TIDMBMN
RNS Number : 7984P
Bushveld Minerals Limited
22 June 2022
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.
22 June 2022
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Delivering Sustainable Growth - Key Findings of Vametco and
Vanchem Studies to Achieve 8,000 mtVp.a.
Bushveld Minerals Limited (AIM: BMN), the AIM quoted integrated
primary vanadium producer and energy storage solutions provider, is
pleased to provide a summary of the key findings of the feasibility
and pre-feasibility studies (the "Studies") by METC South Africa
Pty (Ltd) and MSA Group (Pty) Ltd to assess the optimal path
forward to grow production at Vametco and Vanchem to 8,000 mtVp.a
.
The Studies were undertaken to determine the next phase of the
Company's growth plans beyond the sustainable production run rate
of between 5,000-5,400 mtVp.a., which is expected to be achieved by
the end of 2022.
Highlights of the Growth Studies
- The studies highlight a significant opportunity to increase
production by c.50% to 8,000mtVp.a. through the Company's existing
operations.
- Requires growth capital expenditure of US$151 million (ZAR2.3 billion)(1)
- Optimal staged expansion plan (based on highest to lowest IRR and NPV):
o Stage 1 - Vametco - Installation of a Semi-autogenous (SAG)
Mill to establish a permanent and reliable supply of feedstock for
both plants in advance of further capacity expansion.
Stage 1 establishes a sustainable and reliable supply of
concentrate feedstock (up to 6,800 mtV) for both plants in advance
of further capacity expansion with the balance of ore, when
required, being supplied through development of Mokopane, Brits or
third party ore. The SAG Mill investment at Vametco will provide
concentrate to enable Vanchem growth, whilst intermediate products
(AMV, MVO) can also be shared between the plants.
o Stage 2 - Vanchem - Refurbishment of Kiln 2 to increase
production at Vanchem to between 3,600 - 3,700 mtVp.a.
(corresponding increase in Group production to between 6,000 -
6,500 mtVp.a.).
o Stage 3 - Vanchem - Refurbishment of Kiln 1 to increase
production to between 4,600 - 4,700 mtVp.a. (corresponding increase
in Group production to between 7,000 - 7,500 mtVp.a.).
o Stage 4 - Vametco - Increase single kiln capacity to 3,400
mtVp.a. (corresponding increase in Group production to between
7,600 - 8,000 mtVp.a.).
- The option to implement the expansion in stages substantially
reduces Bushveld's upfront capital requirements and allows
incremental production to be attained from each stage in order to
generate additional cash flows, which can be leveraged for the next
stage.
(1) Based on a R15.29 USD:ZAR exchange rate.
- The product diversification and the flexibility arising from
the expansion allows for maximum market penetration.
- Management intent to pursue the staged expansion plans, subject to:
o The meeting of short-term performance targets to deliver
sustainable cash generating production at the production rate of
5,000 - 5,400 mtVp.a.; and
o In a phased manner, with sufficient funding secured,
accompanied by any necessary third-party validation of associated
project economics.
- As a result of higher volumes and operational efficiencies,
the Company has estimated that at full operational production of
8,000 mtVp.a., C1 costs per Kg/V produced at Vametco and Vanchem
would fall by at least 20% at each operation, compared to 2021.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"Bushveld's brownfield growth strategy was predicated on the
significant barriers to entry posed by the high capital intensity
for development of greenfield primary vanadium production capacity
in a world with only four operational primary vanadium processing
plants. In acquiring the two plants, Vametco and Vanchem, the
company was mindful that significant capital expenditure would be
required to unlock the full production and cost potential. The
Company was also of the view that a combination of the acquisition
and refurbishment costs would cost much less and transition the
Company into a producer in much shorter time than it would with a
greenfield operation. What's more, the Company could leverage
cashflows to fund and source additional capital to implement this
strategy.
In this context, I am pleased to share the results of the
feasibility studies for the growth path to 8,000 mtVp.a., which
allows our assets to reach their full potential unlocking
significant value for shareholders.
"Thus, whilst our commitment to growth remains, we have the
liberty to pursue the new growth plans only once we have achieved
our production performance targets on delivering sustainable cash
generating production at the production rate of 5,000 - 5,400
mtVp.a. and improved our balance sheet capacity to invest in such
when funding has been secured.
"Furthermore, the studies, puts us in a position to rapidly
respond to growing vanadium demand. Growth in demand for Vanadium
is supported by rising intensity of use within
high-strength-low-alloy-steel, as well as the significant upside
potential for vanadium redox flow batteries given the increasing
requirement for energy storage applications for renewable energy
sources."
