REG - Bushveld Minerals Ld - Q3 2023 and 9M 2023 Operational Update
06/11/2023 07:00
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RNS Number : 4146S Bushveld Minerals Limited 06 November 2023
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.
6 November 2023
Bushveld Minerals Limited
("Bushveld Minerals", "Bushveld" or the "Company")
Q3 2023 and 9M 2023 Operational Update
Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium
producer and energy storage solutions provider, is pleased to announce its
operational update for the 3 months and 9 months ending 30 September 2023.
Group highlights
Q3 2023
§ Production of 1,000 mtV (Q2 2023: 840 mtV) (Q3 2022: 1,016 mtV).
§ Weighted average production cash cost(1) (C1) of US$26.5/kgV (Q2 2023:
US$27.4/kgV) (Q3 2022: US$29.3/kgV).
§ Sales of 849 mtV (Q2 2023: 1,068 mtV) (Q3 2022: 1,034 mtV).
9M 2023
§ Production of 2,784 mtV (9M 2022: 2,657 mtV).
§ Weighted average production cash cost(1) (C1) of US$26.4/kgV (9M 2022:
US$28.9/kgV).
§ Sales of 2,945 mtV (9M 2022: 2,678 mtV).
§ Total Recordable Injury Frequency Rate ("TRIFR") of 5.69 (9M 2022:10.25).
1. Weighted average production cash cost (C1) is the blended weighted
average production cash cost (C1) of Vametco and Vanchem, divided by group
production.
2023 Group guidance
§ On track to meet Group production guidance for 2023 of between 3,700 mtV
and 3,900 mtV.
- Vametco production expected to be c.200 mtV per month for the
remainder of the year.
- Vanchem production expected to c.150 mtV in November and c.180 mtV
in December.
§ October 2023 Group production of 387 mtV (Vametco: 209 mtV) (Vanchem: 178
mtV).
§ On track to meet Group weighted average production cash cost (C1) guidance
of between US$26.6/kgV and US$26.9/kgV, (ZAR481/kgV and ZAR487/kgV).
Corporate update
§ On 11 September 2023, the Company announced a Binding Term Sheet with
Southern Point Resources for a cumulative proposed investment of between
US$69.5 - US$77.5 million. Bushveld has since received the ZAR150 million
(~US$8.1 million) interim working capital funds as part of the transaction.
The Company is in process of completing the other aspects of the overall
transaction.
§ The Company is progressing the various workstreams to complete the Orion
convertible loan note restructuring before the 21 December 2023 due date.
§ Post period end, the Company announced the agreement to acquire the 26%
minority interest in Bushveld Vametco Holdings, the transaction is value
accretive to shareholders.
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
"I am pleased to report the first set of quarterly production numbers under my
stewardship. They are a solid set of results for the quarter ending 30
September 2023. What is immediately clear from the highlighted numbers is a
strong improvement in production of 19% from Q2 2023, which has translated
into some solid improvements on the cost front. This gives us confidence that
we have made the right decisions, especially at Vanchem, with the
implementation of the various initiatives, and the goal now is to ensure that
things stabilise and even improve further from here.
We have made progress both in respect of the Southern Point transaction and
the refinancing of the Orion convertible loan note. Completion of these
transactions will steady the ship and ensure Bushveld is a sustainable
business for the long term."
Conference call
Bushveld Minerals Chief Executive Officer, Craig Coltman and Finance Director,
Tanya Chikanza, will host a conference call at 2:30 pm UK time (4:30 pm SAST)
today to discuss the quarterly update with analysts and investors.
Participants may join the call by dialling:
Tel: United Kingdom: +44 (0) 330 551 0200; South Africa: Toll Free: 0 800
980 512, USA Local: +1 786 697 3501
Password: Quote Bushveld Minerals when prompted by the operator.
A replay of the conference call will be available on the Company's website
post the call.
