REG - Bushveld Minerals Ld - Q2 and H1 2024 Operational Update

Bushveld MineralsAnnouncement

31/07/2024 07:00

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RNS Number : 4677Y  Bushveld Minerals Limited  31 July 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.

 

31 July 2024

Bushveld Minerals Limited

("Bushveld Minerals", "Bushveld" or the "Company")

Q2 and H1 2024 Operational Update

 

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium
producer, is pleased to announce its operational update for the three months
and six months ending 30 June 2024.

 

Group Highlights

 

§ Total Recordable Injury Frequency Rate ("TRIFR") for H1 2024 of 1.30 (H1
2023: 3.39).

§ Production for Q2 2024 of 838 mtV (Q2 2023: 840 mtV).

§ Production for H1 2024 of 1,693 mtV (H1 2023: 1,784 mtV).

§ Weighted average production cash cost(1) (C1) for Q2 2024 of US$27.3/kgV
(Q2 2023: US$27.4/kgV).

§ Weighted average production cash cost(1) (C1) for H1 2024 of US$27.9/kgV
(H1 2023: US$26.6/kgV).

§ Sales for Q2 2024 of 759 mtV (Q2 2023: 1,068 mtV).

§ Sales for H1 2024 of 1,639 mtV (H1 2023: 2,096 mtV).

§ Sale of Vanchem underway, awaiting Competition Commission approval,
expected by the end of October 2024.

§ The Company entered into revised agreements with OMF Fund III (F) Limited
("Orion"), pursuant to which Orion agreed to provide further funding on a $
for $ basis up to a maximum of US$10 million by matching additional funds paid
by Southern Point Resources Fund I S.A. LP ("SPR").

§ In discussions with Joint Venture ("JV") partner for the transfer of
liabilities from Bushveld Electrolyte Company ("BELCO") and removal of
guarantee provided by Bushveld for a total amount of ZAR28.75 million
(c.US$1.5 million).

§ Received approval from the Development Bank of South Africa to dispose of
Lemur Holdings Limited ("Lemur"), including its c.US$2.5 million debt. The
disposal remains subject to certain outstanding conditions being met.

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

·      Group production guidance for 2024 of 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.

·      Weighted average production cash cost (C1) for the Group of
US$26.7 and US$27.1, based on total Group production of between 3,800mtV and
4,000 mtV.

 

Craig Coltman, CEO of Bushveld Minerals Limited, commented:

 

I'm pleased that we could continue to rationalise assets in this period, as
well as progress on the turnaround work at Vametco, now our core asset.

Despite a slight drop in production due to equipment failure owing to cash
constraints at Vametco earlier in the year and a planned shutdown at Vanchem,
we maintained steady overall production levels.

I'm delighted to report that the team at Vametco is pushing through a
turnaround plan, and in May, achieved 217mtV, the highest monthly production
since I joined a year ago. These initial efforts, and a number of other
initiatives identified at Vametco, will be executed in the second half of this
financial year, putting us on track to achieve our overall target of 240mtV
monthly sustainable production at Vametco by Q4 2024.

Vanchem's normalised costs were lower during this period, primarily due to
costs allocated to the idle plant cost during the planned maintenance shutdown
in May and cost savings initiatives, while Vametco's costs are expected to
reduce during the second half of the year.

Furthermore, our TRIFR has significantly improved, and we remain committed to
working towards simple, fast and effective operations, and continue
progressing our improvement measures.

 

Investor session

Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief
Financial Officer, Robbie Taylor, will host an investor session on Monday 5
August 2024 at 12:00pm BST (13:00pm 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.

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

                                                                             H1 2024 vs  Q2 2024 vs  Q2 2024 vs

 Group(1)                                     Unit     Q2 2024    H1 2024    H1 2023     Q2 2023     Q1 2024
 Production                                   mtV(2)   838        1,693      -5.1%       -0.2%       -2%
 Weighted average production cash cost1 (C1)  US$/KgV  27.3       27.9       4.9%        -0.4%       -3.9%
 Sales(3)                                     mtV(2)   759        1,639      -21.8%      -28.9%      -13.8%

1.     Based on provisional, unaudited figures.

2.     mtV = metric tonnes of vanadium.

3.     Reported as final sales to customers.

 

 

 

VAMETCO

Operational highlights for Vametco (1)

 Description                   Unit        Q2 2024   H1 2024  H1 2024 vs  Q2 2024 vs  Q2 2024 vs

                                                              H1 2023     Q2 2023     Q1 2024
 Ore mined                     Tonnes      305,515   528,181  -25.1%      -17.3%      37.2%
 Total mined (ore + waste)     Tonnes      365,015   620,966  -69.8%      -51.8%      42.6%
 Ore grade (in Whole Rock)     % V(2)O(5)  0.66      0.71     1.4%        -5.7%       -13.2%
 Concentrate produced          Tonnes      89,401    159,370  -13.5%      -11.6%      27.8%
 Concentrate grade             % V         1.02      1.04     -1.0%       -2.9%       -3.8%
 Recovery from Kiln to MVO     %           61.0%     64.5%    -5.6%       -3.2%       -10.3%
 Production (Nitro Vanadium)   mtV(2)      548       905      -22.5%      12.9%       53.4%
 Production cash cost (C1)(3)  ZAR/KgV     610.0     613.8    36.4%       18.8%       -1.6%
 Production cash cost (C1)(3)  US$/KgV     32.8      32.8     32.6%       19.4%       0.1%
 Foreign exchange rate         ZAR: USD    18.6      18.7     2.9%        -0.6%       -1.7%

1.     Based on provisional, unaudited figures. 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 standardised 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

§ Q2 2024 production of 548mtV (Q2 2023: 485 mtV).