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
RBC Capital Markets +44 (0) 20 7653
Jonathan Hardy / Caitlin Leopold Joint Broker 4000
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ +44 (0) 207 920
Adam Baynes 3150
Bushveld Minerals
Summary report of the studies conducted to achieve 8,000 mtVp.a.
as a full growth option between Vametco and Vanchem
Workstream description Study outcomes
-------------- --------- ---------------------------- ---------------------------------
Supply of Life Assess the impact Whilst a 20-year Life
Ore of Mine on the mine plan of Mine pit-shell was
to supply ore for modelled to ensure optimal
concentrate production waste placement, the Vametco
to both operations resource base is sufficient
for a life of mine in
excess of 30 years. Further
optimization is possible
through following a disciplined
backfilling strategy.
--------- ---------------------------- ---------------------------------
Capacity Vametco Design of a Semi-autogenous Phase 1 SAG Mill development
growth ( SAG) mill, upgrades to supply concentrate
to the balance of feed to 2 Kilns at Vanchem
plant at the concentrate to cost approximately
section. US$32.9 million, taking
up to 24 months, with
Leach retention time Eskom upgrades on the
improvements, new critical path.
Salt Recovery Plant
(SRP) and boilers, Phase 4 increase Vametco
together with an production to 3 400 mtVp.a.
additional MVO (Modified will cost approximately
Vanadium Oxide) reactor US$28.2 million and take
and shaft furnace. 12-18 months following
Vanchem's Phase 3 development.
--------- ---------------------------- ---------------------------------
Capacity Vanchem Refurbishment of Phase 2 using Kiln 2 would
growth Kiln 2 and 1 with cost approximately US$
SO(2) abatement, 53 million, taking 18-24
HiVOx (Vanadium Trioxide) months to complete including
plant, smelters and a new AMV plant and the
installing of new refurbishment of the HiVOx
AMV (Ammonium Meta plant.
Vanadate) and MVR
(Mechanical Vapour Phase 3 using Kiln 1 would
Recompression) plant cost approximately US$37
and balance of plant million, taking 18-24
upgrades. months to complete including
additional HiVOx refurbishment.
--------- ---------------------------- ---------------------------------
Environmental Vametco Assess impact on No additional environmental
slimes dam and water authorizations are required
balance due to increased for expansion at Vametco.
concentrate production.
Slime dam life remained
in the region of 8 years
.
--------- ---------------------------- ---------------------------------
Environmental Vanchem Impact on air emissions Environmental Impact Assessment
and water/waste product will be required prior
management due to to breaking ground on
increase in production the new AMV Plant thus
on the critical path for
Vanchem Phase 2 .
--------- ---------------------------- ---------------------------------
Summary of the staged growth plan
Stage Plant Description Production Capex Duration
Increase (million)
1 Vametco Installation - US$32.9 24
of a SAG months
Mill and
associated
crushing
concentrator
infrastructure
to establish
a sustainable
and reliable
supply of
concentrate
feedstock for
both plants
in advance of
further
increase (up
to 6 800
mtVp.a.)
------------------- -------------------------- ----------------------------- --------------------- --------------------
2 Vanchem Refurbishment Production US$53 18 -
of Kiln increase of 24
2 1,100 mtVp.a. months
From 2,600
mtVp.a. to
between 3,600
-3,700 mtVp.a.
(Group production
6,000 - 6,500
mtVp.a)
------------------- -------------------------- ----------------------------- --------------------- --------------------
3 Vanchem Refurbishment Production US$37.0 18 -
of Kiln increase of 24
1 1,000 mtVp.a. months
From between
3,600 - 3,700
mtVp.a.
to between
4,600 - 4,700
mtVp.a.
(Group production
7,000 - 7,500
mtVp.a)
------------------- -------------------------- ----------------------------- --------------------- --------------------
4 Vametco Increase Production US$28.2 12 -
single kiln increase of 18
capacity 600 mtVp.a. months
From 2,800
mtVp.a. to
3,400 mtVp.a.
(Group production
7,600 - 8,000
mtVp.a.)
------------------- -------------------------- ----------------------------- --------------------- --------------------
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, owning 2 of the world's 4 operating primary
vanadium processing facilities. In 2021, the Company produced 3,592
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 Vanadium is targeting to materially grow its
vanadium production and achieve an annualised steady state
production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a by
the end of 2022. Growth plans to expand to 8,000 mtVp.a. will be
pursued, subject to funding and market conditions.
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
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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