BUSHVELD VANADIUM
9M 2023 vs Q3 2023 vs Q3 2023 vs
Group(1) Unit Q3 2023 9M 2023 9M 2022 Q3 2022 Q2 2023
Production mtV(2) 1,000 2,784 4.8% -1.6% 19.0%
Weighted average production cash cost1 (C1) US$/KgV 26.5 26.44 -8.5% -9.6% -3.3%
Sales(3) mtV(2) 849 2,945 10.0% -17.9% -20.5%
1. Based on provisional, unaudited figures.
2. mtV = metric tonnes of vanadium.
3. Reported as final sales to customers.
VAMETCO
Operational highlights for Vametco (on a 100% basis)(1)
Description Unit Q3 2023 9M 2023 9M 2023 vs Q3 2023 vs Q3 2023 vs
9M 2022 Q3 2022 Q2 2023
Ore mined Tonnes 368 556 1 074 113 -8.6% -14.4% -0.2%
Total mined (ore + waste) Tonnes 723 316 2 778 173 -7.4% -45.5% -4.6%
Ore grade (in Whole Rock) % V(2)O(5) 0.68 0.70 -18.6% -29.2% -2.9%
Concentrate produced Tonnes 82 182 266 440 -8.4% -22.5% -18.7%
Concentrate grade % V 1.05 1.05 1.0% 1.9% 0%
Recovery from Kiln to MVO % 63.3 66.7 -8.5% -10.0% 0.5%
Production (Nitro Vanadium) mtV(2) 545 1 712 -9.5% -18.2% 12.4%
Production cash cost (C1)(3) ZAR/KgV 494.6 464.1 17.4% 8.1% -3.7%
Production cash cost (C1)(3) US$/KgV 26.5 25.3 2.0% -1.5% -3.6%
Foreign exchange rate ZAR: USD 18.7 18.4 15.7% 10.0% 0.0%
1. Based on provisional, unaudited figures. Bushveld's net
attributable interest of the above figures is approximately 74%. Production
cash cost is based on vanadium produced.
2. mtV = metric tonnes of vanadium.
3. Excludes depreciation, royalties and selling, general &
administrative expenses. Production cash cost is based on vanadium produced.
Production cash cost (C1) measure does not have any standardized meaning
prescribed by IFRS and differs from measures determined in accordance with
IFRS. This measure is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. This measure is not necessarily indicative
of net earnings or cash flow from operating activities as determined under
IFRS.
Production
§ Q3 2023 production of 545 mtV (Q2 2023: 485 mtV), (Q3 2022: 666 mtV),
impacted by constraints at the barren dam and Sulphate Recovery Plant (SRP)
and reliability challenges at the leach plant.
- 136 mtV, 215 mtV and 194mtV produced in July, August and September
2023 respectively.
§ The challenges experienced at the leach plant have been resolved and
production is back to normal.
§ The work on the SRP/barren dam is progressing to plan and performance is
showing improvement. This section is currently not a bottleneck in achieving
around 200mtv, however, it is very sensitive on the impact of heavy rainfall.
§ 9M 2023 production of 1,712 mtV (9M 2022: 1,892 mtV), with production
impacted by the aforementioned reasons.
§ The previously announced 10-days planned maintenance shutdown was completed
during Q3 2023, and no further planned shutdowns are expected for the rest of
the year.
Costs
§ Q3 2023 production cash cost (C1) of US$26.5/kgV (Q2 2023: US$27.5/kgV),
(Q3 2022: US$26.9/kgV), supported by higher production volumes in Q3 2023
compared to Q2 2023 and to a weaker ZAR:USD exchange rate in Q3 2023 compared
to Q3 2022.
§ 9M 2023 production cash cost (C1) of US$25.3/kgV (9M 2022: US$24.8/kgV),
mainly due to lower production volumes and partially offset by a weaker
ZAR:USD exchange rate.
Guidance
§ Guidance range remains unchanged of between 2,300 mtV and 2,400 mtV.
