Q1 2023 Operational Update

Bushveld Minerals Limited

27 April 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. 

27 April 2023

Bushveld Minerals Limited

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

Q1 2023 Operational Update, Vametco Mineral Reserve and Resource and Lemur Mineral Resource.

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium producer and energy storage solutions provider, today provides an operational update for the three months ending 31 March 2023.

Group Highlights

§ Production for Q1 2023 of 943 mtV (Q1 2022: 973 mtV).

§ Weighted average production cash cost¹ (C1) for Q1 2023 of US$25.9/kgV (Q1 2022: US$26.6/kgV).

§ Increase in sales for Q1 2023 of 1,028 mtV (Q1 2022: 857 mtV), owing to increased sales out of inventory.

§ Secured a third-party low-silica feed for Vanchem to support more stable production rates at no additional cost.

§ Completed construction and cold commissioning of the BELCO electrolyte plant.

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 maintained at between 4,200 mtV and 4,500 mtV.

§ Maintained Group weighted average production cash cost (C1) guidance of between US$26.1kgV and US$27.0/kgV, (ZAR447/kgV and 438/kgV).

-     Vametco production cash cost (C1) guidance of between US$23.6kgV and US$24.0/kgV, (ZAR396/kgV and R402kgV).

-     Vanchem production cash cost1 (C1) guidance of between US$29.7kgV and US$30.8kgV, (ZAR498/kgV and ZAR517kgV).

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: 

"We are on track to meet annual group production and cost guidance. Vanchem's power curtailment solution with the local municipality announced recently, has so far provided a more reliable feed of electricity contributing to improved operational stability in the months of March and April. In addition, securing third party, low silica feed for Vanchem will support more stable production going forward. Vametco performed consistently against the comparable period in 2022, albeit there was disruption as a result of high rainfall and work to replace the secondary crusher.

I'm pleased to report our sales volumes increased by 20% in the quarter after we decided to drawdown on Vanchem's inventory from 2022, during this drawdown phase we undertook a two-week maintenance at the facility."

Conference call

Bushveld Minerals Chief Executive Officer, Fortune Mojapelo will host a conference call at 1:00pm UK time (2:00 pm SAST) today to discuss the quarterly update with analysts and investors. Participants may join the call by dialling:

Tel: United Kingdom: [phone]; South Africa: Toll Free: 0 800 980 512, USA Local: [phone]

Password: Quote Bushveld Q1 Results when prompted by the operator.

A replay of the conference call will be available on the Company's website post the call.

BUSHVELD VANADIUM

Group1	Unit	Q1 2023	Q1 2023 vs Q1 2022	Q1 2023 vs Q4 2022
Production	mtV2	943	-3.0%	-20.3%
Weighted average production cash cost1 (C1)	US$/KgV	25.9	-2.6%	3.2%
Sales3	mtV2	1,028	20.0%	13.5%

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	Q1 2023	Q1 2023 vs Q1 2022	Q1 2023 vs Q4 2022
Ore mined	Tonnes	336 089	-21.1%	-20.8%
Total mined (ore + waste)	Tonnes	1 296 854	47.0%	0.5%
Ore grade (in Whole Rock)	% V2O5	0.71	-11.3%	-18.4%
Concentrate produced	Tonnes	83 175	-16.5%	16.5%
Concentrate grade	% V	1.05	0%	5.0%
Recovery from Kiln to MVO	%	73.7	3.3%	4.2%
Production (Nitro Vanadium)	mtV2	682	-8.9%	-16.1%
Production cash cost (C1)3	ZAR/KgV	404.7	20.1%	8.7%
Production cash cost (C1)3	US$/KgV	22.8	3.2%	8.1%
Foreign exchange rate	ZAR: USD	17.8	16.8%	0.7%

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

§ Q1 2023 production of 682 mtV (Q1 2022: 749 mtV), (Q4 2022: 812 mtV) impacted by 10-days of high rainfall and a one-week maintenance shutdown to replace the secondary crusher.  