§ H1 2024 production of 905 mtV (H1 2023: 1,167 mtV), impacted by the planned
25-day Kiln maintenance shutdown during the months of January and February and
further production losses in March due to equipment failure owing to cash
constraints.

 

Costs

§ Q2 2024 production cash cost (C1) of US$32.8/kgV (Q2 2023: US$27.5/kgV) (Q1
2024: US$32.8/kgV), primarily impacted by higher raw materials costs and
maintenance costs.

§ H1 2024 production cash cost (C1) of US$32.8/kgV (H1 2023: US$24.7/kgV),
primarily impacted by lower production volumes and higher raw materials costs
and maintenance costs.

 

VANCHEM

Operational highlights for Vanchem (1)

 

 Description                      Unit        Q2 2024   H1 2024  H1 2024 vs  Q2 2024 vs  Q2 2024 vs

                                                                 H1 2023     Q2 2023     Q1 2024
 Ore Milled                       Tonnes      33,652    89,497   -38.2%      -45.7%      -39.7%
 Ore Grade (in Whole Rock)        % V(2)O(5)  2.1%      1.8%     29.1%       49.3%       34.6%
 Milled ore to Kiln               Tonnes      34,629    82,977   -26.4%      -27.6%      -28.4%
 Milled Ore Grade                 % V         2.0%      1.6%     66.0%       112.8%      84.1%
 Recovery: Kiln to Final Product  %           64.9%     64.9%    -6.4%       -3.6%       -0.2%
 Chemicals                        mtV(2)      18        198      195.2%      -59.8%      -90.2%
 Flake                            mtV(2)      194       360      162.8%      60.0%       16.3%
 FeV                              mtV(2)      79        231      -44.2%      -58.5%      -48.0%
 Total production                 mtV(2)      290       789      27.8%       18.2%       -41.7%
 Production cash cost (C1)(3)     ZAR/kgV     312.4     417.1    -24.0%      -38.4%      -34.7%
 Production cash cost (C1)(3)     US$/kgV     16.8      22.3     -26.0%      -38.2%      -33.5%
 Foreign exchange                 ZAR: USD    18.6      18.7     2.9%        -0.6%       -1.7%

 

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

§ Q2 2024 production of 290 mtV (Q2 2023: 355 mtV) mostly due to a planned
maintenance shutdown in May, and extended maintenance work required on mill
after the planned shutdown in June.

§ H1 2024 production of 789 mtV (H1 2023: 617 mtV).

 

Costs

§ Q2 2024 production cash cost (C1) of US$16.8/kgV (Q2 2023: US$27.2/kgV)
primarily due to costs allocated to the idle plant cost during the planned
maintenance shutdown in May and cost savings initiatives, partially offset by
lower production volumes.

§ H1 2024 production cash cost (C1) of US$22.3/kgV (H1 2022: US$30.1/kgV),
primarily supported by higher production volumes, cost savings initiatives and
costs allocated to idle plant cost during the planned maintenance shutdown in
May.

 

VANCHEM DISPOSAL

Having received shareholder approval for the disposal of the Vanchem asset,
the Company is continuing with the sale process, which is conditional upon
Competition Tribunal approval expected by the end of October 2024.

 

BELCO AND BUSHVELD ENERGY

While the Company continues the strategic process on its remaining 6% stake in
CellCube, it is also in discussions with its JV partner, Industrial
Development Corporation ("IDC"), to transfer ownership of the BELCO
electrolyte asset for a notional amount including the total liabilities of
BELCO and guarantee provided by Bushveld totalling ZAR28.75 million (c.US$1.5
million). However, shareholders should note that there can be no certainty
regarding the timing or terms of a definitive agreement being reached with
IDC.

 

LEMUR

The Company has received approval from the Development Bank of South Africa
and will proceed with the agreement to dispose of Lemur for a notional amount
as well as the outstanding c.US$2.5 million debt on the asset. The disposal
remains subject to certain outstanding conditions being met.

 

ORION MATCHED FUNDING FACILITY

As announced on 28 June 2024, the Company entered into revised agreements with
Orion, pursuant to which Orion agreed to provide further funding on a $ for $
basis up to a maximum of US$10 million by matching additional funds paid by
SPR. The first repayment of the Orion term loan was deferred from 30 June 2024
until 31 December 2025. Repayments (principal and interest) are to be made in
16 equal quarterly amounts thereafter.

 

 

HEALTH AND SAFETY

§ Q2 2024 TRIFR of 2.78 (Q2 2023: 7.58).

§ H1 2024 TRIFR of 1.30 (H1 2023: 3.39) an improvement of over 60% attributed
to the implementation of the Safety Diagnostic Audit conducted, and an
emphasis on leading indicators which led to a reduction of safety incidents.

 

VANADIUM PRICE AND OUTLOOK

§ Q2 2024 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$28.6/kgV,
showing a slight improvement from US$28.4/kgV achieved in Q1 2024.
Unfortunately, both London Metal Bulletin ("LMB") (Europe) and Asian Metals
("AM") (Asia) declined in Q2 2024, averaging US$26.8/kgV and US$21.9/kgV
respectively, when compared to the Q1 2024 average of US$27.9/kgV and
US$24.8/kgV, 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

 SP Angel Corporate Finance LLP                       Nominated Adviser & Joint Broker      +44 (0) 20 3470 0470
 Richard Morrison / Charlie Bouverat
 Grant Barker / Abigail Wayne

 Hannam and Partners                                  Joint Broker                          +44 (0) 20 7653 4000
 Andrew Chubb, Matt Hasson, Jay Ashfield

 Tavistock Communications                             Financial PR
 Gareth Tredway / Tara Vivian-Neal / James Whitaker                                         +44 (0) 207 920 3150

 

 

 

 

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

 

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