net loss from continuing operations attributable to equity holders (20,762) (7,869)
Net loss from discontinued operations attributable to equity holders (24,237) (6,224)
Net loss attributable to equity holders (44,999) (14,093)
Denominator (in thousands)
Weighted average number of common shares 2,289,774 1,287,148
Basic loss per share from continuing operations attributable to equity holders (0.91) (0.61)
(cents)
Basic loss per share from discontinued operations attributable to equity (1.06) (0.48)
holders (cents)
Basic loss per share attributable to equity holders (cents) (1.97) (1.09)
Diluted loss per share
Due to the Group being loss making for the period, instruments are not
considered dilutive and therefore the diluted loss per share is the same as
basic loss per share for all periods.
4. Assets and liabilities held for sale
Mokopane Vanadium and Iron Ore Project Disposal
Vanadium and Iron Ore
Figures in thousands of US$
Balance, 1 January 2023 53,469
Capitalised expenditures 322
Impairment loss (49,620)
Exchange differences (471)
Transfer to asset held for sale (3,700)
Balance, 31 December 2023 and 30 June 2024 -
The Group has an interest in Prospecting right 95. The Department of Mineral
Resources and Energy ("DMRE") executed a 30-year mining right on 29 January
2020 in favour of Pamish, over five farms: Vogelstruisfontein 765 LR;
Vriesland 781 LR; Vliegekraal 783 LR; Schoonoord 786 LR; and Bellevue 808 LR
(the "Mining Right") situated in the District of Mogalakwena, Limpopo, which
make up the Mokopane Project.
The Mining Right required Pamish to commence mining activities, including
in-situ activities associated with the Definitive Feasibility Study ("DFS") by
end of January 2021. The Covid-19 pandemic resulted in a significant delay in
the commencement of the DFS and the necessary engagement with local
communities required to finalise land use arrangements and, consequently, this
deadline was not met. Application to the DMRE for an extension to commence
mining activities has been submitted and Pamish is awaiting a response.
The Group entered into a sale of shares agreement with SPR on 14 December 2023
to sell its interest in the Mokopane Project for US$3.7 million. The
transaction is subject to certain regulatory approvals as well as other
customary closing conditions. The Competition Commission approved the sale on
31 May 2024.
At 31 December 2023, the Mokopane intangible asset met the criteria to be
classified as held for sale and has been classified as a current asset held
for sale on the consolidated statement of financial position. During the year
ended 31 December 2023, an impairment charge of US$49.62 million was
recognised in the consolidated statements of profit or loss to align the
carrying value of the asset with the sales price. The intangible asset forms
part of the exploration segment.
Vanchem Disposal
The Group entered into a revised sales agreement with SPR to sell Vanchem for
a total consideration of up to US$40 million, comprising of an initial
consideration of US$20 million and a deferred consideration of between US$15
million and US$20 million (the "Disposal"). The Disposal was approved by the
shareholders on 31 May 2024. The transaction is subject to Competition
Tribunal approval as well as other customary closing conditions.
At 30 June 2024, Vanchem met the criteria to be classified as held-for-sale
and discontinued operations in accordance with IFRS 5. The results of Vanchem
have been restated for the current and comparative year to reclassify the net
loss as net loss from discontinued operations. All assets and liabilities
relating to Vanchem were classified as assets and liabilities held for sale
and presented separately under current assets and current liabilities,
respectively in the Group's consolidated statement of financial position at 30
June 2024. Vanchem forms part of the Vandium mining and production segment.
During the six months ended 30 June 2024, an impairment charge of US$12.32
million was recognised in the consolidated statement of profit or loss to
align the carrying value of Vanchem with the consideration expected to be
received.of US$32 million.