§ Annual 30-day planned maintenance shutdown is now expected during Q3 2023, previously Q2 2023 due to increased confidence in the Kiln's current performance levels. 

Costs

§ Q1 2023 production cash cost (C1) of US$22.8/kgV (Q1 2022: US$22.1/kgV) (Q4 2022: US$21.1/kgV), mainly due to lower production volumes during the quarter.

VANCHEM

Operational highlights for Vanchem¹

Description	Unit	Q1 2023	Q1 2023 vs Q1 2022	Q1 2023 vs Q4 2022
Ore Milled	Tonnes	82 790	80.3%	-8.7%
Ore Grade (in Whole Rock)	% V2O5	1.40	3.7%	8.6%
Milled ore to Kiln	Tonnes	64 848	94.3%	4.9%
Milled Ore Grade	% V	0.95	-1.8%	-0.7%
Recovery: Kiln to Final Product	%	71.5	18.0%	16.0%
Chemicals	mtV2	23	-36.2%	-58.4%
Flake	mtV2	15	118.3%	100.0%
FeV	mtV2	223	23.7%	112.5%
Total production	mtV2	261	16.9%	-29.7%
Production cash cost (C1)3	ZAR/kgV	605.5	3.0%	1.5%
Production cash cost (C1)3	US$/kgV	34.1	-11.6%	0.8%
Foreign exchange	ZAR: USD	17.8	16.6%	0.7%

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

§ Q1 2023 production of 261 mtV (Q1 2022: 224 mtV) supported by improved Kiln-3 availability, and the electricity curtailment solution introduced in November 2022.

-     121 mtV produced during the months of January and February collectively.  

-     141 mtV produced during the month of March with 117 mtV as at 24 April, supported by improved operational stability.

§ Q1 2023 production of 261 mtV (Q4 2022: 372 mtV) is below Q4 2022 as an opportunity was identified to drawdown on inventory from 2022 and a two-week maintenance was undertaken during this drawdown phase.

§ A new supply agreement for lower-silica ore than the Upper seam ore, has been agreed at Vanchem with a third party, and it is anticipated to allow for higher recoveries, resulting in a more stable production rates at no additional costs.

§ Annual 25-day maintenance planned for Q3 2023.

Costs

§ Q1 2023 production cash cost (C1) of US$34.1/kgV (Q1 2022: US$38.6/kgV) supported by a weaker ZAR:USD exchange rate and higher production volumes.

§ Q1 2023 production cash cost (C1) of US$34.1/kgV (Q4 2022: US$33.8/kgV) mainly due to lower production volume.

-     Costs are expected to decrease during the course of the year and be in line with guidance.  

BELCO

Construction and cold commissioning of the BELCO electrolyte manufacturing plant was completed during the quarter and hot commissioning commenced during the period. The plant has a targeted annual capacity of 8 million litres of vanadium electrolyte. Discussions are ongoing with the end users in relation to sales and off-take agreements. BELCO is 55% owned by Bushveld Energy, and 45% by the Industrial Development Corporation.  

VAMETCO MINI GRID

The project's 1 MW/4 MWh VRFB supplied by CellCube, a VRFB original equipment manufacturer arrived on site at the Vametco mine during Q1 2023. The construction and commissioning of the 3.5 MW solar PV and 1MW / 4 MWh Mini grid project is due for completion mid-2023. The hybrid mini grid will supply just under 10 percent of the mine's electricity needs.

HEALTH AND SAFETY

§ Q1 2023 Total Recordable Injury Frequency Rate of 3.67 (Q1 2022: 7.62) a 51% improvement as a result of continued focus on the safety improvement program from safety diagnostic assessment.

VANADIUM PRICE AND OUTLOOK

§ Q1 2023 Ferrovanadium prices across all markets averaged: London Metal Bulletin US$39.4/kgV, (Q1 2022: US$46.1/kgV). CRU Ryan's notes and Asian Metals averaged US$42.5/kgV and US$37.8/kgV (Q2 2022: US$49.6kgV; US$38.0/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 to maximise income. The respective returns are continually evaluated with changes in pricing in the various regions to ensure optimal revenue.

