REG - Bushveld Minerals Ld - Q3 and 9M 2024 Operational Update

Bushveld MineralsAnnouncement

08/11/2024 09:30

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RNS Number : 5243L  Bushveld Minerals Limited  08 November 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.

 

08 November 2024

Bushveld Minerals Limited

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

Q3 and 9M 2024 Operational Update

 

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium
producer, is pleased to announce its operational update for the three months
("Q3") and nine months ("9M") ending 30 September 2024.

 

Group Highlights

 

·      Production for Q3 2024 of 855 mtV (Q3 2023: 1,000 mtV).

·      Production for nine months 2024 of 2,546 mtV (9M 2023: 2,784
mtV).

·      Weighted average production cash cost(1) (C1) for Q3 2024 of
US$27.5/kgV (Q3 2023: US$26.5/kgV).

·      Weighted average production cash cost(1) (C1) for 9M 2024 of
US$27.8/kgV (9M 2023: US$26.4/kgV).

·      Sales for Q3 2024 of 859 mtV (Q3 2023: 849 mtV).

·      Sales for 9M 2024 of 2,492 mtV (9M 2023: 2,945mtV).

·      Total Recordable Injury Frequency Rate ("TRIFR") for 9M 2024 of
2.41.

·      Began work on cost-cutting initiatives and development works to
return the Company to profitability and secure Bushveld's long-term future,
with the potential to achieve annualised savings of US$8m-$10m by the end of
2025.

·      Completed the disposal of Lemur Holdings ("Lemur"), resulting in
Bushveld no longer being liable for the outstanding c.US$2.5 million debt owed
to the Development Bank of South Africa ("DBSA"), for a nominal consideration
of US$100.

·      Due to liquidity issues, a controlled slowdown of production has
commenced at Vametco, the length of which will be determined by the timing of
receipt of sufficient further funds, as announced 25 October 2024.

·      All conditions relating to the sale of the Vanchem vanadium
processing plant, including Competition Tribunal approval have now been met.
The transaction was completed on Thursday, 07 November 2024. As a result,
Vanchem is no longer part of the Group.

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

·    Owing to the Company's working capital conditions, guidance has been
suspended for the remainder of 2024.

 

Craig Coltman, CEO of Bushveld Minerals Limited, commented:

 

"While Q3 reflects lower volumes and a challenging quarter overall, our
commitment to operational efficiency and long-term sustainability remains our
key focus. Bushveld has taken difficult, but necessary, steps this quarter to
stabilise our financial position, including a reduction of the current labour
complement at both Vametco and Head Office, and a controlled slowdown of
Vametco due to current liquidity issues. We also achieved meaningful progress
in rationalising our asset base during this period. We completed the disposal
of Lemur and we completed on the sale of Vanchem, allowing us to focus on
Vametco as the Company's core producing vanadium asset. Due to the Company's
cash position currently not being sufficient to fully sustain our operations
or meet immediate liabilities, we are actively engaging with various
stakeholders to explore various options to address our immediate liquidity
position. Until we are able to address our liquidity challenges, we will
continue with a controlled slowdown of production.  We will provide further
updates in due course."

 

Investor session

Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief
Financial Officer, Robbie Taylor, will host an investor session on 12
November 2024 at 13:30 GMT (15:30 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

                                                                             9M 2024 vs  Q3 2024 vs  Q3 2024 vs

 Group(1)                                     Unit     Q3 2024    9M 2024    9M 2023     Q3 2023     Q2 2024
 Production                                   mtV(2)   855        2546       -8.5%       -14.5%      2%
 Weighted average production cash cost1 (C1)  US$/KgV  27.5       27.8       5%          3.9%        1%
 Sales(3)                                     mtV(2)   859.0      2492.0     -15.4%      1.2%        13%

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                                                     9M 2024 vs  Q3 2024 vs  Q3 2024 vs

                               Unit        Q3 2024    9M 2024    9M 2023     Q3 2023     Q2 2024
 Ore mined                     Tonnes      321,615    849,796    -20.9%      -12.7%      5.3%
 Total mined (ore + waste)     Tonnes      450,437    1,071,403  -61.4%      -37.7%      23.4%
 Ore grade (in Whole Rock)     % V(2)O(5)  0.74       0.71       1.4%        8.8%        12.1%
 Concentrate produced          Tonnes      86,906     246,276    -7.6%       5.7%        -2.8%
 Concentrate grade             % V         1.00       1.03       -1.9%       -4.8%       -2.0%
 Recovery from Kiln to MVO     %           62%        62%        -7.7%       -1.5%       2.2%
 Production (Nitro Vanadium)   mtV(2)      485        1,387      -19.0%      -11.1%      -11.6%
 Production cash cost (C1)(3)  ZAR/KgV     556        587        26.6%       12.3%       -8.9%
 Production cash cost (C1)(3)  US$/KgV     30.9       32.1       27.0%       16.7%       -5.7%
 Foreign exchange rate         ZAR: USD    17.9       18.5       0.4%        -3.9%       -3.4%

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

§ Q3 2024 production of 485 mtV (Q3 2023: 545 mtV), impacted by a kiln cooler
maintenance shutdown in August. Although the plant recovered well after the
shutdown, cashflow challenges impacted overall performance.

