TIDMBMN
RNS Number : 9863H
Bushveld Minerals Limited
02 August 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.
2 August 2023
Bushveld Minerals Limited
("Bushveld Minerals", "Bushveld" or the "Company")
Q2 and H1 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 three months and six
months ending 30 June 2023.
Group Highlights
-- Craig Coltman appointed Chief Executive Officer and board
member, effective July 1, 2023.
-- H1 2023 Total Recordable Injury Frequency Rate ("TRIFR") of
3.39 (H1 2022: 8.06).
-- Q2 2023 production of 840 mtV (Q2 2022: 668 mtV).
-- H1 2023 production of 1,784 mtV (H1 2022: 1,641 mtV).
-- Improvement measures implemented at Vanchem.
-- Q2 2023 weighted average production cash cost(1) (C1) of
US$27.4 /kgV (Q2 2022: US$31.2/kgV).
-- H1 2023 weighted average production cash cost(1) (C1) of US$
26.6 /kgV (H1 2022: US$28.3/kgV).
-- Q2 2023 sales of 1,068 mtV (Q2 2022: 787 mtV), H1 2023 of
2,096 mtV (H1 2022: 1,644 mtV)
- Supported by reductions in finished product stocks.
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
-- Group production guidance for 2023 revised to between 3,700
mtV and 3,900 mtV (previously between 4,200 mtV and 4,500 mtV)
.
-- Group weighted average production cash cost (C1) guidance
revised to between US$26.6/kgV and US$26.9/kgV, (ZAR481/kgV and
487/kgV). (Previously between US$26.1/kgV and US$27.0/kgV,
(ZAR447/kgV and 438/kgV)).
Update on the Orion convertible loan note
-- As announced in the Final Results for the Year Ended 31
December 2022, the closing of the refinancing of the Orion
transaction is conditional on certain conditions, including South
African Reserve Bank approval, the finalisation of definitive
binding documentation and shareholders' approval. As previously
notified, the Company has made significant progress with Orion on
the restructuring. Completion of the debt restructuring remains a
key priority for Bushveld and details of a general meeting for
shareholders to approve the Orion transaction will be sent to
shareholders following the completion of the legal documentation
and once approval from the South African Reserve Bank has been
received.
Craig Coltman, CEO of Bushveld Minerals Limited, commented:
"I spent my first week as the CEO on site at the Vametco and
Vanchem plants as these are the centre of Bushveld's operations. I
have had the opportunity to meet many of our employees and I am
heartened by the warmth with which they have received me as well as
the passion and commitment they have for Bushveld Minerals.
In my short time at the Company, I have seen that, while there
are challenges, there are also many positive signs and
opportunities to get the most out of Bushveld's most important
asset, its people, and achieve the full potential within the
Company's operations. Getting maximum value out of Vametco and
Vanchem is my number one priority.
As part of this effort, I will review the Group's capital
allocation strategy and prioritise projects that provide higher
financial benefits with manageable risk.
With regards to guidance and after careful review, we have come
to the conclusion that, largely due to challenges at Vametco
associated with the levels of the barren dam and the Sulphate
Recovery Plant, as well as Vanchem's weak first half performance
and delays in the use of the better quality ore, the 2023
production outlook needs to be revised.
That said, a number of initiatives have already been implemented
to address production issues to ensure we get the maximum
performance from our assets. I look forward to leading the team
that achieves this for all our stakeholders."
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 (3:30 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.
Investor session
Bushveld Minerals Chief Executive Officer, Craig Coltman and
Finance Director, Tanya Chikanza, will host an investor session on
4 August 2023 at 9:00am BST (10:00am 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
H1 2023 Q2 2023 Q2 2023
Group(1) Unit Q2 H1 2023 vs vs vs
2023 H1 2022 Q2 2022 Q1 2023
Production mtV(2) 840 1 784 8.7% 25.8% -11.0%
--------- ------- ---------- --------- --------- ---------
Weighted average
production cash -12.4
cost1 (C1) US$/KgV 27.4 26.6 -6.1 % % 5.5 %
--------- ------- ---------- --------- --------- ---------
Sales(3) mtV(2) 1 068 2 096 27.5% 35.7% 3.9%
--------- ------- ---------- --------- --------- ---------
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)
H1 2023 Q2 2023 Q2 2023
vs vs vs
Description Unit Q2 2023 H1 2023 H1 2022 Q 2 2022 Q1 2023
Ore mined Tonnes 369 468 705 557 -5.2% 16.0% 9.9%
-------- --------- -------- -------- --------- --------
Total mined (ore 2 054
+ waste) Tonnes 758 003 857 22.9%% -4.1% -41.6%
-------- --------- -------- -------- --------- --------
Ore grade (in % V(2)
Whole Rock) O(5) 0.70 0.70 -14.6% -16.7% -1.4%
-------- --------- -------- -------- --------- --------
Concentrate produced Tonnes 101 083 184 258 -0.2% 18.8% 21.5%
-------- --------- -------- -------- --------- --------
Concentrate grade % V 1.05 1.05 0.1% 0.3% 0.4%
-------- --------- -------- -------- --------- --------
Recovery from
Kiln to MVO % 63.0 68.3 -7.9% -18.2% -14.5%
-------- --------- -------- -------- --------- --------
Production (Nitro
Vanadium) mtV(2) 485 1 167 -4.8% 1.7% -28.9%
-------- --------- -------- -------- --------- --------
Production cash
cost (C1) (3) ZAR/KgV 513.5 449.9 24.5% 35.5 % 26.9 %
-------- --------- -------- -------- --------- --------
Production cash
cost (C1) (3) US$/KgV 27.5 24.7 5.1 % 12.8 % 20.6 %
-------- --------- -------- -------- --------- --------
Foreign exchange
rate ZAR: USD 18.7 18.2 18.4% 20.1% 5.2%
-------- --------- -------- -------- --------- --------
1. Based on provisional, unaudited figures. Bushveld's net
attributable interest of the above figures is approximately 74%.