§ Demand for our entire range of products remains strong and sales equal production volumes. We continue to market our products across the globe to ensure our continued presence in all major regions to optimise our sales volumes.

§ The previous logistical challenges experienced have abated somewhat although transit times are still extended on an arbitrary basis.

MINERAL RESOURCES AND RESERVES UPDATE

Vametco Updated Minerals Reserve and Resource.

Vametco's resource and reserve estimates are based on the Competent Person's statements prepared by an independent consultancy company, the MSA Group (Pty) Ltd as at 31 December 2022 in accordance with the terminology and definitions given in the JORC Code (2012).

Key Highlights

§ The Ore Reserves are reported as at 31 December 2022 at 264,600 tonnes V₂O₅ in magnetite at a grade of 1.99 per cent V₂O₅ (in magnetite), following mining depletion during the 12 month period (31 December 2021 is 262,000 tonnes V₂O₅).

§ The combined Inferred and Indicated Mineral Resource comprises 3 Seams (The Lower, Intermediate, and Upper Seams) and is reported at 181.5 Mt at an average grade of 1.98 per cent V₂O₅ (in magnetite) as at 31 December 2022 (182.7 Mt at an average grade of 1.98 per cent V₂O₅ (in magnetite) as at 31 December 2021), with an average magnetite content of 35.0 per cent (in whole rock) for 699.0 thousand tonnes of contained vanadium. (703.9 thousand tonnes of contained vanadium as at December 2021).

§ Within this, the Ore Reserve in the Probable Category comprises 3 Seams (The Lower, Intermediate, and Upper Seams) and is reported as 46.4 Mt at an average grade of 1.99 per cent V₂O₅ (in magnetite), with an average magnetite content of 28.7 per cent (in whole rock) for 148,200 tonnes of vanadium.

§ The decrease in the total 2022 Mineral Resource is attributed to mining of the seams over the 12 months between the 31 December 2021 estimate. No Mineral Resource exploration was carried out over the period.

§ The increase in the total 2022 Ore Reserves from 45.3 Mt to 46.4 Mt as at 31 December 2022 is mainly due to the impact of the revised Vametco pit design (September 2022) which incorporated additional Upper and Intermediate Seam tonnage. The additional tonnage was offset by the Ore Reserve depletion which was calculated to be 1.2 Mt for the combined Seams, mined over the 12-month period.

§ An adjustment was made to the modifying factors to reflect more accurate Ore Reserve grades for the individual seams. The Ore Reserve modifying factors (mining loss and dilution) were adjusted based on pit to plant reconciliation production data supplied by Bushveld Vametco Alloys (Pty) Ltd. The impact of the revised Pit Design and adjustment to modifying factors is an additional 2.3 Mt.

The full report of the mineral resources and reserves is available on the Company website: https://www.bushveldminerals.com/technical-reports/

Table 1: Vametco Mineral Resource at a cut-off grade of 20% magnetite, as at 31 December 2022 - Gross Basis
Class	Seam Name	Tonnes (Millions)	V2O5 grade of whole rock %	Magnetite grade of whole rock %	V2O5 grade in magnetite %	Tonnes V2O5 in magnetite (Thousands)	Tonnes V in magnetite (Thousands)
	Upper	5.4	1.44	65.9	1.78	62.7	35.1
Indicated	Intermediate Lower	27.6 105.9	0.67 0.72	32.9 32.4	1.91 2.03	173.1 697.2	97.0 390.4
	Total	139.0	0.74	33.8	2.00	933.0	522.5
	Upper	10.2	1.46	63.6	1.75	113.3	63.5
Inferred	Intermediate Lower	7.0 25.4	0.67 0.74	32.1 31.3	1.92 2.00	43.4 158.4	24.3 88.7
	Total	42.6	0.90	39.1	1.93	315.2	176.5
	Upper	15.5	1.45	64.4	1.76	176.0	98.6
Indicated and	Intermediate	34.7	0.67	32.7	1.91	216.5	121.3
Inferred	Lower	131.3	0.72	32.1	2.03	855.6	479.2
	Total	181.5	0.77	35.0	1.98	1,248.2	699.0

