Q3 2023 and 9M 2023 Operational Update

Bushveld Minerals Limited

06 November 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. 

6 November 2023

Bushveld Minerals Limited

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

Q3 2023 and 9M 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 3 months and 9 months ending 30 September 2023.

Group highlights

Q3 2023

§ Production of 1,000 mtV (Q2 2023: 840 mtV) (Q3 2022: 1,016 mtV).

§ Weighted average production cash cost¹ (C1) of US$26.5/kgV (Q2 2023: US$27.4/kgV) (Q3 2022: US$29.3/kgV).

§ Sales of 849 mtV (Q2 2023: 1,068 mtV) (Q3 2022: 1,034 mtV).

9M 2023

§ Production of 2,784 mtV (9M 2022: 2,657 mtV).

§ Weighted average production cash cost¹ (C1) of US$26.4/kgV (9M 2022: US$28.9/kgV).

§ Sales of 2,945 mtV (9M 2022: 2,678 mtV).

§ Total Recordable Injury Frequency Rate ("TRIFR") of 5.69 (9M 2022:10.25).

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

§ On track to meet Group production guidance for 2023 of between 3,700 mtV and 3,900 mtV.  

-     Vametco production expected to be c.200 mtV per month for the remainder of the year.

-     Vanchem production expected to c.150 mtV in November and c.180 mtV in December. 

§ October 2023 Group production of 387 mtV (Vametco: 209 mtV) (Vanchem: 178 mtV).

§ On track to meet Group weighted average production cash cost (C1) guidance of between US$26.6/kgV and US$26.9/kgV, (ZAR481/kgV and ZAR487/kgV).

Corporate update

§ On 11 September 2023, the Company announced a Binding Term Sheet with Southern Point Resources for a cumulative proposed investment of between US$69.5 - US$77.5 million. Bushveld has since received the ZAR150 million (~US$8.1 million) interim working capital funds as part of the transaction. The Company is in process of completing the other aspects of the overall transaction.

§ The Company is progressing the various workstreams to complete the Orion convertible loan note restructuring before the 21 December 2023 due date. 

§ Post period end, the Company announced the agreement to acquire the 26% minority interest in Bushveld Vametco Holdings, the transaction is value accretive to shareholders.

Craig Coltman, CEO of Bushveld Minerals Limited, commented: 

"I am pleased to report the first set of quarterly production numbers under my stewardship. They are a solid set of results for the quarter ending 30 September 2023. What is immediately clear from the highlighted numbers is a strong improvement in production of 19% from Q2 2023, which has translated into some solid improvements on the cost front. This gives us confidence that we have made the right decisions, especially at Vanchem, with the implementation of the various initiatives, and the goal now is to ensure that things stabilise and even improve further from here.

We have made progress both in respect of the Southern Point transaction and the refinancing of the Orion convertible loan note. Completion of these transactions will steady the ship and ensure Bushveld is a sustainable business for the long term."

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 (4:30 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 Minerals 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	Q3 2023	9M 2023	9M 2023 vs 9M 2022	Q3 2023 vs Q3 2022	Q3 2023 vs Q2 2023
Production	mtV2	1,000	2,784	4.8%	-1.6%	19.0%
Weighted average production cash cost1 (C1)	US$/KgV	26.5	26.44	-8.5%	-9.6%	-3.3%
Sales3	mtV2	849	2,945	10.0%	-17.9%	-20.5%

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	Q3 2023	9M 2023	9M 2023 vs 9M 2022	Q3 2023 vs Q3 2022	Q3 2023 vs Q2 2023
Ore mined	Tonnes	368 556	1 074 113	-8.6%	-14.4%	-0.2%
Total mined (ore + waste)	Tonnes	723 316	2 778 173	-7.4%	-45.5%	-4.6%
Ore grade (in Whole Rock)	% V2O5	0.68	0.70	-18.6%	-29.2%	-2.9%
Concentrate produced	Tonnes	82 182	266 440	-8.4%	-22.5%	-18.7%
Concentrate grade	% V	1.05	1.05	1.0%	1.9%	0%
Recovery from Kiln to MVO	%	63.3	66.7	-8.5%	-10.0%	0.5%
Production (Nitro Vanadium)	mtV2	545	1 712	-9.5%	-18.2%	12.4%
Production cash cost (C1)3	ZAR/KgV	494.6	464.1	17.4%	8.1%	-3.7%
Production cash cost (C1)3	US$/KgV	26.5	25.3	2.0%	-1.5%	-3.6%
Foreign exchange rate	ZAR: USD	18.7	18.4	15.7%	10.0%	0.0%

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

§ Q3 2023 production of 545 mtV (Q2 2023: 485 mtV), (Q3 2022: 666 mtV), impacted by constraints at the barren dam and Sulphate Recovery Plant (SRP) and reliability challenges at the leach plant.

-     136 mtV, 215 mtV and 194mtV produced in July, August and September 2023 respectively.

§ The challenges experienced at the leach plant have been resolved and production is back to normal.

§ The work on the SRP/barren dam is progressing to plan and performance is showing improvement. This section is currently not a bottleneck in achieving around 200mtv, however, it is very sensitive on the impact of heavy rainfall.  

§ 9M 2023 production of 1,712 mtV (9M 2022: 1,892 mtV), with production impacted by the aforementioned reasons.

§ The previously announced 10-days planned maintenance shutdown was completed during Q3 2023, and no further planned shutdowns are expected for the rest of the year.