Production cash cost is based on vanadium produced.
2. mtV = metric tonnes of vanadium.
3. Excludes depreciation, royalties and selling, general &
administrative expenses. Production cash cost is based on vanadium
produced. Production cash cost (C1) measure does not have any
standardized meaning prescribed by IFRS and differs from measures
determined in accordance with IFRS. This measure is intended to
provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with IFRS. This measure is not necessarily indicative
of net earnings or cash flow from operating activities as
determined under IFRS.
Production
-- Q2 2023 production of 485 mtV (Q2 2022: 477 mtV), impacted by
circa 200 mtV loss due to:
- A 5-day unplanned maintenance of the Sulphate Recovery Plant
("SRP") and unexpected high rainfall levels during the period. As
the SRP and the barren dam are interdependent, this necessitated a
plant stoppage due to barren dam level constraints.
- We are exploring both short-term and long-term capacity
storage plans to mitigate the barren dam challenges.
- Unplanned 7-day maintenance of the dust collectors at the
refinery, and power instabilities as a result of a transformer
failure at the local municipality during the end of June 2023. The
issues experienced have been resolved.
-- H1 2023 production of 1,167 mtV (H1 2022: 1,226 mtV), due to
lower production volumes in Q1 2023.
Costs
-- Q2 2023 production cash cost (C1) of US$ 27.5/ kgV (Q2 2022:
US$24.4/kgV) (Q1 2023: US$22.8/kgV), mainly due to higher raw
materials costs and maintenance costs.
-- H1 2023 production cash cost (C1) of US$ 24.7 /kgV (H1 2022:
US$23.5/kgV).
Guidance
-- Due to ongoing challenges associated with the levels of the
barren dam and the SRP, production guidance has been revised to
between 2,300 mtV and 2,400 mtV (previously circa 2,700 mtV).
- 132 mtV produced in July 2023 due mainly to challenges with
the barren dam levels and the SRP. Production is anticipated to
ramp up to around 200mtV per month for the remainder of the
year.
-- Annual 10-days (previously 30-days) planned maintenance
shutdown to be conducted in Q3 2023.
-- Production cash cost (C1) guidance has been revised to
between US$25.6/kgV and US$25.9/kgV (ZAR463/kgV and ZAR469/kgV) in
line with the expected lower production volumes.
VANCHEM
Operational highlights for Vanchem(1)
H1 2023 Q2 2023 Q2 2023
vs vs vs
Description Unit Q2 2023 H1 2023 H1 2022 Q2 2022 Q1 2023
Ore Milled Tonnes 61 932 144 722 45.2% 14.9%% --25.2%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Ore Grade (in % V(2)
Whole Rock) O(5) 1.38 1.39 8% 12.5% -1.0%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Milled ore to
Kiln Tonnes 47 825 112 672 54.4% 20.7%% -26.3%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Milled Ore Grade % V 0.96 0.95 +0.5% 1.7%% 0.3%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Recovery: Kiln
to Final Product % 67.3 69.4 4.0% -7.5% -6.0%
-------------------- --------- ------------------ ----------------- --------- --------- ---------
Chemicals mtV(2) 44 67 -39.9% -4.9%% -1661%
--------- ------------------ ----------------- --------- --------- ---------
Flake mtV (2) 121 137 1780% 100.0% 1534%
--------- ------------------ ----------------- --------- --------- ---------
FeV mtV (2) 190 413 39.5% 34.0%% -40.0%
--------- ------------------ ----------------- --------- --------- ---------
Total production mtV (2) 355 617 48.7% 85.8%% 35.7%
--------- ------------------ ----------------- --------- --------- ---------
Production -17.4 -16.2
cash cost (C1)(3) ZAR/kgV 507.3 548.9 % -32.8 % %
--------- ------------------ ----------------- --------- --------- ---------
Production -30.2 -20.3
cash cost (C1)(3) US$/kgV 27.2 30.1 % -44.0 % %
--------- ------------------ ----------------- --------- --------- ---------
ZAR:
Foreign exchange USD 18.7 18.2 18.4% 20.1% 5.2%
--------- ------------------ ----------------- --------- --------- ---------
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 2023 production of 355 mtV (Q2 2022: 191 mtV). Production
increase supported by the use of Kiln-3 , partly offset by
unplanned stoppages.