§ Production cash cost (C1) guidance has been maintained of between
US$25.6/kgV and US$25.9/kgV (ZAR463/kgV and ZAR469/kgV).
VANCHEM
Operational highlights for Vanchem(1)
Description Unit Q3 2023 9M 2023 9M2023 vs Q3 2023 vs Q3 2023 vs
9M 2022 Q3 2022 Q2 2023
Ore Milled Tonnes 82 403 227 125 34.5% 19.0% 33.1%
Ore Grade (in Whole Rock) % V(2)O(5) 1.32 1.37 3.0% -6.4% -4.3%
Milled ore to Kiln Tonnes 58 166 170 838 37.7% 13.8% 21.6%
Milled Ore Grade % V 0.99 0.97 3.2% 6.5% 3.1%
Recovery: Kiln to Final Product % 65.1 60.6 -1.7% -6.9% 1.6%
Chemicals mtV(2) 90 157 14.6% 246.2% 104.5%
Flake mtV(2) 66 203 167.1% -4.3% -45.5%
FeV mtV(2) 299 713 29.2% 17.3% 57.4%
Total production mtV(2) 455 1072 40.1% 30.0% 28.2%
Production cash cost (C1)(3) ZAR/kgV 492.4 519.4 -16.7% -14.4% -2.9%
Production cash cost (C1)(3) US$/kgV 26.4 28.3 -27.6% -21.9% -2.9%
Foreign exchange ZAR: USD 18.7 18.4 15.7% 10.0% 0.0%
1. Based on provisional, unaudited figures.
2. mtV = metric tonnes of vanadium.
3. Excludes depreciation, royalties and selling, general &
administrative expenses. Production cash cost is based on vanadium produced.
Production cash cost (C1) measure does not have any standardized meaning
prescribed by IFRS and differs from measures determined in accordance with
IFRS. This measure is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. This measure is not necessarily indicative
of net earnings or cash flow from operating activities as determined under
IFRS.
Production
§ Q3 2023 production of 455 mtV (Q2 2023: 355 mtV), (Q3 2022: 350 mtV).
Production increase supported by improved operational performance underpinned
by the Vanchem turn around project, partly offset by unplanned stoppages.
- 160 mtV, 175mtV and 120 mtV produced in July, August and September
2023 respectively.
§ September 2023 production was 120 mtV, due to a 9 day shutdown to repair
the refractory. The shutdown was successful and at the back of this Vanchem
will not require to conduct the previously announced 25-day maintenance in Q4
2023.
§ 9M 2023 production of 1,072 mtV (9M 2022: 765 mtV), underpinned by improved
operational performance.
Costs
§ Q3 2023 production cash cost (C1) of US$26.4/kgV (Q2 2023: US$27.2/kgV) (Q3
2022: US$33.8/kgV), supported by higher production volumes in Q3 2023 compared
to Q2 2023, a weaker ZAR:USD exchange rate and higher production volumes in Q3
2023 compared to Q3 2022.
§ 9M 2023 production cash cost (C1) of 28.3/kgV (9M 2022: US$39.1/kgV)
supported by a weaker ZAR:USD exchange rate and higher production volumes.
Guidance
§ Production guidance range has been maintained at between 1,400 mtV and
1,500 mtV.
§ The planned 25-day maintenance for the year is no longer required by virtue
of a 9 and 4 day shutdown in September and November respectively.
- 178 mtV produced in October 2023. Production is expected to be
around 150 mtV in November (due to the 4 day shutdown) and 180 mtV in
December.
§ Production cash cost (C1) guidance range has been maintained to between
US$28.1/kgV and US$28.5/kgV (ZAR509/kgV and ZAR516kgV).
BELCO
The hot commissioning phase was completed in July and construction completed
in August. An initial batch of electrolyte was produced to fulfil a small
order and produce samples. These samples are now being distributed among
international customers in an effort to qualify BELCO and its electrolyte with
battery companies. This qualification step is essential prior to issuance of
orders. It is expected to take a few months.
