Q2 and H1 2024 Operational Update
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 cost1 (C1) for Q2 2024 of US$27.3/kgV (Q2 2023: US$27.4/kgV).
§ Weighted average production cash cost1 (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
Investors who already follow Bushveld Minerals on the Investor Meet Company platform will automatically be invited.
BUSHVELD VANADIUM
|
Group1 |
Unit |
Q2 2024 |
H1 2024 |
H1 2024 vs H1 2023 |
Q2 2024 vs Q2 2023 |
Q2 2024 vs Q1 2024 |
|
Production |
mtV2 |
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% |
|
Sales3 |
mtV2 |
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 H1 2023 |
Q2 2024 vs Q2 2023 |
Q2 2024 vs 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) |
% V2O5 |
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) |
mtV2 |
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$24.7/kgV), primarily impacted by lower production volumes and higher raw materials costs and maintenance costs.
VANCHEM
Operational highlights for Vanchem 1
|
Description |
Unit |
Q2 2024 |
H1 2024 |
H1 2024 vs H1 2023 |
Q2 2024 vs Q2 2023 |
Q2 2024 vs Q1 2024 |
|
Ore Milled |
Tonnes |
33,652 |
89,497 |
-38.2% |
-45.7% |
-39.7% |
|
Ore Grade (in Whole Rock) |
% V2O5 |
2.1% |
1.8% |
29.1% |
49.3% |
34.6% |
|
Milled ore to Kiln |
Tonnes |
34,629 |
82,977 |
-26.4% |
-27.6% |
-28.4% |
|
Milled Ore Grade |
% V |
2.0% |
1.6% |
66.0% |
112.8% |
84.1% |
|
Recovery: Kiln to Final Product |
% |
64.9% |
64.9% |
-6.4% |
-3.6% |
-0.2% |
|
Chemicals |
mtV2 |
18 |
198 |
195.2% |
-59.8% |
-90.2% |
|
Flake |
mtV2 |
194 |
360 |
162.8% |
60.0% |
16.3% |
|
FeV |
mtV2 |
79 |
231 |
-44.2% |
-58.5% |
-48.0% |
|
Total production |
mtV2 |
290 |
789 |
27.8% |
18.2% |
-41.7% |
|
Production cash cost (C1)3 |
ZAR/kgV |
312.4 |
417.1 |
-24.0% |
-38.4% |
-34.7% |
|
Production cash cost (C1)3 |
US$/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
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Bushveld Minerals Limited |
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+27 (0) 11 268 6555 |
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Craig Coltman, Chief Executive Officer |
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SP Angel Corporate Finance LLP |
Nominated Adviser & Joint Broker |
+44 (0) 20 3470 0470 |
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Richard Morrison / Charlie Bouverat |
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Grant Barker / Abigail Wayne |
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Hannam and Partners |
Joint Broker |
+44 (0) 20 7653 4000 |
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Andrew Chubb, Matt Hasson, Jay Ashfield |
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Tavistock Communications |
Financial PR |
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Gareth Tredway / Tara Vivian-Neal / James Whitaker |
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+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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