Final Results for the Year Ended 31 December 2020

RNS Number : 6178D

Bushveld Minerals Limited

30 June 2021

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

30 June 2021

Bushveld Minerals Limited

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

Full Year Results for the Period Ended 31 December 2020 & 2021 Guidance Update

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage provider, with ownership of high-grade assets in South Africa, is pleased to announce its full year results for the year ended 31 December 2020 and an update on 2021 guidance.

Annual Report

The Annual Report for the year ended 31 December 2020 will be available on the Company's website today at the following link: http://www.bushveldminerals.com/financial-reports/ . Physical copies of the Annual Report will be posted to shareholders who have elected to receive them, during the week commencing the 12^th of July 2021. A further announcement will be made by the Company once hard copies of the Annual Report have been despatched to shareholders.

FY2020 Operational and Financial Highlights

· An improved safety record achieving a Total Injury Frequency Rate ("TIFR") at Vametco of 18.21, an improvement of 22 per cent (2019: 23.49), and a TIFR of 5.26 at Vanchem.

· Record Group production of 3,631 mtV (2019: 2,931 mtV), primarily as a result of the inclusion of Vanchem for a full year.

· Record Group sales of 3,842 mtV (2019: 2,392 mtV), as a result of the full year contribution of sales volumes from Vanchem.

· Revenue of US$90.0 million, a 23 per cent reduction relative to 2019 (2019: US$116.5 million) as a result of a 52 per cent decline in the average realised price, partly offset by an increase in sales volumes.

· Group cost per unit sold of US$29/kgV (2019: US$37/kgV), reduction is supported by the dilution of fixed costs through the acquisition of Vanchem and increase in its production.

· EBITDA loss of US$14.9 million, (2019: US$32.6 million) largely due to a decline in vanadium prices, and partly offset by a reduction in other operating and administrative costs.

· Entered into a transaction with Orion Mine Finance under which we successfully secured US$65 million in funding. The financing provides support to the Group to achieve a steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a. by the end of 2022.

· Ended the year with cash and cash equivalents of US$50.5 million held at 31 December 2020 (2019: US$34.0 million).

· Continued progress in implementing the Company's strategy in the growing stationary energy storage sector through Bushveld Energy:

§ Successfully completed investments in Vanadium Redox Flow Batteries Original Equipment Manufacturers Invinity Energy Systems plc ("Invinity") and Cellcube.

§ Signed an electrolyte rental contract between Pivot Power, part of EDF Renewables, and Vanadium Electrolyte Rental Limited, a joint venture established with Invinity.

Post period events

· Group Unaudited cash and cash equivalent of approximately US$31.0 million as 27 June 2021.

· Successfully renegotiated the covenant testing terms required under the ZAR125 million Revolving Credit Facility ( " RCF " ).

§ Nedbank has agreed to waive the covenants for the June 2021 period and relax the December 2021 Group net debt to EBITDA ratio from 2.50 times to 4.0 times. A condition of the waiver is that the RCF is amortised by ZAR5 million (approximately US$0.3 million) per month from 6 August 2021, with a bullet payment of ZAR50 million (approximately US$3.4 million) due on the maturity date of 6 November 2022.

· Positive renegotiations with Duferco Participations Holding S.A ("Duferco") on the remaining balance US$11.5 million of convertible balance, to result in US$5 million being payable in November 2021 and the remaining US$6.5 million being converted into Bushveld shares .

· Commenced construction of the 200 MWh electrolyte plant in June 2021.

· Monetised investment in Invinity and realised approximately US$13 million.

2020 Summary:

US$ million (unless otherwise stated)	Year ended 31.12.20	Year ended 31.12.19	% Change
Vanadium Production¹ (mtV)	3,631	2,931	24
Sales volumes (mtV)	3,842	2,392	61
Average realised price (US$/kgV)	23.4	48.9	-52
Revenue (US$ million)	90	116.5	-23
EBITDA US$ million	(14.9)	32.6	-146
EPS (US cents)	(3)	5.51	-154
Net cash flow /(outflow) from operating activities	(17.1)	28.5	-160
Net cash / (Net debt)	(33.7)	(7.7)	337
Cash and cash equivalents	50.5	34.0	48.5

2021 Guidance

Bushveld Vanadium

· Group production guidance revised to between 3,400 mtV and 3,600 mtV.

§ As reported in the Q1 2021 operational update, Vametco's performance was impacted by slower than expected ramp up post the successful completion of the 35-day planned maintenance shutdown. There were more unforeseen mechanical breakdowns after start-up, followed by six-days of unprotected industrial action in April 2021 . Due to this:

o Vametco's 2021 guidance has been revised to between 2,300 mtV and 2,400 mtV, previously between 2,700 mtV and 2,850 mtV.

o Production cash cost (C1) has been revised to between US$23.7/kgV and US$24.20/kgV (ZAR339/kgV and ZAR345/kgV), previously US$20.0/kgV and US$21.30/kgV (ZAR320/kgV and ZAR340/kg).

§ Due to delays in securing steel supplies for the Kiln 3 refurbishment schedule, Vanchem's 2021 guidance has been revised to 1,100 mtV and 1,200 mtV, previously 1,400 mtV and 1,500 mtV.

o Production cash cost (C1) has been revised to between US$30.3/kgV and US$31.1/kgV (ZAR434/kgV and ZAR444/kgV) previously, between US$26.20/kgV and US$26.70/kgV (ZAR419/kgV and ZAR427/kg).

o Vamchem's capital expenditure for the year associated with the refurbishment programme has been revised to US$11.3 million, previously US$15.7 million with most of the cost being ZAR-denominated.

· The Company is to grow its vanadium production to a production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a. by the end of 2022, following completion of the refurbishment and ramp up of Kiln 3 at Vanchem, which is of a similar scale and capacity to Vametco, and will see Vanchem produce at an annual steady state production run rate 2,600 mtV.