The net loss from discontinued operations from Vanchem for the six month
period ended 30 June 2024 and 203 are as follows:
30 June 30 June
2024 2023
Figures in thousands of US$ Unaudited Unaudited
Revenue 15,523 23,325
Cost of sales (19,365) (24,621)
Gross loss (3,842) (1,296)
Other operating income 35 520
Impairment losses (12,317) -
Selling and distribution costs (262) (302)
Other mine operating costs (429) (1,245)
Idle plant costs (4,241) (2,283)
Administration expenses (1,742) (1,196)
Operating loss (22,798) (5,802)
Finance income 26 -
Finance costs (1,449) (542)
Loss before taxation (24,221) (6,344)
Taxation (16) 120
Net loss from discontinued operations (24,237) (6,224)
The assets and liabilities of Vanchem that are included in the held-for-sale
categories are summarized below:
30 June
2024
Unaudited
Figures in thousands of US$
Assets
Property, plant and equipment 36,689
Inventories 11,159
Trade and other receivables 6,083
Cash and cash equivalents 47
Total assets held for sale 53,978
Liabilities
Environmental rehabilitation liability 10,699
Deferred tax liability 7
Trade and other payables 10,261
Provisions 250
Lease liabilities 12
Total liabilities relating to assets held for sale 21,229
Net assets held for sale 32,749
5. Property, plant and equipment
Buildings Motor vehicles, furniture and equipment Waste stripping
Figures in thousands of US$ and other improvements Plant and machinery* Right-of-use asset Assets under construction
assets Total
Cost
At 1 January 2023 6,575 178,548 1,454 7,620 1,782 14,564 210,543
Additions - - 245 1,729 616 5,454 8,044
Changes in environmental rehabilitation liabilities - (336) - - - - (336)
Scrapping of obsolete assets (34) (4,443) (192) (424) - - (5,093)
Transfers within PPE 264 2,106 - - - (2,370) -
Exchange differences (556) (12,055) (119) (664) (157) (1,301) (14,852)
At 31 December 2023 (audited) 6,249 163,820 1,388 8,261 2,241 16,347 198,306
Additions - - 1 - - 2,231 2,232
Transfer to assets held for sale (4,851) (98,322) (306) (140) - (1,747) (105,366)
Exchange differences 124 2,542 27 167 45 1,020 3,925
At 30 June 2024 (unaudited) 1,522 68,040 1,110 8,288 2,286 17,851 99,097
Accumulated depreciation
At 1 January 2023 (2,386) (77,695) (932) (1,741) (382) - (83,134)
Scrapping of obsolete assets 32 3,651 191 424 - - 4,298
Depreciation charge for the year (331) (14,120) (185) (433) (1,422) - (16,491)
Impairment (421) (7,750) (14) - - (37) (8,222)
Exchange differences 198 4,530 73 144 42 - 4,987
At 31 December 2023 (audited) (2,908) (91,384) (867) (1,605) (1,761) (37) (98,562)
Transfer to assets held for sale 2,805 65,488 240 113 - 31 68,677
Depreciation charge for the period (162) (6,219) (91) (225) (476) - (7,173)
Impairment loss recognised in income (687) (11,630) - - - - (12,317)
Exchange differences (61) (1,362) (18) (38) (48) - (1,527)
At 30 June 2024 (unaudited) (1,013) (45,107) (736) (1,756) (2,286) (6) (50,904)
Net Book Value
At 31 December 2023 (audited) 3,341 72,436 521 6,656 480 16,310 99,744
At 30 June 2024 (unaudited) 509 22,933 374 6,532 - 17,845 48,193
*Include decommissioning asset.
Impairment Disclosure
At each reporting date, the Group reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exist, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any).
Vanchem Cash Generating Unit ("CGU")
An impairment loss of US$12.32 million was recognised for the period ended 30
June 2024 in the consolidated statement of profit or loss within loss from
discontinued operations to align the carrying value of Vanchem with the sales
price.
6. Inventories
Finished goods 14,040 12,702
Work in progress 5,286 15,566
Raw materials 761 2,510
Consumable stores 5,766 11,495
25,853 42,273
The Group recognised a net realisable value write down of finished goods
amounting to US$0.56 million (31 December 2023: US$0.84 million) and work in
progress amounting to US$0.18 million (31 December 2023: US$0.94 million).
7. Trade and other receivables
Financial instruments: 1,818 7,590
Trade receivables
Other receivables 438 525
Expected credit losses (86) (116)
Subscription receivables 12,500 13,917
Non-financial instruments:
Value-added taxes 895 2,510
Deposits 25 133
Prepaid expenses 29 459
Total trade and other receivables 15,619 25,018
Categorisation of trade and other receivables
Trade and other receivables are categorised as follows in accordance with IFRS
9: Financial Instruments:
At amortised cost 14,670 21,916
Non-financial instruments 949 3,102
15,619 25,018
Trade receivables are amounts due from customers for goods sold or services
performed in the ordinary course of business. They are generally due for
settlement within 15-90 days and therefore are all classified as current.