§ 9M 2024 production of 1,387 mtV (9M 2023: 1,712 mtV), impacted by cash flow
issues which affected the availability of raw materials and spare parts.
Additionally, the plant experienced two shutdowns in 2024; one in February due
to maintenance on the kiln and the other aforementioned shutdown in August due
to maintenance on the kiln cooler.

Costs

§ Q3 2024 production cash cost (C1) of US$30.9/kgV (Q3 2023: US$26.5/kgV) (Q2
2024: US$32.8/kgV), primarily impacted by lower production, lower ZAR:US$
exchange rate, higher maintenance costs and raw material costs.

§ 9M 2024 production cash cost (C1) of US$32.1/kgV (9M 2023: US$25.3/kgV),
primarily impacted by lower production and higher maintenance costs and raw
material costs.

Outlook

·      As announced on 25 October, a controlled slowdown of production
has commenced at Vametco, the length of which will be determined by the timing
of receipt of sufficient further funds. The slowdown is progressing as planned
whilst the Company is actively engaging with all stakeholders to strengthen
its liquidity position.

 

VANCHEM

As announced 01 November 2024, all conditions relating to the sale of the
Vanchem vanadium processing plant, including Competition Tribunal approval,
have been met. Final agreements were entered into on 31 October 2024 and the
transaction was completed on Thursday, 07 November 2024. As a result, Vanchem
is no longer part of the Group.

 

Operational highlights for Vanchem (1)

 

 Description                      Unit        Q3 2024   9M 2024  9M 2024 vs  Q3 2024 vs  Q3 2024 vs

                                                                 9M 2023     Q32 2023    Q2 2024
 Ore Milled                       Tonnes      49,575    129,057  -43.2%      -39.8%      47.3%
 Ore Grade (in Whole Rock)        % V(2)O(5)  1.9%      2.0%     -98.6%      46.7%       -6.0%
 Milled ore to Kiln               Tonnes      49,019    134,804  -21.1%      -15.7%      41.6%
 Milled Ore Grade                 % V         2.0%      2.0%     104.0%      98.7%       -3.8%
 Recovery: Kiln to Final Product  %           67.1%     66.2%    9.2%        3.1%        3.5%
 Chemicals                        mtV(2)      69        234      49.0%       -22.9%      292.6%
 Flake                            mtV(2)      236       629      210.1%      257.8%      22.0%
 FeV                              mtV(2)      65        296      -58.5%      -78.3%      -17.8%
 Total production                 mtV(2)      370       1,159    8.1%        -18.6%      27.6%
 Production cash cost (C1)(3)     ZAR/kgV     415.1     416.4    -19.8%      -15.7%      32.9%
 Production cash cost (C1)(3)     US$/kgV     23.1      22.5     -20.4%      -12.5%      37.4%
 Foreign exchange                 ZAR: USD    17.9      18.5     0.4%        -3.9%       -3.3%

 

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 2024 production of 370 mtV (Q3 2023: 455 mtV), impacted by issues with
the kiln which followed on from the earlier maintenance work in May.

§ 9M 2024 production of 1,159 mtV (9M 2023: 1,072 mtV), impacted by cashflow
challenges which affected the availability of raw materials and spares, in
addition to the aforementioned issues with the kiln. The plant also
experienced issues with the mills following the May shutdown, impacting
performance between June and July.

 

Costs

§ Q3 2024 production cash cost (C1) of US$23.1/kgV (Q3 2023: US$26.4/kgV) (Q2
2024: US$16.8), primarily due to costs allocated to idle plant costs and cost
saving initiatives, partially offset by lower production

§ 9M 2024 production cash cost (C1) of US$22.5/kgV (9M 2023: US$26.4/kgV),
primarily due to higher production, costs allocated to idle plant costs and
cost saving initiatives.

 

LEMUR

As announced, 18 October 2024, the Company completed the disposal of Lemur,
resulting in Bushveld no longer being liable for the outstanding c.US$2.5
million debt owed to the DBSA, for a nominal consideration of US$100.

 

SECTION 189

As previously announced on 10 September 2024, the Company is pursuing a
multi-pronged approach to reducing costs and to ultimately maintain Vametco's
production, including reducing the current labour complement at both Vametco
and Head Office to ensure a fit-for-purpose structure enabling the
long-term sustainability of Bushveld Minerals. In line with the Section 189
process under the Labour Relations Act, 1995, notices were issued to impacted
employees at Vametco and Head Office. This process is currently in progress.

 

WORKING CAPITAL SITUATION

The Company's funds at hand are currently not sufficient to sustain the
Company's operations and meet its immediate liabilities, and the Company is
actively engaging with various stakeholders to explore options to address its
liquidity position. Further updates will be provided in due course.

 

HEALTH AND SAFETY

§ Q3 2024 TRIFR of 1.10 (Q3 2023: 0).

§ 9M 2024 TRIFR of 2.41 (9M 2023: 1.26), a decline vs 2023. This was due to
five low potential medical treatment cases that did not result lost time.

 

 

VANADIUM PRICE AND OUTLOOK

§ Q3 2024 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$28.4/kgV,
showing a slight deterioration from US$28.6/kgV achieved in Q2 2024.
Unfortunately, both London Metal Bulletin ("LMB") (Europe) and Asian Metals
("AM") (Asia) continued their decline in Q3 2024, averaging US$26.0/kgV and
US$21.2/kgV respectively, when compared to the Q2 2024 average of US$26.8/kgV
and US$21.9/kgV, respectively.

 

§ Sales into the higher value markets, aerospace applications, 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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