· Pre-feasibility studies are under way at Vametco and Vanchem to increase Group production run rate to between 6,400 mtVp.a. and 6,800 mtVp.a. in the medium-term and to 8,400 mtVp.a. in the longer term. Completion of the studies in Q4 2021 will allow a capital efficient sequencing of the growth phases between Vametco and Vanchem.

· Implement the cost savings programme in order to achieve costs savings of approximately US$2.5 million to US$4 million per year, starting from 2022.

Bushveld Energy

· Progress construction of the electrolyte plant, with an initial 200 MWh capacity.

· Scale up the vanadium electrolyte rental product with new contracts.

· Support and fund the growth of Cellcube, together with the other shareholders.

· Attain financial close and commence construction of the Vametco hybrid mini-grid.

Group Capital Expenditure

· Capital expenditure expected for 2021 of approximately US$26.8 million, of which we have already spent US$8.6 million as at 31 May 2021, with most of the cost being Rand-denominated. The Capital expenditure includes the following

§ Vametco approximately US$6.0 million;

§ Vanchem approximately U$11.3 million; and

§ Bushveld Energy, approximately US$9.5 million, including the capital of Bushveld Electrolyte Company ("BELCO"), (principally funded by Bushveld Energy's partial asset sales of its Invinity shares in H1 2021.)

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:

"Following the completion of the Vanchem acquisition in November 2019, we began 2020 with a clear focus to integrate our operating assets, implement our new operating model designed to ensure adequate oversight over and extract the most synergies between our assets, even as we undertook the capital expansion projects to grow production at Vanchem and Vametco.

Yet early into the year the world found itself in the grip of a global COVID pandemic whose disruption of everything posed an existential threat to most businesses, ours included. Amidst the uncertainty and disruption that continues still, I am pleased to report that our comprehensive and agile response plan combined with the diligence and hard work of all Bushveld's employees, helped us find the balance between keeping our employees safe and ensuring business continuity. Better still we were able to report record Group production thanks to the inclusion of Vanchem production for a full year..

While 2020 witnessed depressed vanadium prices, we believed, as we still do, that the market fundamentals for vanadium are robust and supportive of price upside. This market view underscored our conviction to complete the acquisition of Vanchem even in the midst of a declining price. I am especially grateful that our positive outlook for vanadium and primary producers is shared by Orion Mine Finance with whom we completed a US$65 million funding agreement at the end of 2020. The funding secures our near-term growth plans and strengthened our balance sheet as we were able to retire the Nedbank term loan and repay half of the Duferco Participations Holding S.A ("Duferco") convertible loan note with cash and shares.

Notwithstanding the positive growth outlook for vanadium, operating conditions in 2020 were challenging as a consequence of not only a low price environment but also COVID-related disruptions to operations and global supply and logistics, significantly impacting production and costs. All of this contributed to a weak financial performance with a Group EBITDA loss of US$14.9 million. In this context, I am pleased that we have since successfully renegotiated the covenant testing terms required under the Nedbank ZAR125 million Revolving Credit Facility.

Our focus at an operational level is on attaining operational excellence at our assets. This is especially important at Vametco which has shown operational instability at the beginning of 2021. In this respect I am pleased to have welcomed Mr Francois Naude, who joined us at the start of 2021, as the Director of Operations. Supported by a sound technical team, Francois brings extensive operations turnaround experience and will play a key role in our quest to extract value from our operations.

Meanwhile, the need to prioritise operational stability at Vametco has necessitated a longer than usual 35 day maintenance shutdown in Q1 2021 and a downward revision of our targets for the plant's operating metrics in line with historically observed performance metrics, resulting in an unfortunate downward revision of production guidance for 2021. This effort has also seen us launch a comprehensive Group-wide cost review exercise to drive improved unit cost performance.

Our commitment to organic production growth remains, not only for its revenue growth proposition but also for its contribution to lowering our unit costs. Yet, in a capital constrained environment we must sequence the multiple expansion initiatives in a way that prioritises the cheapest next vanadium unit in our expansion initiatives, while promoting stability at our operations. This is the subject of current pre-feasibility studies underway at both Vametco and Vanchem. We will provide details on the production path and expected capital expenditure once the studies are concluded, which we expect to complete in Q4 2021.

At Bushveld Energy, the Company made great strides in growing the awareness and commercial competitiveness of VRFBs as a viable energy storage alternative. Our strategy to invest in VRFB manufacturing, which is designed to be a catalyst for mobilising financing to build scale among VRFB Original Equipment Manufacturers, has also been fruitful. Our US$5 million investment in AIM-quoted Invinity, whose creation we facilitated in 2020, delivered immediate benefits. Invinity has won several important contracts and its share price rose by more than 300 per cent in 2020. We have since crystallised our position and realised a total of approximately US$13 million.

Despite the challenges of the Covid pandemic, progress continued on our mini-grid project at Vametco, where Cellcube has been selected to supply a 4 MWh VRFB for the project. The project will demonstrate the business case of self generation solutions using PVsolar and VRFB systems at a time when the South African government is creating a supportive regulatory environment for self-generation, including lifting the cap for such projects being developed without a generation licence to 100MW from 1MW a few years ago.

In 2020, we started a process of developing our sustainability strategy, which will focus on Environment, Social and Governance ("ESG") principles. We will integrate material ESG considerations across the value chain into the business decision-making process; report on material ESG key performance indicators; and communicate a consistent message to stakeholders on key ESG commitments.

The successful acquisition of Vametco and Vanchem are important pillars in our brownfields growth strategy. With a combined acquisition cost for the two plants of approximately US$120 million and a growth capital expenditure of approximately US$30 million we now have the platform that will take the Group's steady state production run rate to between 5,000 mtVp.a. and 5,400 mtVp.a, from the projects currently being executed, with further growth ahead as more capex is spent. As importantly, we have funded this growth since 2016 with limited equity financing (through equity placing, convertible and warrant instruments) (approximately US$60 million) while the balance came from cashflows generated by the operations and debt funding. Our task now is to match the capital efficiency we have demonstrated in growing our asset base with operational efficiency- realising their full production capacity and competitive cost position. We are up to the task ."