Notes:

1.       All tabulated data have been rounded and as a result minor computational errors may occur.

2.       Mineral Resources which are not Ore Reserves have no demonstrated economic viability.

3.       Mineral Resources are inclusive of Ore Reserves (not indicated in the table).

4.       Magnetite content (grade) is determined as the proportion of magnetite concentrate recovered using Davis Tube methodology.

5.       Due to the magnetite grade being a recovered grade, differences will occur between whole rock V2O5 grades back-calculated from concentrate, versus those derived from whole rock assays.

6.       Depleted using the January 2023 pit survey.

7.       Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 74%.

Table 2: Vametco Mineral Resource at a cut-off grade of 20% magnetite, as at 31 December 2022 - Attributable Basis
Class	Seam Name	Tonnes (Millions)	V2O5 grade of whole rock %	Magnetite grade of whole rock %	V2O5 grade in magnetite %	Tonnes V2O5 in magnetite (Thousands)	Tonnes V in magnetite (Thousands)
	Upper	4.0	1.44	65.9	1.78	46.4	26.0
Indicated	Intermediate Lower	20.5 78.4	0.67 0.72	32.9     32.4	1.91 2.03	128.1 515.9	71.8 288.9
	Total	102.8	0.74	33.8	2.00	690.4	386.6
	Upper	7.5	1.46	63.6	1.75	83.9	47.0
Inferred	Intermediate Lower	5.2 18.8	0.67 0.74	32.1 31.3	1.92 2.00	32.1 117.2	18.0 65.7
	Total	31.5	0.90	39.1	1.93	233.2	130.6
	Upper	11.5	1.45	64.4	1.76	130.3	73.0
Indicated and	Intermediate	25.7	0.67	32.7	1.91	160.2	89.7
Inferred	Lower	97.2	0.72	32.1	2.03	633.2	354.6
	Total	134.3	0.77	35.0	1.98	923.7	517.3

Notes:

1.       All tabulated data have been rounded and as a result minor computational errors may occur.

2.       Mineral Resources which are not Ore Reserves have no demonstrated economic viability.

3.       Mineral Resources are inclusive of Ore Reserves (not indicated in the table).

4.       Magnetite content (grade) is determined as the proportion of magnetite concentrate recovered using Davis Tube methodology.

5.       Due to the magnetite grade being a recovered grade, differences will occur between whole rock V2O5 grades back-calculated from concentrate, versus those derived from whole rock assays.

6.       Depleted using the January 2023 pit survey.

7.       Reported on an Attributable Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 74%.

Table 3: Vametco Ore Reserves, 31 December 2022 - Gross Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Probable	Upper	1.9	1.07	50.2	1.77	16.7	9.3
	Intermediate	8.3	0.57	26.7	1.87	41.3	23.1
	Lower	36.2	0.62	28.1	2.03	206.7	115.7
	Total	46.4	0.63	28.7	1.99	264.6	148.2

Notes:

1.       All tabulated data have been rounded and as a result minor computational errors may occur.

2.       Ore Reserve tonnes and grades reported on dry run of mine (ROM) (plant feed) basis after mining modifying factors have been applied but before beneficiation down-stream recoveries/losses have been applied.

3.       Reporting was prepared on a Mineral Resource model developed by MSA.

4.       Ore Reserves depleted as at 31 December 2022 using 31 December 2022 pit survey.

5.       Ore Reserve estimate was based on a revised pit design completed in September 2022.

6.       Ore Reserve modifying factors adjusted by seam based on analysis of pit to plant production information.

7.       Ore Reserve estimate depleted using Datamine Studio 5DP Open Pit software and latest topography supplied by Vametco as of 31 December 2022.

8.       Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 74%.