The fair value of trade and other receivables approximate the carrying value
due to the short maturity.
8. Cash and cash equivalents
Cash and cash equivalents consist of:
Cash at bank and in hand 1,002 1,280
Short-term deposits 26 1
1,028 1,281
Cash and cash equivalents (which are presented as a single class of assets on
the face of the statement of financial position) comprise cash at bank and
other short-term highly liquid investments with an original maturity of three
months or less.
The fair value of the cash and cash equivalents approximates the carrying
value due to the short maturity.
9. Share capital and share premium
Share premium Total share capital and
Number of Share capital premium
shares US$ '000 US$ '000 US$ '000
At 1 January 2023 1,287,818,281 17,122 127,702 144,824
Shares issued - Mustang backstop agreement 270,393,578 1,886 - 1,886
Shares issued - Acquisition of minority interest 232,836,255 2,948 3,538 6,486
Shares issued - Equity raise (net of cost) 395,897,277 4,988 9,032 14,020
At 31 December 2023 (audited) 2,186,945,391 26,944 140,272 167,216
Shares issued - Orion conversion (note 10) 124,747,016 1,583 3,133 4,716
At 30 June 2024 (unaudited) 2,311,692,407 28,527 143,405 171,932
The Board may, subject to Guernsey Law, issue shares or grant rights to
subscribe for or convert securities into shares. It may issue different
classes of shares ranking equally with existing shares. It may convert all or
any classes of shares into redeemable shares. The Company may also hold
treasury shares in accordance with the law. Dividends may be paid in
proportion to the amount paid up on each class of shares.
As at 30 June 2024 the Company owns 670,000 (31 December 2023: 670,000)
treasury shares with a nominal value of 1 pence.
Shares issued
Mustang Backstop Agreement
The Company entered into an investment agreement with Mustang whereby the
holders of the Mustang convertible loan notes ("CLN") would be able to request
the issuance of new shares if Mustang's shares had not been readmitted to
trading on the LSE by 31 July 2023.
In August 2023, each of the CLN holders had elected to redeem their CLNs and
were issued 270,393,578 new ordinary shares of one pence each in Bushveld.
Acquisition of Minority Interest
The Company acquired on 20 December 2023, the 26% minority interest in
Bushveld Vametco Holdings owned by a Black Economic Empowerment ("BEE")
consortium in return for the issue of 232,836,255 shares in the Company, cash
payment of ZAR18 million and the cancellation of a US$0.51 million loan.
Equity Raise
The Company completed an equity raise on 27 December 2023 whereby it issued
395,897,277 new ordinary shares at a price of three pence per share for gross
proceeds of US$14.97 million. The Company incurred transaction costs of
US$0.95 million of which US$0.25 million was paid.
Orion Conversion
As part of the refinancing of the convertible loan notes, US$4.72 million of
the debt obligation was settled by issuing 124,747,016 shares to Orion.
Nature and purpose of other reserves Share premium
The share premium reserve represents the amount subscribed for share capital
in excess of nominal value.
Share-based payment reserve
The share-based payment reserve represents the cumulative fair value of share
options granted to employees.
Foreign exchange translation reserve
The translation reserve comprises all foreign currency differences arising
from the translation of financial statements of foreign operations.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value
of financial assets at fair value through other comprehensive income until the
assets are derecognised or impaired and actuarial changes recognised on the
post retirement medical aid liability.
Retained income reserve
The retained income reserve represents other net gains and losses and
transactions with owners (e.g. dividends) not recognised elsewhere.