Analyst conference call and presentation

Bushveld Minerals Chief Executive Officer, Fortune Mojapelo and Finance Director, Tanya Chikanza will host a conference call and presentation at 14:00 BST (15:00 SAST) today to discuss the 2020 full year results with analysts. Participants may join the call by dialling:

Tel: United Kingdom: +44 (0)330 336 9126; South Africa: +27 11 844 6054

Pin: 1720767

Alternatively, the presentation can be accessed as a webcast here:

https://webcasting.brrmedia.co.uk/broadcast/60d9897e0bb2806642d65b88

ENDS

Enquiries: info@bushveldminerals.com

Bushveld Minerals Limited		+27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive Officer
Chika Edeh, Head of Investor Relations

SP Angel Corporate Finance LLP	Nominated Adviser & Broker	+44 (0) 20 3470 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons

Peel Hunt Limited	Joint Broker	+44 (0) 20 7418 8900
Ross Allister / Alexander Allen

Tavistock	Financial PR
Charles Vivian / Gareth Tredway / Annabel de Morgan		+44 (0) 207 920 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 2020, the Company produced more than 3,600 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, from projects currently

being implemented. Beyond that, pre-feasibility studies are in progress to determine the optimal path to increase production even further to a steady state production run rate of between 6,400 mtVp.a. and 6,800 mtVp.a. in the medium-term and to a steady state production run rate of 8,400 mtVp.a in the long term.

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 .

Chairman's Statement

Dear Stakeholders,

There is no doubt that 2020 will be remembered for decades to come as a difficult period for everyone, and for some more than others.

It was also a year when responsibility came to the forefront. The responsibility of governments to look after their citizens, corporates to ensure the health and safety of their employees, and companies like Bushveld Minerals to ensure that the value of our tier-one assets were retained throughout the difficult period of the COVID-19 pandemic.

As a corporate citizen in South Africa, Bushveld Minerals' responsibilities run deep, starting with our local communities. The sustainability of our communities is intrinsically linked to the success and longevity of our operations.

I would like to applaud management for acting swiftly to protect our employees early and throughout the pandemic. Management halted operations, in line with the government's equally commendable measures, and applied strict health and safety protocols, including social distancing, sanitising, education and a revised shift system, once operations were restarted.

Vanadium prices were not excluded from the pandemic's effect on global growth, as prices of basic materials, including those needed for steel production, dipped initially, due to weakness in key markets.

Again, management must be commended for finding new sources of demand in China. The country emerged from the pandemic with a strong appetite for metals, and its demand was higher than in other parts of the world.

Late in 2020 and in the first half of 2021, we have seen vanadium prices continue to rise globally as growth returns after a year of lockdowns.

Prudently, the Board and management conducted an internal review of capital expenditure plans, ensuring the roll-out of these planned investments matched our ability to finance them and that they were not slowed down by short-term market dynamics.

We entered into a transaction with Orion Mine Finance, under which we successfully secured US$65 million in funding. The financing provides a structure that will support the Group to achieve a steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a. by the end of 2022. Studies are currently being conducted to determine the optimal way to deploy this capital for further growth to a steady state production run rate of between 6,400 mtVp.a. and 6,800 mtVp.a., which may include re-sequencing some of our capital projects. Our objective is to grow production in an efficient, sustainable manner, while avoiding any strain on our balance sheet.

This is not a race, but a journey, and we want to make certain that once we reach our goal, we can maintain our production rates for decades into the future.

In the year under review, we controlled our newest asset, Vanchem, for the full financial year. Vanchem diversifies our product mix and delivers key brownfield growth that we previously indicated was an important part of our strategy, given our vast resource in the ground.

Despite the unforeseen challenges of the past year, governments have recognised and embraced the opportunity to steer the world towards the clean energy transition faster than was previously evident. Many governments have put renewable energy and a focus on reduced emissions at the centre of their stimulus programmes.

In South Africa, the government has prioritised the need to resolve its energy supply crisis and it has taken some bold steps since the start of 2021. Several recent announcements are promising for the future of renewable energy and energy storage.

The first key announcement was confirmation by National Treasury that it had agreed with Eskom on an implementation plan and timelines for the restructuring of the utility. This will allow competition and cost transparency in electricity generation. The second key announcement was the increase in the threshold for self-generation without a licence from 10 MW to 100 MW, which will help to increase electricity supply, particularly from renewable resources. The third was the revival of the renewable procurement programme. This was halted in 2015 but re-prioritised under the 2019 Integrated Resource Plan. All three are important steps to increase competition in the power sector.

These developments support Bushveld Minerals' plans to develop its downstream operations beyond the production of end-use vanadium products, to become a key player across the renewable energy storage value chain. As we have repeatedly stated, the energy storage market presents a sizeable commercial opportunity for our Company. Our integrated strategy means we will not only benefit from the uptick in demand arising from this opportunity, but will also be able to participate meaningfully in the downstream sector.

As you know, we recognised this opportunity much earlier than most others and had already established a solid energy base. We were able to benefit from our investment in Invinity Energy Systems ("Invinity"), the London-listed entity that resulted from the merger between Avalon Battery Corporation and redT energy plc, as Invinity's shares gained appreciably in value after its re-listing in April 2020. It has subsequently secured several exciting sales contracts. Additionally, we invested into Cellcube as part of an investment consortium.

We have also made significant progress in our efforts towards self-generation at Vametco. We have developed a strong platform for externally-funded solar generation and Vanadium Redox Flow Battery ("VRFB") storage that will satisfy just under 10 per cent of Vametco's energy requirements and reduce its carbon footprint. This project is part of Bushveld's strategy to demonstrate the superior technical and economical merits of long-duration VRFB systems when paired with renewable energy, as the South African government relaxes regulatory hurdles around energy self-generation.

