Q3 and 9M 2024 Operational Update

Bushveld Minerals Limited

08 November 2024

 

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. 

08 November 2024

Bushveld Minerals Limited

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

Q3 and 9M 2024 Operational Update

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium producer, is pleased to announce its operational update for the three months ("Q3") and nine months ("9M") ending 30 September 2024.

Group Highlights

·      Production for Q3 2024 of 855 mtV (Q3 2023: 1,000 mtV).

·      Production for nine months 2024 of 2,546 mtV (9M 2023: 2,784 mtV).

·      Weighted average production cash cost¹ (C1) for Q3 2024 of US$27.5/kgV (Q3 2023: US$26.5/kgV).

·      Weighted average production cash cost¹ (C1) for 9M 2024 of US$27.8/kgV (9M 2023: US$26.4/kgV).

·      Sales for Q3 2024 of 859 mtV (Q3 2023: 849 mtV).

·      Sales for 9M 2024 of 2,492 mtV (9M 2023: 2,945mtV).

·      Total Recordable Injury Frequency Rate ("TRIFR") for 9M 2024 of 2.41.

·      Began work on cost-cutting initiatives and development works to return the Company to profitability and secure Bushveld's long-term future, with the potential to achieve annualised savings of US$8m-$10m by the end of 2025.

·      Completed the disposal of Lemur Holdings ("Lemur"), resulting in Bushveld no longer being liable for the outstanding c.US$2.5 million debt owed to the Development Bank of South Africa ("DBSA"), for a nominal consideration of US$100.

·      Due to liquidity issues, a controlled slowdown of production has commenced at Vametco, the length of which will be determined by the timing of receipt of sufficient further funds, as announced 25 October 2024.

·      All conditions relating to the sale of the Vanchem vanadium processing plant, including Competition Tribunal approval have now been met. The transaction was completed on Thursday, 07 November 2024. As a result, Vanchem is no longer part of the Group.

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

·    Owing to the Company's working capital conditions, guidance has been suspended for the remainder of 2024.

Craig Coltman, CEO of Bushveld Minerals Limited, commented: 

"While Q3 reflects lower volumes and a challenging quarter overall, our commitment to operational efficiency and long-term sustainability remains our key focus. Bushveld has taken difficult, but necessary, steps this quarter to stabilise our financial position, including a reduction of the current labour complement at both Vametco and Head Office, and a controlled slowdown of Vametco due to current liquidity issues. We also achieved meaningful progress in rationalising our asset base during this period. We completed the disposal of Lemur and we completed on the sale of Vanchem, allowing us to focus on Vametco as the Company's core producing vanadium asset. Due to the Company's cash position currently not being sufficient to fully sustain our operations or meet immediate liabilities, we are actively engaging with various stakeholders to explore various options to address our immediate liquidity position. Until we are able to address our liquidity challenges, we will continue with a controlled slowdown of production.  We will provide further updates in due course."

Investor session  

Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief Financial Officer, Robbie Taylor, will host an investor session on 12 November 2024 at 13:30 GMT (15:30 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	Q3 2024	9M 2024	9M 2024 vs 9M 2023	Q3 2024 vs Q3 2023	Q3 2024 vs Q2 2024
Production	mtV2	855	2546	-8.5%	-14.5%	2%
Weighted average production cash cost1 (C1)	US$/KgV	27.5	27.8	5%	3.9%	1%
Sales3	mtV2	859.0	2492.0	-15.4%	1.2%	13%

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	Q3 2024	9M 2024	9M 2024 vs 9M 2023	Q3 2024 vs Q3 2023	Q3 2024 vs Q2 2024
Ore mined	Tonnes	321,615	849,796	-20.9%	-12.7%	5.3%
Total mined (ore + waste)	Tonnes	450,437	1,071,403	-61.4%	-37.7%	23.4%
Ore grade (in Whole Rock)	% V2O5	0.74	0.71	1.4%	8.8%	12.1%
Concentrate produced	Tonnes	86,906	246,276	-7.6%	5.7%	-2.8%
Concentrate grade	% V	1.00	1.03	-1.9%	-4.8%	-2.0%
Recovery from Kiln to MVO	%	62%	62%	-7.7%	-1.5%	2.2%
Production (Nitro Vanadium)	mtV2	485	1,387	-19.0%	-11.1%	-11.6%
Production cash cost (C1)3	ZAR/KgV	556	587	26.6%	12.3%	-8.9%
Production cash cost (C1)3	US$/KgV	30.9	32.1	27.0%	16.7%	-5.7%
Foreign exchange rate	ZAR: USD	17.9	18.5	0.4%	-3.9%	-3.4%

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

§ Q3 2024 production of 485 mtV (Q3 2023: 545 mtV), impacted by a kiln cooler maintenance shutdown in August. Although the plant recovered well after the shutdown, cashflow challenges impacted overall performance.

§ 9M 2024 production of 1,387 mtV (9M 2023: 1,712 mtV), impacted by cash flow issues which affected the availability of raw materials and spare parts. Additionally, the plant experienced two shutdowns in 2024; one in February due to maintenance on the kiln and the other aforementioned shutdown in August due to maintenance on the kiln cooler.

Costs

§ Q3 2024 production cash cost (C1) of US$30.9/kgV (Q3 2023: US$26.5/kgV) (Q2 2024: US$32.8/kgV), primarily impacted by lower production, lower ZAR:US$ exchange rate, higher maintenance costs and raw material costs.