VAMETCO HYBRID MINI-GRID
The construction of the 3.5 MW solar PV plant was completed during the period.
The plant was first energised at the end of September. The plant and all its
components are now undergoing site acceptance and grid compliance testing. The
plant will generate approximately 10% of Vametco's electricity requirements.
HEALTHY AND SAFETY
Q3 2023 TRIFR of 4.94 (Q3 2023: 12.01), 9M 2023 TRIFR at 5.69 (9M 2022:
10.25), supported by improved reporting of leading indicators analysed for
learning and improvement opportunities.
VANADIUM MARKET
§ Q3 2023 sales of 849 mtV (Q2 2023: 1,068 mtV), below previous quarter due
to inventory in the logistics pipeline at quarter end.
§ Sales into the higher value markets (aerospace application, speciality
alloy and chemicals) and higher price markets (Nitro Vanadium in North
America) continue to be prioritised.
§ Demand for our entire range of products remains strong and we expect sales
volume to be in line with production volumes for the rest of 2023.
§ Q3 2023: CRU Ryan's Notes Ferrovanadium prices averaged US$36.0/kgV. London
Metal Bulletin and Asian Metals averaged US$31.5/kgV and US$31.0/kgV
respectively.
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 & Broker +44 (0) 20 3470 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
RBC Capital Markets Joint Broker +44 (0) 20 7653 4000
Jamil Miah / Sahil Suleman
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ James Whitaker +44 (0) 207 920 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, vertically integrated primary vanadium
producer, it is one of only three operating primary vanadium producers. In
2022, the Company produced more than 3,800 mtV, representing approximately
three per cent of the global vanadium market. With a diversified vanadium
product portfolio serving the needs of the steel, energy and chemical sectors,
the Company participates in the entire vanadium value chain through its two
main pillars: Bushveld Vanadium, which mines and processes vanadium ore; and
Bushveld Energy, an energy storage solutions provider.
Bushveld Energy is focused on developing and promoting the role of vanadium in
the growing global energy storage market through the advancement of
vanadium-based energy storage systems, specifically Vanadium Redox Flow
Batteries ("VRFBs").
Detailed information on the Company and progress to date can be accessed on
the website www.bushveldminerals.com (http://www.bushveldminerals.com)
About Vametco
Vametco is located near Brits on the Western Limb of the Bushveld Complex.
The integrated operation comprises a vanadium ore mine and a processing plant
that produces mostly Nitro Vanadium. The mine lies adjacent to the Brits
Vanadium Project, which will in future serve as an alternative source of near
surface run of mine ("ROM") ore feed to the Vametco plant.
The Vametco mining operation uses open pit bench mining methods to mine a
well-defined orebody. The deposit is continuous with limited faulting and dips
in a northerly direction at approximately 19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing circuit,
followed by milling and magnetic separation to produce magnetite concentrates.
The magnetite concentrate is fed into the extraction process which consists of
a rotary kiln for roasting followed by leaching and precipitation. Thereafter
the precipitated vanadium as ammonium metavanadate is converted to modified
vanadium oxide ("MVO") in a rotary calciner. MVO is fed into the mix plant and
finally into the shaft furnaces to produce Nitro Vanadium.
About Vanchem
Vanchem is situated at Ferrobank Industrial Park in Emalahleni Local
Municipality, Mpumalanga Province in the Republic of South Africa. Vanchem
is a primary vanadium producing facility with a beneficiation plant capable of
producing various vanadium oxides, ferrovanadium and vanadium chemicals.
Vanchem uses the salt roast beneficiation process, similar to the one used at
Vametco. The plant comprises: a core salt-roast processing plant, including 3
roasting kilns, an electric smelting ferrovanadium converter, an
alumino-thermic smelting facility, also located at Highveld, a vanadium
chemical plant; and a rail siding linking the plant with Bushveld deposits and
additional potential supply sources through the national rail network.
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