Another key responsibility for us is to our shareholders. While much of the regular in-person engagement with our investor base was impossible in 2020, our responsibility to ensure sustainable returns for the long term informed every decision we made. Despite a global event that no-one had prepared for, the business was managed appropriately through this challenging period.

To progress the Company so much under such constraints would have been impossible without the combined efforts of our people, who are essential to our success.

Although COVID-19 infections continue to rise by varying degrees in different countries, we are seeing signs of progress in the world's efforts to combat the pandemic through vaccination programmes, including South Africa. We will continue to prioritise the safety of our employees as we prepare the business for a global economic recovery and an acceleration of the new energy future, fuelled by governments' policies to encourage the transition.

I would like to thank Fortune and the entire Bushveld team for their efforts during a very challenging year.

Finally, I pay tribute to Dolly Mokgatle, our former non-Executive Director, who tragically passed away in early 2021. Dolly, was an established and highly- experienced business leader in South Africa, who will be sorely missed by all.

Ian Watson

Independent Non-Executive Chairman

Chief Executive Officer's Review

While COVID-19 was an unprecedented and unexpected challenge, I am pleased to say we have emerged from 2020 in a robust position. This reflects our pragmatic approach to the outbreak. We sought to keep our employees and communities safe, while building resilience and agility so that the Business could continue to operate while maintaining an appropriate growth outlook.

2020 overview

I would like to begin by expressing my deep gratitude to every individual within the Bushveld Group for their efforts to ensure that the Company survived 2020 relatively unscathed. Our comprehensive response to the COVID-19 pandemic, ably led by the COVID-19 Task Team we established, was only effective because our employees respected and followed the protocols that were prescribed.

Our response plan operated in a context of a laudable and decisive set of risk-adjusted actions by the government of South Africa, which included a series of lockdowns and several other measures that have helped the country weather the COVID storm. This enabled its people to return to some sense of normality and ordinary operating conditions far sooner than many other countries.

While COVID-19 was and is an unprecedented challenge, I am pleased to say we have emerged from 2020 in a robust position. This reflects our pragmatic approach to the outbreak. We sought to keep our employees and communities safe, while building resilience and agility so that the Business could continue to operate while maintaining an appropriate growth outlook.

This meant, in the short-term, prioritising:

• The health and safety of our employees, to prevent and minimise transmission of the virus in the workplace and at home. We implemented safety protocols in the workplace, including social distancing, supplying sanitisers, education about the virus, and restructuring the shift system. We supported our local communities by supplying water and sanitisers to local hospitals, police stations and care homes.

• Cash preservation, which entailed a review of all capital expenditure and the deferment of several growth initiatives until we had clarity on the expected impact of the pandemic on our operations and markets.

• Adapting our business to align with new operational realities, such as disrupted supply chains and logistics, to ensure we could still service our customers.

During the initial lockdown imposed by the South African government in late March 2020, we were able to maintain some scaled-down operations at Vametco. Vanchem was placed on care and maintenance. The re-start and ramp-up to normal production levels necessitated operational adjustments to accommodate social distancing, COVID-19 protocols and altered shifts for the implementation of certain projects. We continue to use an agile remote working set-up to ensure that all employees remain productive while we minimise any potential outbreaks in the workplace.

At the start of 2020, execution of our previously- announced growth strategy was well advanced.

This strategy included: the refurbishment programme at Vanchem and the planned expansion at Vametco, targeting an increase of production to 4,200 mtVp.a at both operations; construction of the electrolyte manufacturing plant in East London; and making investments in the Vanadium Redox Flow Battery ("VRFB") value chain. Due to the pandemic, we had to review some of our targets.

In the short-term, our decision to defer some planned growth capital expenditure was reinforced by a declining vanadium price. The vanadium price fell from approximately US$30/kgV to lows of circa US$20/kgV (London Metal Bulletin prices) in part due to the pandemic's disruptive impact on global commodities markets.

However, a review of the outlook for vanadium in a post-COVID world highlighted a stronger case for growth in the longer term driven by economic recovery in key global economies, several of whom embarked on fiscal programmes targeting infrastructure development and an accelerated energy transition investments, both of which are favourable for vanadium demand.

Our financial stress-testing indicated that the business was in a healthy position. However, prevailing market conditions meant we would need external funds to support our growth plans.

Towards the end of the year, we successfully closed a US$65 million financing arrangement with Orion Mine Finance ("Orion"), through a Production Financing Agreement and convertible loan note issue. The funding placed us in a strong position to maintain our growth strategy. Some of the funding was used to strengthen the balance sheet by partially retiring existing debt facilities. We ended the year with cash and cash equivalents of US$50.5 million.

During Q4 2020, as economies reopened, there was strong vanadium demand, not only from China, but also from some of our more traditional markets, such as the USA and Europe. This demand has continued into 2021.

Bushveld generated revenue of US$90 million on the back of sales of 3,842 mtV. However, we recorded an EBITDA loss of US$14.9 million due to a 52 per cent decline in the realised vanadium price.

Safety

We recorded 54 COVID-19 cases among our employees in 2020, all of whom have fully recovered. We are grateful, not only to our colleagues working hard to ensure compliance with our safety protocols, but also to the employees abiding by these protocols. Post year end, however, we were sad to record two fatalities due to COVID, underscoring the need to remain vigilant, even as the country's mass vaccination programme is set to pick up momentum in H2 2021.

Governments around the world are now well into the next phase of recovery, reinvigorating parts of the economy that have been severely affected, upping infrastructure spend, and focusing on those sub-sectors that have a prosperous future, such as the new energy transition. We are proud that the South African government is on the same path.

Despite the ongoing pandemic, we were pleased to achieve a Total Injury Frequency Rate ("TIFR") at Vametco of 18.21, an improvement of 22 per cent from 23.49 in 2019, and a TIFR of 5.26 at Vanchem. The safety of our workforce and all employees remains front of mind for us.