-- H1 2023 production of 617 mtV (H1 2022: 415 mtV), underpinned
by higher production volumes in Q2 2023.
Costs
-- Q2 2023 production cash cost (C1) of US$ 27.2 /kgV (Q2 2022:
US$48.5/kgV) supported by higher production volumes and a weaker
ZAR:USD exchange rate.
-- H1 2023 production cash cost (C1) of US$ 30.1 /kgV (H1 2022:
US$43.2/kgV).
Guidance
-- Notwithstanding the higher production during H1 2023,
Vanchem's production was materially lower than what the Company had
anticipated for the period due to unplanned plant breakdowns and
unscheduled power disruptions, in turn due to lack of reliability
of the municipality's infrastructure. Furthermore, there were
delays in the use of the third-party, better quality ore, which the
Company expected to begin utilising in April 2023, with processing
of this ore only commencing in July 2023. For these reasons
guidance has been revised to between 1,400 mtV and 1,500 mtV
(previously expected to be approximately between 1,500 mtV and
1,800 mtV).
- 158 mtV produced in July 2023, supported by the better quality
ore contributing to improved production and less downtime at
Vanchem.
-- Annual 25-day maintenance to be conducted in Q4 2023
(previously Q3 2023).
-- Production cash cost (C1) guidance has been revised to
between US$28.1/kgV and US$28.5/kgV (ZAR509/kgV and ZAR516kgV) in
line with the expected lower production volumes.
Vanchem improvement initiatives
-- A number of initiatives have been implemented during the
month of July 2023 with the aim of getting Vanchem into a
sustainable positive cashflow position in the short-term, and a
achieve stable production levels of approximately 180 mtV per month
within the next 6 months. These initiatives include:
- Changing the reagent mix from 100% Sodium Sulphate to a mix of
Sodium Carbonate and Sodium Sulphate, which will reduce the silica
build up at the kiln and hence increase the kiln availability.
- Deploy a team from Vametco to Vanchem to improve knowledge sharing.
- 24/7 shift managers for supervision to ensure immediate decision-making.
BELCO
-- During H1 2023, the construction and initial testing of the
BELCO electrolyte manufacturing plant were completed. In the same
period, the hot commissioning phase commenced. The plant will
continue the hot commissioning process during H2 2023, production
will commence once suitable off-takers for the product are
secured.
VAMETCO HYBRID MINI-GRID
-- The Bushveld Vametco Hybrid mini-grid project is making
progress. The 1 MW/ 4 MWh VRFB system supplied by CellCube has been
filled with electrolyte and energised for the first time, marking a
successful milestone. Currently, the construction of the 3.5 MW
solar PV plant is in progress, and the entire project is expected
to become fully operational in Q4 2023. Upon completion, the plant
will generate nearly 10% of Vametco's electricity requirements.
Health and safety
-- Q2 2023 TRIFR of 7.58 (Q2 2022 : 8.40).
-- H1 2023 TRIFR of 3.39 (H1 2022 : 8.06) a significant
improvement of 58% attributed to ongoing monitoring of leading
indicators and a decrease in the number of incidents.
Vanadium price and outlook
-- Q2 2023 Ferrovanadium prices across all markets averaged: CRU
Ryan's notes at US$40.2/kgV (Q2 2022: US$67.3kgV). London Metal
Bulletin and Asian Metals averaged US$33.5/kgV and US$29.3/kgV
respectively (Q2 2022: US$43.8/kgV; US$36.5/kgV).
-- 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 to be in line with production volumes during H2
2023.
-- The previous logistical challenges experienced have abated.
Transit times to USA and European warehouses have been extended on
occasion, this is closely monitored, and the required actions are
taken to ensure seamless supply to customers.
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Craig Coltman, Chief Executive
Officer
Chika Edeh, Head of Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jamil Miah / Sahil Suleman
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ +44 (0) 207 920
James Whitaker 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, owning 2 of the world's 4 operating primary
vanadium processing facilities. 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
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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