Table 4: Vametco Ore Reserves, 31 December 2022 - Attributable Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Probable	Upper	1.4	1.07	50.2	1.77	12.4	6.9
	Intermediate	6.1	0.57	26.7	1.87	30.5	17.1
	Lower	26.8	0.62	28.1	2.03	152.9	85.6
	Total	34.3	0.63	28.7	1.99	195.8	109.7

Notes:

1.       All tabulated data have been rounded and as a result minor computational errors may occur.

2.       Ore Reserve tonnes and grades reported on dry run of mine (ROM) (plant feed) basis after mining modifying factors have been applied but before beneficiation down-stream recoveries/losses have been applied.

3.       Reporting was prepared on a Mineral Resource model developed by MSA.

4.       Ore Reserves depleted as at 31 December 2022 using 31 December 2022 pit survey.

5.       Ore Reserve estimate was based on a revised pit design completed in September 2022

6.       Ore Reserve modifying factors adjusted by seam based on analysis of pit to plant production information.

7.       Ore Reserve estimate depleted using Datamine Studio 5DP Open Pit software and latest topography supplied by Vametco as of 31 December 2022.

8.       Reported on an Attributable Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 74%.

Lemur Holdings Limited

The Mineral Resource estimates are based on the competent person's report prepared by Sumsare Consulting Group CC.

Key highlights

§ An updated gross tonnage in-situ (GTIS) of 140 387 has been reported in the three seams: main, upper, and top seams.  This represents a 3% increase from the GTIS of 135 737 reported in 2019.

§ The increase in the resource estimate is attributed to new data made available from the 10 new diamond drillholes drilled in 2021.

§ The updated coal resource estimate contained in 3 main coal seams amounts to a mineable tonnage in situ (MTIS) of 116.411 million tons (Mt). Of this 76.500 Mt is estimated to be at a measured status with the balance of 33.274 Mt and 6.637 Mt at indicated and inferred levels of confidence, respectively.

§ Reporting of Mineable tons in-situ (MTIS) is in response to the new reporting guidelines of SAMREC (2016), SANS 10320 (2016) which is unique for the systematic evaluation of coal resources and coal reserves.

The full report of the mineral resources and reserves is available on the Company website: https://www.bushveldminerals.com/technical-reports/

Table 1: Resource for the Imaloto coal project

Category	Gross			Mineable (SAMREC 2016)			Nett attributable (99 %)			Operator
	GTIS Tonnes (Mt)	Raw Coal Quality (ADB)		MTIS Tonnes (Mt)	Raw Coal Quality (ADB)		MTIS Tonnes (Mt)	Raw Coal Quality (ADB)
		Ash (%)	CV (MJ/kg)		Ash (%)	CV (MJ/kg)		Ash (%)	CV (MJ/kg)
Coal Resources per asset										Lemur Holdings (Ltd).
Measured	90.448	33.5	19.26	76.500	33.5	19.26	75.735	33.5	19.26
Indicated	41.206	37.0	17.66	33.274	37.0	17.66	32.941	37.0	17.66
Inferred	8.733	36.6	18.42	6.637	36.6	18.42	6.571	36.6	18.42
Sub-Total	49.939	36.9	17.79	39.911	36.9	17.79	39.512	36.9	17.79
Total	140.387	34.7	18.74	116.411	34.7	18.75	115.247	34.7	18.75

Competent Person's Statement

In accordance with the "AIM Rules - Note for Mining and Oil and Gas Companies", the information contained within the announcement has been reviewed and approved by Troth Saindi, the Group Geologist for Bushveld Minerals SA (Pty) Ltd. Troth has 17 years' experience in economic geology and mineral resource management. His experience extends through several commodities including precious metals, PGEs and base metals. He is a member of the South African Council for Natural Scientific Professions (SACNASP - 400171/13), as well as a Fellow of the Geological Society of South Africa (FGSSA - 965810) in good standing. One of his major achievements in the exploration industry was the involvement in the target generation and discovery of the new Waterberg Platinum PGE deposit for Platinum Group Metals RSA (Pty) Ltd in the Northern Limb of the Bushveld Igneous Complex in South Africa. Troth has 9 years' experience in Fe-V-Ti Mineral Resources, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2012). Troth Saindi consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