Bushveld Vanadium: operational performance

Production for the year was 24 per cent higher than in 2019, despite the challenging environment and 380 mtV of lost production due to the COVID-19 pandemic. The consolidation of Vanchem for a full-year period made up a large part of the production and sales volume increase. Sales volumes rose 61 per cent relative to 2019, owing to the addition of sales from Vanchem, as well as increased demand from customers during the second half of the year. In the early part of the year, we began diverting a larger portion of our sales to China, as the country's economy was one of the first to ease lockdown measures and re-start industrial production. During 2020, 23 per cent of our sales were to China, up from nine per cent in 2019. This is in line with the Company's strategy of increasing sales to higher-priced markets.

Strategic focus

Brownfield assets acquisition

We believe that vanadium market fundamentals significantly favour primary producers. We are thus pleased to have been able to acquire Vanchem in November 2019, following the acquisition of Vametco in 2017 and 2018. This puts Bushveld in a competitive position, as it owns two of the world's four operating primary processing plants. The acquisitions are part of a brownfields strategy we announced in 2016, which has seen the Company transform from an exploration to a Vanadium mining and processing company.

The combined acquisition cost for these two plants was approximately US$120 million. The capital expenditure of approximately US$30 million (including US$15 million in Environmental compliance related capital expenditure), will take the Group's steady state production run rate to between 5,000 mtVp.a. and 5,400 mtVp.a, from the projects currently being executed, such as the Vanchem kiln 3 refurbishment (Phase1). We achieved this growth by leveraging cashflows generated by the operations, debt funding and approximately US$60 million in equity financing (through equity placing, convertible and warrant instruments) since 2016.

Following these acquisitions, our main focus has been to refurbish and expand production at these assets, to integrate and operate them efficiently, and to maximise synergies between them. Maximising efficiencies also entails addressing the historic under-investment in maintenance at Vanchem and Vametco, which will deliver greater performance reliability. Where necessary, plant reliability will be prioritised ahead of growth.

Another key focus has been aligning the operations with the Group's operating model, culture and standards, and building the leadership team. Our operating model is based on having strategic control of our assets to ensure we can exercise sufficient oversight and strategic direction. This requires building the necessary capacity at head office, with a fit-for-purpose organisational design, appropriate technical skills, integrated business processes and establishing robust shared service functions to maximise efficiencies.

This is no small task for an operation with this depth of vertical integration in mining, crushing and milling, concentration, pyrometallurgy and hydrometallurgy.

Meanwhile, the continuing operation and growth of Vanchem necessitates securing its ore supply while the Mokopane project is being developed. With the ore stockpile acquired with the plant depleting, we anticipate replacing this supply with ore from Vametco, which has an abundant resource base.

Specifically, we have earmarked the Upper Seam portion of the Vametco resource through a targeted operation ("The Upper Seam Project"). With a reserve of 0.9 Mt of in-situ ore, the Upper Seam Project will supply Vanchem with 34 kt per month commencing in Q3 2021, removing the necessity of relying exclusively on third-party sources of ore over this period. The Upper Seam Project resource has similar mineralogy to the current ore used at Vanchem, and tests conducted to date have proven its suitability for processing at Vanchem.

The cost of supply to Vanchem will be in line with or better than third-party suppliers. This initiative will ensure that Vanchem has sufficient competitively-priced ore feedstock in the short to medium term, with no significant capital expenditure requirements. Since the total Upper Seam resource base is 16 Mt, we are investigating the potential to extend this source of supply beyond the initial 18 months.

Operational stability

We are mindful that over the years Vametco's performance has not met expectations. In 2020, its output would have been 2,954 mtV, if it were not for production lost through the effects of COVID-19. The plant did not undertake the standard annual shutdown in an effort to make up time. This resulted in significant operational instability, which caused several unscheduled stoppages during Q1 2021, prior to the 35-day maintenance shutdown.

Since the successful completion of the shutdown, operational stability and performance have improved. Sustaining this stability, however, requires a recalibration of Vametco's monthly production levels and a disciplined, proactive maintenance strategy over a period of time. As a consequence, the management team has revised the monthly production targets for Vametco to approximately 240 mtV per month, previously 270mtV. This changes Vametco's 2021 production guidance to between 2,300 mtV and 2,400 mtV, from previous guidance of between 2,700 mtV and 2,850 mtV. The run rate for the remaining months of 2021 is an annualised production of approximatively between 2,600 mtVp.a. and 2,700 mtVp.a.

We want to ensure that Vametco achieves sustainable and consistent output of 2,800 mtVp.a. before embarking on aggressive production growth.

Disappointingly, the commissioning of Vanchem's kiln 3, which is currently under refurbishment and the consequent production run rate increase of 2,600 mtVp.a. is likely to be delayed to the end of Q4 2021 owing to among others, delays in securing steel supplies. This requires revising 2021 production guidance to between 1,100 mtV and 1,200 mtV, previously between 1,400 mtV and 1,500 mtV. Overall, 2021 Group full-year production guidance has been revised to between 3,400 mtV and 3,600 mtV, previously between 4,100 mtV and 4,350 mtV.

We are also mindful of the increases in costs at Vametco over the past three years and have initiated a review of those costs to see where improvements are possible. Further detail is provided in the Finance Director's Statement.

We have not taken these decisions lightly. While we retain confidence in the plant's ability to produce above this level, our philosophy is that growth must be built on a foundation of robust, stable and efficient operations and must be pursued in a capital-efficient manner.

Capital projects sequencing

Notwithstanding the production revisions, our plans to grow output to 8,400 mtVp.a. in the long-term remain unchanged. During the current year, the studies on the Vametco Phase III expansion project and the Vanchem Phase II refurbishment will determine which project will be prioritised to achieve our production targets beyond our first production target. The decision will be guided by the principle of capital efficiency of 'securing the next-cheapest unit of vanadium'. As we are reviewing our production profile to achieve optimal sequencing between Vametco and Vanchem, the scope of the pre-feasibility study ("PFS") for Vametco has been extended. It is now expected to be completed in Q4 2021 together with the technical studies currently under way at Vanchem.