30 June 31 December
2024 2023
Unaudited US$ '000 Audited US$ '000
10. Borrowings
Orion production financing agreement ("PFA") 35,768 35,635
Orion convertible loan notes ("CLN") 14,787 46,766
Orion senior term loan 29,658 -
SPR interim working capital facility 27,807 7,812
Industrial Development Corporation ("IDC") shareholder loan 2,797 2,664
IDC property, plant and equipment loan 3,950 3,574
Other 1,664 2,124
116,431 98,575
Split between non-current and current portions
Non-current 111,268 38,008
Current 5,163 60,567
116,431 98,575
SPR interim
working capital facility
Orion Term Loan
Orion PFA Orion CLN IDC loans Other Total
US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
Balance, 1 January 2023 35,146 - 39,742 - 5,480 2,762 83,130
Cash changes:
Proceeds from borrowings - - - 7,505 942 543 8,990
Repayment of principle and interest (3,859) - - (263) - (1,375) (5,497)
Non-cash changes:
Finance costs((1)) 4,450 - 7,056 420 590 225 12,741
Fair value gain on derivative liability - - (32) - - - (32)
Remeasurement of financial liabilities - - - - (436) - (436)
Exchange differences (102) - - 150 (338) (31) (321)
Balance, 31 December 2023 (audited) 35,635 - 46,766 7,812 6,238 2,124 98,575
Cash changes:
Proceeds from borrowings - - - 18,949 76 - 19,025
Repayments of principle and interest (920) - - (488) - (535) (1,943)
Non-cash changes:
Refinancing of convertible loan notes - 28,293 (33,009) - - - (4,716)
Finance costs((2)) 2,244 1,365 1,137 768 295 66 5,875
Fair value gain on derivative liability - - (107) - - - (107)
Remeasurement of financial liabilities (1,198) - - - - - (1,198)
Exchange differences 7 - - 766 138 9 920
Balance, 30 June 2024 (unaudited) 35,768 29,658 14,787 27,807 6,747 1,664 116,431
(1)Finance costs include capitalised finance costs of US$0.59 million to
property,plant and equipment.
(2)Finance costs include capitalised finance costs of US$0.29 million to
property, plant and equipment.
Orion Mine Finance Production Financing Agreement
The Group signed a long-term production financing agreement ("PFA") of US$30
million with Orion Mine Finance ("Orion") in December 2020, primarily to
finance its expansion plans at Bushveld Vametco Alloys Proprietary Limited and
debt repayment. Exchange control authorisation from the South Africa Reserve
Bank Financial Surveillance Department was granted in October 2020.
PFA Details
The Group will repay the principal amount and pay interest via quarterly
payments determined initially as the sum of:
* a gross revenue rate (set at 1.175% for 2020 and 2021 and 1.45% from 2022
onwards, subject to adjustment based on applicable quarterly vanadium prices)
multiplied by the gross revenue for the quarter; and
* a unit rate of US$0.443/kgV (adjusted annually for inflation) multiplied by
the aggregate amount of vanadium sold for the quarter.
First Amendment
The Group entered into a first amendment to the agreement on 6 August 2021. In
terms of the amendment, US$17.8 million of the funds ringfenced for the
Vametco Phase 3 Expansion was reallocated to Vanchem mainly for capital
expenditure on Kiln-3.
The original PFA had a cap of 1,075 mtV per quarter. This amounted to 4,300
mtV per annum expected from 2024 onwards following the completion of the
Vametco Phase 3 expansion project. The amended agreement, with the addition of
the Vanchem production volumes from 1 July 2021 resulted in the initial cap of
4,300 mtV being brought forward, from 1 July 2022 instead of from 2024. As a
result of the amendment, the Group recognised a gain on the remeasurement of
the liability of US$1.2 million.
Second Amendment
The Group entered into a second amendment to the agreement on 28 June 2024. In
terms of the amendment, the quarterly repayments for 31 March 2024, 30 June
2024 and 30 September 2024 will be deferred and shall be paid in four equal
instalments in 2025.
Orion Mine Finance Convertible Loan Notes Instrument
The Company subscribed to a US$35 million convertible loan notes instrument in
December 2020 (the "Instrument") with Orion Mine Finance ("Orion"). The
Company entered into an agreement on 27 November 2023 with Orion to extend the
maturity date of the Instrument to 31 January 2024 and refinanced the
Instrument as follows:
· US$4.7 million of the convertible debt obligations were
capitalised into a subscription for 124,747,016 new ordinary shares (see note
9);
· A new convertible loan note of US$14.1 million;
· A term senior loan of US$28.3 million; and
· Supplemental royalty.
Orion Mine Finance New Convertible Loan Notes Instrument
The Group entered into a US$14.1 million new convertible loan note instrument
("the Instrument") on 31 January 2024 with the following terms:
· A fixed 12% per annum coupon and maturity date of 30 June 2028.
· All interest will accrue and be capitalised on a quarterly basis
in arrears but compounded annually.
· Accumulated capitalised and accrued interest is convertible into
Bushveld ordinary shares. All interest and principal, to the extent not
converted into ordinary shares, is due and payable at maturity date.
· Conversion price set at 3.99 pence.