§ 9M 2024 production cash cost (C1) of US$32.1/kgV (9M 2023: US$25.3/kgV), primarily impacted by lower production and higher maintenance costs and raw material costs.

Outlook

·      As announced on 25 October, a controlled slowdown of production has commenced at Vametco, the length of which will be determined by the timing of receipt of sufficient further funds. The slowdown is progressing as planned whilst the Company is actively engaging with all stakeholders to strengthen its liquidity position.

VANCHEM

As announced 01 November 2024, all conditions relating to the sale of the Vanchem vanadium processing plant, including Competition Tribunal approval, have been met. Final agreements were entered into on 31 October 2024 and the transaction was completed on Thursday, 07 November 2024. As a result, Vanchem is no longer part of the Group.

Operational highlights for Vanchem ¹

Description	Unit	Q3 2024	9M 2024	9M 2024 vs 9M 2023	Q3 2024 vs Q32 2023	Q3 2024 vs Q2 2024
Ore Milled	Tonnes	49,575	129,057	-43.2%	-39.8%	47.3%
Ore Grade (in Whole Rock)	% V2O5	1.9%	2.0%	-98.6%	46.7%	-6.0%
Milled ore to Kiln	Tonnes	49,019	134,804	-21.1%	-15.7%	41.6%
Milled Ore Grade	% V	2.0%	2.0%	104.0%	98.7%	-3.8%
Recovery: Kiln to Final Product	%	67.1%	66.2%	9.2%	3.1%	3.5%
Chemicals	mtV2	69	234	49.0%	-22.9%	292.6%
Flake	mtV2	236	629	210.1%	257.8%	22.0%
FeV	mtV2	65	296	-58.5%	-78.3%	-17.8%
Total production	mtV2	370	1,159	8.1%	-18.6%	27.6%
Production cash cost (C1)3	ZAR/kgV	415.1	416.4	-19.8%	-15.7%	32.9%
Production cash cost (C1)3	US$/kgV	23.1	22.5	-20.4%	-12.5%	37.4%
Foreign exchange	ZAR: USD	17.9	18.5	0.4%	-3.9%	-3.3%

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 2024 production of 370 mtV (Q3 2023: 455 mtV), impacted by issues with the kiln which followed on from the earlier maintenance work in May.

§ 9M 2024 production of 1,159 mtV (9M 2023: 1,072 mtV), impacted by cashflow challenges which affected the availability of raw materials and spares, in addition to the aforementioned issues with the kiln. The plant also experienced issues with the mills following the May shutdown, impacting performance between June and July.

Costs

§ Q3 2024 production cash cost (C1) of US$23.1/kgV (Q3 2023: US$26.4/kgV) (Q2 2024: US$16.8), primarily due to costs allocated to idle plant costs and cost saving initiatives, partially offset by lower production

§ 9M 2024 production cash cost (C1) of US$22.5/kgV (9M 2023: US$26.4/kgV), primarily due to higher production, costs allocated to idle plant costs and cost saving initiatives.

LEMUR

As announced, 18 October 2024, the Company completed the disposal of Lemur, resulting in Bushveld no longer being liable for the outstanding c.US$2.5 million debt owed to the DBSA, for a nominal consideration of US$100.

SECTION 189

As previously announced on 10 September 2024, the Company is pursuing a multi-pronged approach to reducing costs and to ultimately maintain Vametco's production, including reducing the current labour complement at both Vametco and Head Office to ensure a fit-for-purpose structure enabling the long-term sustainability of Bushveld Minerals. In line with the Section 189 process under the Labour Relations Act, 1995, notices were issued to impacted employees at Vametco and Head Office. This process is currently in progress. 

WORKING CAPITAL SITUATION

The Company's funds at hand are currently not sufficient to sustain the Company's operations and meet its immediate liabilities, and the Company is actively engaging with various stakeholders to explore options to address its liquidity position. Further updates will be provided in due course.

HEALTH AND SAFETY

§ Q3 2024 TRIFR of 1.10 (Q3 2023: 0).

§ 9M 2024 TRIFR of 2.41 (9M 2023: 1.26), a decline vs 2023. This was due to five low potential medical treatment cases that did not result lost time.

VANADIUM PRICE AND OUTLOOK

§ Q3 2024 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$28.4/kgV, showing a slight deterioration from US$28.6/kgV achieved in Q2 2024. Unfortunately, both London Metal Bulletin ("LMB") (Europe) and Asian Metals ("AM") (Asia) continued their decline in Q3 2024, averaging US$26.0/kgV and US$21.2/kgV respectively, when compared to the Q2 2024 average of US$26.8/kgV and US$21.9/kgV, respectively.

§ Sales into the higher value markets, aerospace applications, speciality alloy and chemicals, and higher price markets (Nitro Vanadium in North America) continue to be prioritised.

ENDS

Enquiries: [e-mail]

Bushveld Minerals Limited		[phone]
Craig Coltman, Chief Executive Officer
SP Angel Corporate Finance LLP	Nominated Adviser & Joint Broker	[phone]
Richard Morrison / Charlie Bouverat
Grant Barker / Abigail Wayne
Hannam and Partners	Joint Broker	[phone]
Andrew Chubb, Matt Hasson, Jay Ashfield
Tavistock Communications	Financial PR
Gareth Tredway / Tara Vivian-Neal / James Whitaker		[phone]

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 

 

END