The stability of operations at Vanchem relative to Vametco and the emerging view, supported by studies, that expanding production at Vanchem is likely to be significantly cheaper than at Vametco, has helped shape a growth outlook that comprises:

• The current growth phase, which is being implemented, will see production increase to a steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a. by the end of 2022.

• This reflects Vametco and Vanchem operating at a steady state production run rate of 2,800 mtVp.a. and 2,600 mtVp.a., respectively. Vanchem's production is expected to increase from 1,100 mtV to a run rate of 2,600 mtV by the end of 2022, supported by the commissioning of Kiln 3 and associated downstream expansions.

• A second growth phase to increase production to a steady state production run rate of between 6,400 and 6,800 mtVp.a.

• A third growth phase to a steady state production run rate of 8,400 mtVp.a., when the rest of the expansion initiatives are implemented.

We will provide details on the production path and expected capital expenditure once the studies are completed.

Bushveld Energy

We are delighted to see the growing global momentum behind the energy transition away from fossil fuels to clean energy, especially renewable energy and energy storage in particular. An increasing number of countries are committing to reducing their carbon footprints and increasing the share of renewable energy in the power sector. The role of electricity continues to grow.

We are fortunate to be based in a country that has made bold decisions on this energy transition and has grown to be the sixth-largest residential energy storage market in the world. We expect it to grow into the global top five utility energy storage markets, with policies that catalyse deployment of more stationary energy storage systems. Moreover, growing interest in increasing the country's share of the value chain unlocks greater opportunities for local suppliers These developments validate our forward-thinking strategy, set in motion in 2014, to vertically integrate downstream into the energy storage sector, through the launch of Bushveld Energy in 2016. They come as we make significant progress across the three areas of focus for Bushveld Energy: electrolyte manufacturing, sales and rentals; deployment of VRFBs in Africa; and investments into VRFB manufacturing.

During the year we made progress on our plans to build an electrolyte manufacturing plant in East London, South Africa. With an initial capacity of 200 MWh of vanadium electrolyte and capacity to scale up to 800 MWh, the electrolyte plant will, be the largest announced plant outside China.

Our strategy to invest in VRFB manufacturing, which is designed to be a catalyst for mobilising financing to build scale among VRFB Original Equipment Manufacturers, has also been fruitful. Our investment in AIM-quoted Invinity Energy Systems Plc ("Invinity"), whose creation we facilitated in 2020, delivered immediate benefits. Invinity has won several important contracts and its share price rose by more than 300 per cent in 2020. We have since crystallised our position and realised a total of approximately US$13 million, providing a significant return on capital of more than double our initial investment of US$5 million, in just over a year.

With a right of first refusal for supply of vanadium and electrolyte, we have an attractive opportunity to develop a vanadium supply relationship with Invinity. Through a joint venture agreement with Invinity, we are now developing and deploying vanadium electrolyte rentals to Invinity's customers.

We also played a key role in partnering with other investors to acquire Cellcube, of which we now own 25.25 per cent indirect interest. Cellcube, the holding company for Enerox GmbH, an Austrian-based leading VRFB manufacturer, has a solid track record in manufacturing grid-scale energy storage systems.

As with Invinity, we have a right of first refusal to supply vanadium to Cellcube, creating more offtake potential for our vanadium and electrolyte products and hedging against future volatility in vanadium prices, as the VRFB market develops.

Despite the challenges of the Covid pandemic, progress continued on our mini-grid project at Vametco, where Cellcube has been selected to supply a 4 MWh VRFB for the project. The solar PV and storage project will save nearly 114,000 tonnes of CO2 over its 20 year. The mini-grid provides an important proof of concept for self-generation solutions in a country that has made firm commitments to establish a supportive framework for self-generation. In the latest development, the threshold for self-generation without a licence will be lifted from 10 MW to 100 MW, unlocking faster growth in behind-the-meter generation and storage.

Sustainability: Value beyond compliance

We also initiated the process of developing an ESG Management System ("EMS"). The purpose of the EMS is to provide the framework to enable Safety, Health and Environmental ("SHE") and social risks to be understood, and to develop, implement and appropriately manage mitigation measures.

Collectively, the ESG strategy and management system will assist us to comply with relevant authorisations, legal requirements, the International Finance Corporation Standards and other obligations, in a systematic and structured framework.

We are especially proud that, through vanadium, we play an important role in global decarbonisation efforts.

• In steel - the use of vanadium as an alloying element will reduce the intensity of steel in construction, resulting in a reduced carbon footprint for steelmaking.

• Through VRFBs, vanadium plays a key role in supporting the global energy transition to a greener mix, which is fast gaining momentum.

Through a commitment to developing renewable energy based energy generation solutions we will also ensure that our production platform has a favourable carbon footprint.

Finally, through the innovative electrolyte rental solutions that we are developing and implementing, not only will we help to accelerate the adoption of VRFBs, but also help advance the circular economy by ensuring vanadium is re-used through multiple life-cycles.

Johannesburg Stock Exchange listing

We continue to monitor market conditions and engage with South African institutional investors. However, because of the unforeseen events of 2020, we had to redirect much of our focus towards dealing with the pandemic, prioritising the safety of employees, and focusing on managing our operations. This included securing US$65 million from Orion. The Company remains interested in the potential listing and will continue to explore the opportunity to do so when conditions are suitable.

Appointments and integration

In 2019, we adopted our new operating model. Overall, we remain on course to roll it out across the Group, in spite of the setbacks of 2020. This is a key step in ensuring that we have sufficient organisational capacity to support our growth plans.

Our priority in 2020 was to manage the impact of COVID-19, while keeping a firm handle on initiatives

to build critical organisational capacity. We are pleased to report that some of the work that was already under way to implement the operating model has contributed to our ability to manage the COVID-19 challenges more effectively. The model was primarily designed to help us achieve operational excellence, by ensuring that our business operations have sufficient support and that we can achieve greater integration across the various parts of the Group.