· The Group has a one-time right to redeem 50% (in whole and not in
part) of the principal and interest outstanding on 30 June 2026, subject to
the right of Orion to elect instead to covert the amount.
The Instrument have been accounted for as a loan and a derivative liability as
the conversion will result in a variable amount of shares.
Amortised
costs Fair value Total
US$ '000 US$ '000 US$ '000
Inception 13,304 842 14,146
Finance costs and fair value gain 748 (107) 641
Balance, 30 June 2024 14,052 735 14,787
Orion Mine Finance Senior Term Loan
The Group entered into a US$28.3 million senior term loan ("Term Loan")
agreement on 31 January 2024 with the following terms:
· Interest rate of 6.0% ("Margin") plus the greater of (i) 3-month
Secured Overnight Financing Rate ("SOFR") and
(ii) 3.0% per annum.
· Interest payable quarterly in arrears in cash starting from the
last business day of the quarter in which the closing of the transaction
occurs and on the last business day of each quarter thereafter. In the event
that the Company has insufficient cash available to pay interest on its due
date, the interest due on that date shall continue to accrue. While there is a
continuing default, the Margin will be increased by 3%.
· Principle repayments of 25% on 30 June 2024, 30% on 30 June 2025
and the outstanding balance on 30 June
2026.
· The Term Loan may be prepaid in whole or in part at any time,
subject to early redemption fees.
· Secured against certain group companies and associated assets.
On 28 June 2024, the Group entered into a revised Term Loan agreement whereby
the Group will receive additional funding of up to US$10 million. The
repayment of interest and capital on the Term Loan was also amended whereby
the repayment of both interest and capital will only start on 31 December 2025
and will consist of equal quarterly instalments with the final payment on 31
December 2029.
The Group received the additional US$10 million funding on 20 August 2024.
Orion Mine Finance Supplemental Royalty
The Group entered into a supplemental royalty agreement on 31 January 2024
with the following terms:
· Royalty payment rate of 0.264% with a realised price per kgV of
less than US$47/kgV.
· Royalty payment rate of 0.216% with a realised price per kgV of
greater than US$47/kgV.
· The later of 30 June 2027 and when the Term Loan has been fully
repaid, the repayment rate will reduce by 80% and shall be payable for the
life of the Vametco operation.
On 28 June 2024, the Group entered into a revised Supplemental Royalty
Agreement which increased the royalty rate from 0.264% up to 0.5% depending on
the amount of the additional drawdown on terms senior loan facility and
reducing by 50% at the term loan maturity.
SPR Interim Working Capital Facility
Bushveld Vanchem ("Vanchem") entered into a loan agreement with SPR on 19
September 2023 whereby SPR borrowed ZAR150.0 million to Vanchem.
The loan bears interest, which is payable in cash every two weeks, in the
following amount:
· If the Vanadium Price is less than US$35/kgV, an amount equal to
0.54% of ZAR150,000,000;
· If the Vanadium Price is equal to or more than US$35/kgV but less
than US$40/kgV, an amount equal to 0.58% of ZAR150,000,000; and
· If the Vanadium Price is equal to or more than US$40/kgV, an
amount equal to 0.62% of ZAR150,000,000.
The loan is repayable in full on the maturity date, which is the first of:
· The date on which the lender gives a step-in notice (this is when
an event of default continues for more than 30 days); or
· The date on when the Vanchem and Mokopane Acquisition have been
fully implemented; or
· First anniversary of the advance date (22 September 2024).
The loan is secured by a Mortgage Bond of ZAR750 million over the movable
property of Vanchem and Notarial Bond of ZAR750 million over the immovable
property of Vanchem.
The Group incurred transaction costs of US$0.41 million which have been capitalised and offset against the carrying amount of the loan and are being amortised using the effective interest rate method.
The loan agreement was amended to include the receipt of US$12.5 million (ZAR237.26 million) which is non-interest bearing and repayable on the closing of the Vanchem sale.
The loan agreement with SPR was also amended to include further drawdowns of US$6.49 million (ZAR118.8 million) and the maturity date was amended by updating it to the second anniversary of the advance date (22 September 2025). The loan amount outstanding will be set-off against the Vanchem sales proceeds on closing on the transaction.