ENDS

Enquiries: [e-mail]

Bushveld Minerals Limited		[phone]
Fortune Mojapelo, Chief Executive Officer
Chika Edeh, Head of Investor Relations
SP Angel Corporate Finance LLP	Nominated Adviser & Broker	[phone]
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
RBC Capital Markets	Joint Broker	[phone]
Jonathan Hardy / Caitlin Leopold
Tavistock	Financial PR
Gareth Tredway / Tara Vivian-Neal / Adam Baynes		[phone]

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 3,842 mtV, representing more than 3% of the global vanadium market. Bushveld Vanadium is targeting to grow its vanadium production and achieve an annualised steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a in the near term from existing capacity. Growth plans to expand to 8,000 mtVp.a. will be pursued, subject to funding and market conditions.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.

Glossary of Technical Terms

Cut-off grade	The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification.
Indicated Mineral Resources or Indicated Resources	Indicated Mineral Resource or Indicated Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical Glossary of Technical Terms Cut-off grade The lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. May be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification. Indicated Mineral Resources or Indicated Resources Indicated Mineral Resource or Indicated Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed Inferred Mineral Resources or Inferred Resources An Inferred Mineral Resource or Inferred Resource is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. JORC Code The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"), a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves. Magnetite Naturally occurring form of iron ore with the formula Fe3O4. Mt Millions of tonnes mt or mtV Metric tonne or Metric tonne of Vanadium Ore or Mineral Reserves Ore or Mineral Reserves are sub-divided into two categories. The "Proved" category - the highest level of Reserves or the level with the most confidence and the "Probable" category - the lower level of confidence of the Reserves. Reserves are distinguished from resources as all the technical and economic parameters have been applied and the estimated grade and tonnage of the resources should closely approximate the actual results of mining. The guidelines state: "Mineral Reserves are inclusive of the diluting material that will be mined in conjunction with the Mineral Reserve and delivered to the treatment plant or equivalent facility." The guidelines also state that: "The term 'Mineral Reserve' need not necessarily signify that extraction facilities are in place or operative or that all government approvals have been received. It does signify that there are reasonable expectations of such approvals." Seam A bed or a distinct layer of vein of rock in other layers of rock Vanadium Vanadium is a chemical element with the symbol V and atomic number 23. Vanadium Oxide Vanadium(V) oxide is the inorganic compound with the formula V2O5.  characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed
Inferred Mineral Resources or Inferred Resources	An Inferred Mineral Resource or Inferred Resource is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
JORC Code	The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the "JORC Code"), a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves.
Magnetite	Naturally occurring form of iron ore with the formula Fe3O4.
Mt	Millions of tonnes
mt or mtV	Metric tonne or Metric tonne of Vanadium
Ore or Mineral Reserves	Ore or Mineral Reserves are sub-divided into two categories. The "Proved" category - the highest level of Reserves or the level with the most confidence and the "Probable" category - the lower level of confidence of the Reserves. Reserves are distinguished from resources as all the technical and economic parameters have been applied and the estimated grade and tonnage of the resources should closely approximate the actual results of mining. The guidelines state: "Mineral Reserves are inclusive of the diluting material that will be mined in conjunction with the Mineral Reserve and delivered to the treatment plant or equivalent facility." The guidelines also state that: "The term 'Mineral Reserve' need not necessarily signify that extraction facilities are in place or operative or that all government approvals have been received. It does signify that there are reasonable expectations of such approvals."
Seam	A bed or a distinct layer of vein of rock in other layers of rock
Vanadium	Vanadium is a chemical element with the symbol V and atomic number 23.
Vanadium Oxide	Vanadium(V) oxide is the inorganic compound with the formula V2O5.

 

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