We have made significant strides in building our organisational capacity. We will continue to do so, focusing on human capital, financial resources, the operating model, and business processes and systems.

As one of our initiatives to enhance our operational performance, we announced the appointment of Francois Naude as Director of Operations. Francois brings over 27 years of mining and processing experience and he will oversee the Vametco, Vanchem and Bushveld Electrolyte Company ("BELCO") operations, with the latter, migrating to the Bushveld Vanadium platform. The appointment is key to our operational strategy.

The Operations Director's mandate covers the following key parameters: meeting the Company's production volume aspirations; achieving cost targets; meeting

SHE objectives; maintaining our social licence to operate; and effectively implementing capital projects on budget and in time.

Looking forward

Our emphasis in 2021 is on achieving consistent operational stability, enhancing operational performance and ensuring that both Vametco and Vanchem achieve their near- and medium-term production and cost targets, with optimal efficiency. Francois and his team have already made significant headway, prioritising operational stability and reliability, especially at Vametco.

While we are always mindful of achieving our growth targets, we believe it is more prudent to invest efficiently. This could necessitate resequencing our capital projects and potentially revising development timelines. I am confident that we now have in place a sound technical leadership team to ensure we succeed.

Through Bushveld Energy we have championed the place of VRFBs in the growing energy storage space. Not only did we have the foresight to see the opportunity, we also developed an appropriate and agile strategy for vertical integration along the value chain that we are pleased to see other vanadium producers adopting. Some of our key focus items are construction of the 200 MWh electrolyte plant, which commenced in June 2021, and obtain a generation licence. Furthermore, we intend to achieve financial close on, and begin construction of the Vametco hybrid mini-grid.

Overall, fundamentals for the vanadium market remain strong, characterised by a growing intensity of use of vanadium in steel. We expect governments across the world to adopt similar policies to those of China, by increasing infrastructure spending to revive and support their economies post-COVID. The energy transition will continue, resulting in greater renewable and energy storage deployment, in which VRFBs are expected to capture a significant market share, increasing vanadium demand. We retain the view that vanadium supply remains constrained and concentrated. All these factors benefit primary vanadium producers such as Bushveld Minerals.

We remain fully committed to our vertically-integrated growth strategy of achieving our long-term production of 8,400 mtVp.a. while becoming a leader in the downstream VRFB industry.

Once again, I would like to thank all of our employees and investors for continuing to believe in Bushveld, despite an uncertain and difficult year. We have begun 2021 in a solid position, benefiting from increased vanadium demand and higher prices, as the world economy recovers and accelerates its adoption of new energy sources. We have reason to look forward to the future with great optimism.

Fortune Mojapelo

Chief Executive Officer

Finance Director's Review

Overview

The 2020 financial year was a difficult year operationally due to the impact of the COVID-19 pandemic, which resulted in 380 mtV in lost production, as well as additional costs associated with adapting our work practices to ensure our workplaces were safe for us to continue to operate, following the first South African Covid-19 nationwide lockdown.

Group production nevertheless increased by 24 per cent to 3,631 mtV, as Vanchem operated for a full 12 months under the Bushveld Group umbrella, underscoring the importance of our acquisition. Group sales increased by 61 per cent to 3,842 mtV, despite the COVID-19 logistical challenges. This was a significant achievement, which also reflects the inclusion of Vanchem's sales for the full financial year, and increased customer demand in H2 2020.

Group

Unit

2020

2020 vs

2019

Sales

mtV

3,842

61%

Average realised price

US$/kgV

23.4

-52%

The financial benefits of this performance were significantly diluted by market factors, as the decline in vanadium prices experienced in the second half of 2019 persisted throughout 2020. Year-on-year, realised prices declined by approximately 52 per cent, consequently eroding Group profitability and cashflows.

The Group reported revenue of US$90 million (2019: US$116.5 million), and an Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") loss of US$14.9 million (2019: EBITDA of US$32.6 million).

The Group put in place several measures to conserve cash and protect the balance sheet in light of the uncertain operating environment. We scaled back on our planned capital expenditure, optimising our capital allocation process to preserve cash. From a cost perspective, we continued to focus on cost containment even as we integrated the two operations. We expect to realise synergies in areas such as the shared procurement platform we established, as we progress. The Group's focus and early wins on cost containment is illustrated later in this report under the Cost of sales section.

Administrative expenses were reduced by US$4.9 million to US$19.8 million (2019: US$24.7 million) as a result of cash preservation measures implemented by the Group. These costs are further analysed in the administration cost section. Net cash from operating activities was an outflow of US$17.1 million (2019: US$28.5 million), mainly driven by the decline in price.

Despite uncertain market conditions, we successfully secured US$65 million of funding from the mining- focused investment business, Orion Mine Finance ("Orion"). The Group ended the year with a strong cash balance of US$50.5 million (2019: US$34.0 million).

Orion: US$65 million financing package

In November 2020, the Company announced that it had successfully completed and drawn down on a US$65 million financing package from Orion. The funding comprised a US$30 million Production Financing Agreement and a US$35 million convertible loan note. Part of the proceeds were used to retire the Nedbank ZAR250 million term loan, repay US$5 million of the Duferco loan notes, plus interest of US$1.28 million, as well as to fund capital projects in Bushveld Vanadium.

Analysis of results

Income statement summary as adjusted from "statutory" primary statement presentation.