Industrial Development Corporation Shareholder Loan
Bushveld Electrolyte Company ("BELCO") is 55% owned by Bushveld Energy Company ("BEC") and 45% by the Industrial Development Corporation ("IDC"). The loan represents the IDC's contribution to BELCO and consists of the initial capitalised cost of ZAR4.38 million and the subsequent subscription amount of ZAR72.71 million. The loan is interest free, unsecured, subordinated in favour of BELCO's creditors and has no fixed term of repayment and shall only be repaid from free cash flow when available. BELCO has the unconditional right to defer settlement until it has sufficient free cash flow to settle the outstanding amount, which is estimated at the end of 2028. The loan has been classified as non-current.
The shareholder loan is measured at the present value of the future cash payments discounted using an interest rate of 8.5%, which is the estimated prevailing market rate. The difference between the fair value and the nominal amount of US$0.43 million (31 December 2022: US$1.79 million) was recognised as a capital contribution from the non-controlling interest.
A general notarial bond for a minimum amount of ZAR140 million plus an additional sum of 30% for ancillary costs and expenses was registered over all the movable assets owned by BELCO.
Industrial Development Corporation Property, Plant and Equipment Loan
The IDC provided a property, plant and equipment loan to BELCO as part of the funding for the construction of the electrolyte plant. The loan bears interest at the South African prime rate plus 2.5% margin and is repayable in 84 equal monthly instalments starting in July 2024. On 27 March 2024, the IDC amended the loan agreement by extend the repayment date to 31 December 2026 and extended the repayment terms to 100 months.
Development Bank of Southern Africa - Facility Agreement
Lemur Holdings Limited entered into a US$1.0 million facility agreement with the Development Bank of Southern Africa Limited in March 2019. The purpose of the facility is to assist with the costs associated with delivering the key milestones to the power project. The repayment is subject to the successful bankable feasibility study of the project at which point the repayment would be the facility value plus an amount equal to an Internal Rate of Return ("IRR") of 40% capped at 2.5 times, whichever is lower. As at 30 June 2024, US$1.0 million (31 December 2023: US$1.0 million) was drawn down.
The Development Bank of South Africa approved the sale of the Group's interest in the Imaloto Coal Project including their outstanding debt balance.
Nesa Investment Holdings ("Nesa")
The Group entered into a loan agreement with Nesa to fund US$0.81 million (ZAR12.08 million) bearing interest at South African prime rate plus 3.5% margin. The maturity date of the loan was extended from 30 August 2023 to 30 August 2024 and the repayments will consist of the following:
· Accrued interest up to 31 August 2023 repaid on 31 August 2023;
· ZAR2.00 million capital repayment on 21 September 2023; and
· Thereafter 10 consecutive monthly payments starting from 30 November 2023.
The Group entered into a second loan agreement with Nesa to fund US$0.54 million (ZAR10.0 million) bearing interest at South African prime rate plus 4% margin. The maturity date of the loan was extended to 31 August 2026 and the repayments will consist of the following:
· Accrued interest up to 31 October 2023 repaid on 31 October 2023;
· ZAR0.53 million capital and interest repayment on 30 November 2023; and
· Thereafter 11 consecutive quarterly payments starting from 29 February 202
30 June 31 December
2024 2023
Unaudited US$ '000 Audited US$ '000
11. Trade and other payables
Financial instruments:
Trade payables 32,036 41,784
Trade payables - related parties 11 10
Accruals and other payables 4,817 4,461
Non-financial instruments:
VAT 89 40
36,953 46,295
Financial instrument and non-financial instrument components of trade and
other payables
At amortised cost 36,864 46,255
Non-financial instruments 89 40
36,953 46,295
Trade and other payables principally comprise amounts outstanding for trade
purchases and on-going costs. The average credit period taken for trade
purchases is 90 days.
The Group has financial risk management policies in place to ensure that all
payables are paid within the pre-arranged credit terms.
The directors consider that the carrying amount of trade and other payables
approximates to their fair value.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EAENKFDKLEAARecent news on Bushveld Minerals
See all newsREG - Bushveld Minerals Ld - Appointment of Liquidators & Resignation of Nomad
AnnouncementREG - Bushveld Minerals Ld - Notice of appointment of liquidators
AnnouncementREG - FTSE Russell Bushveld Minerals Ld - Bushveld Minerals
AnnouncementREG - Bushveld Minerals Ld - Business Rescue and Operations Update
AnnouncementREG - Bushveld Minerals Ld - Resignation of Directors
Announcement