Costs

§ Q3 2023 production cash cost (C1) of US$26.5/kgV (Q2 2023: US$27.5/kgV), (Q3 2022: US$26.9/kgV), supported by higher production volumes in Q3 2023 compared to Q2 2023 and to a weaker ZAR:USD exchange rate in Q3 2023 compared to Q3 2022.

§ 9M 2023 production cash cost (C1) of US$25.3/kgV (9M 2022: US$24.8/kgV), mainly due to lower production volumes and partially offset by a weaker ZAR:USD exchange rate.

Guidance

§ Guidance range remains unchanged of between 2,300 mtV and 2,400 mtV.

§ Production cash cost (C1) guidance has been maintained of between US$25.6/kgV and US$25.9/kgV (ZAR463/kgV and ZAR469/kgV).

VANCHEM

Operational highlights for Vanchem¹

Description	Unit	Q3 2023	9M 2023	9M2023 vs  9M 2022	Q3 2023 vs  Q3 2022	Q3 2023 vs  Q2 2023
Ore Milled	Tonnes	82 403	227 125	34.5%	19.0%	33.1%
Ore Grade (in Whole Rock)	% V2O5	1.32	1.37	3.0%	-6.4%	-4.3%
Milled ore to Kiln	Tonnes	58 166	170 838	37.7%	13.8%	21.6%
Milled Ore Grade	% V	0.99	0.97	3.2%	6.5%	3.1%
Recovery: Kiln to Final Product	%	65.1	60.6	-1.7%	-6.9%	1.6%
Chemicals	mtV2	90	157	14.6%	246.2%	104.5%
Flake	mtV2	66	203	167.1%	-4.3%	-45.5%
FeV	mtV2	299	713	29.2%	17.3%	57.4%
Total production	mtV2	455	1072	40.1%	30.0%	28.2%
Production cash cost (C1)3	ZAR/kgV	492.4	519.4	-16.7%	-14.4%	-2.9%
Production cash cost (C1)3	US$/kgV	26.4	28.3	-27.6%	-21.9%	-2.9%
Foreign exchange	ZAR: USD	18.7	18.4	15.7%	10.0%	0.0%

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 2023 production of 455 mtV (Q2 2023: 355 mtV), (Q3 2022: 350 mtV). Production increase supported by improved operational performance underpinned by the Vanchem turn around project, partly offset by unplanned stoppages.

-     160 mtV, 175mtV and 120 mtV produced in July, August and September 2023 respectively.

§ September 2023 production was 120 mtV, due to a 9 day shutdown to repair the refractory. The shutdown was successful and at the back of this Vanchem will not require to conduct the previously announced 25-day maintenance in Q4 2023. 

§ 9M 2023 production of 1,072 mtV (9M 2022: 765 mtV), underpinned by improved operational performance.  

Costs

§ Q3 2023 production cash cost (C1) of US$26.4/kgV (Q2 2023: US$27.2/kgV) (Q3 2022: US$33.8/kgV), supported by higher production volumes in Q3 2023 compared to Q2 2023, a weaker ZAR:USD exchange rate and higher production volumes in Q3 2023 compared to Q3 2022.

§ 9M 2023 production cash cost (C1) of 28.3/kgV (9M 2022: US$39.1/kgV) supported by a weaker ZAR:USD exchange rate and higher production volumes.

Guidance

§ Production guidance range has been maintained at between 1,400 mtV and 1,500 mtV.

§ The planned 25-day maintenance for the year is no longer required by virtue of a 9 and 4 day shutdown in September and November respectively.

-     178 mtV produced in October 2023.  Production is expected to be around 150 mtV in November (due to the 4 day shutdown) and 180 mtV in December.  

§ Production cash cost (C1) guidance range has been maintained to between US$28.1/kgV and US$28.5/kgV (ZAR509/kgV and ZAR516kgV).

BELCO  

The hot commissioning phase was completed in July and construction completed in August. An initial batch of electrolyte was produced to fulfil a small order and produce samples. These samples are now being distributed among international customers in an effort to qualify BELCO and its electrolyte with battery companies. This qualification step is essential prior to issuance of orders. It is expected to take a few months.

VAMETCO HYBRID MINI-GRID  

The construction of the 3.5 MW solar PV plant was completed during the period. The plant was first energised at the end of September. The plant and all its components are now undergoing site acceptance and grid compliance testing. The plant will generate approximately 10% of Vametco's electricity requirements.

HEALTHY AND SAFETY

Q3 2023 TRIFR  of 4.94 (Q3 2023: 12.01), 9M 2023 TRIFR at 5.69 (9M 2022: 10.25), supported by improved reporting of leading indicators analysed for learning and improvement opportunities.

VANADIUM MARKET

§ Q3 2023 sales of 849 mtV (Q2 2023: 1,068 mtV), below previous quarter due to inventory in the logistics pipeline at quarter end.  

§ 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 volume to be in line with production volumes for the rest of 2023.

§ Q3 2023: CRU Ryan's Notes Ferrovanadium prices averaged US$36.0/kgV. London Metal Bulletin and Asian Metals averaged US$31.5/kgV and US$31.0/kgV respectively.

ENDS

Enquiries: [e-mail]

Bushveld Minerals Limited		[phone]
Craig Coltman, 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]
Jamil Miah / Sahil Suleman
Tavistock	Financial PR
Gareth Tredway / Tara Vivian-Neal/ James Whitaker		[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. 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.

 

END