	US$	US$
	2020	2019
Revenue	89,988,078	116,514,112
Cost of sales	(73,394,608)	(47,828,763)
Other operating and
administration costs	(31,534,410)	(36,043,392)
EBITDA	(14,940,940)	32,641,956
Depreciation	(17,866,153)	(10,388,145)
Operating (loss)/profit	(32,807,093)	22,253,811
Gain on bargain purchase -
Vanchem		60,586,633
Net financing expense	(4,654,258)	1,923,687
Other non-operating costs	(206,066)	(1,510,572)
Profit before tax	(37,667,417)	83,253,558
Income tax charge	484,654	(14,005,965)
Profit after tax	(37,182,763)	69,247,593

Revenue

Revenue for the Group was US$90.0 million (2019: US$116.5 million). Group sales in 2020 amounted to 3,842 mtV at an average price of US$23.4/kgV and an average exchange rate of ZAR16.46 to the US dollar (2019: 2,392 mtV, average price US$48.7/kgV, average exchange rate of ZAR14.5 US dollar). The geographic split of Group sales in 2020 was 34 per cent to the United States, 24 per cent to Europe, 23 per cent to China and 19 per cent to the rest of the World. Sales to China in 2020 were significantly higher than the nine per cent achieved in 2019, in line with our strategy of creating sufficient flexibility in the business to enable the Group to increase sales to higher-priced regions.

Cost of sales

The cost of sales excluding depreciation for the period was US$73.4 million (2019: US$47.8 million). The increase is partially attributable to the inclusion of Vanchem for the full financial year as well as increase in areas such as energy and maintenance costs at Vametco.

The material cost benefits of increasing production are illustrated in the table below, which shows that our strategy of growing production through the acquisition of Vanchem and increasing its production has resulted in a lower Group cost of US$29/kgV (including sustaining capital) relative to 2019 (2019: US$37/kgV) as a result of the dilution of fixed costs. The effects of the bargain purchase of US$60.6 million have been excluded from the calculation below as it is a once off in nature and did not contribute cash to the bottom line performance of the business in 2019. We expect to see continued cost reductions as the Group continues to embed synergies across Vametco and Vanchem and grow production organically.

	2020	2019
Total Cost Cost of sales (direct)	(73,394,608)	(47,828,763)
Operating costs and admin	(31,534,410)	(36,043,392)
Other non-operating costs	(206,066)	(1,510,572)
Total income statement cost excl. depreciation	(105,135,084)	85,382,727
Total units sold	3,842	2,392
Cost income statement per unit produced (excl. depreciated) US$/KgV	27	36
Sustaining Capital	(5,375,610)	(3,652,977)
Total cost including sustaining capital	(110,510,694)	(89,035,704)
Cost per unit sold including sustaining capital US$/kgV	29	37
Total Revenue
Revenue	89,988,078	116,514,112
Average price realised	23	49

Cost-saving initiative

To ensure that Bushveld Minerals remains competitive at a lower vanadium price and reaps the benefits of a higher commodity price, the Group has introduced a cost- savings programme ("CSP"). The CSP is aimed at ensuring continued competitiveness throughout the commodity cycle, while enhancing the offering to markets across all the industries in which we compete. We are targeting cost-saving initiatives across the Group, with procurement as the first priority. Our objective is to cut costs by approximately US$2.5 million to US$4 million per year, starting from 2022.

Other operating and administration costs Other mine operating costs included community, social and labour plan costs at Vametco and Vanchem. Even though the Group as a whole was not profitable, mainly driven by the poor vanadium price, the Group still maintain its social commitments and obligations. The idle plant costs of US$4.2 million (2019:US$2.9 million) mainly reflects the 21-day shutdown, as a result of the South African COVID-19 nationwide lockdown during the first half of 2020.

Group administrative expenses reduced by US$4.9 million to US$19.8 million (2019: US$24.7 million), due to our effective cost control measures. The overall effectiveness of the containment can also be noted with the full year of administrative costs associated with the Vanchem site fully absorbed whilst still delivering a reduction in the administrative costs when compared to 2019.

Administrative expenses included staff salaries of US$8.1 million (2019: US$9.6 million) for both the operations and head office administration and management staff. Since the costs are not directly attributable to the cost of production, they are recoded under administrative expenditure based on industry practice. The operation salaries amounted to US$4.7 million (2019: US$5.7 million), whilst the shared service and change to head office division (including directors fees), amounted to US$3.5 million (2019: US$3.8 million). The reduction in overall salary costs was as a result of one-off costs incurred in 2019 associated with Vametco legacy staff offset by a slight ramp up in staff costs for Vanchem and capacity building of the Shared Service departments professional fees of US$8 million (2019: US$7.6 million), are mainly attributable to the costs associated with the Orion transaction as well as other Bushveld Energy corporate development initiative such as Invinity and Cellcube that were implemented in the year.

Other costs incurred related to additional overheads on establishing the Vanchem administrative departments as well as the general security and maintenance of the sites.

The EBITDA reconciliation shown below illustrates the impact of the decline in the vanadium price from the prior year. Operating costs increased due to the Vanchem operations running for the full year, this was offset by a declined in the mineral royalty payable relative to sales prices. The royalties are paid by Vametco at the Unrefined Rate of 0.5 + { EBIT / (Gross Sales x 9) } x 100 with a seven per cent maximum royalty percentage payable on unrefined minerals.

	US$
2019 EBITDA	32,641,956
Revenue changes	(26,526,033)
Operating cost changes	(30,029,571)
Inventory movement	8,972,708
2020 EBITDA	(14,940,940)

Balance sheet Assets

Total current assets increased during the year as a result of the increase in value of financial assets US$22.4 million (2019 US$1.9 million) which related to the investments made in Invinity Energy Systems ("Invinity") and Cellcube. Refer to note 21 of the financial statements for further detail. The other material increase was as a result of the Group cash and cash equivalents of US$50.5 million (2019: US$34.0 million) due to the Orion financing package offset by the settlement of the Nedbank term debts as well as other borrowing obligations.

Non-current assets related to intangibles and property, plant and equipment remained consistent to the prior year and changes were mainly as a result of depreciation in the year. A deferred tax asset was raised for the assessed loss incurred during the year, (refer to note 16 for further details).

Equity and liabilities

Total current and non-current liabilities increased by US$48.2 million due to the Orion production financing agreement and convertible loan notes, offset by the repayment of the Nedbank term loan. The trade and other payable also contributed to the increase as a result of Vanchem coming online for the full year and the additional trade balance required as a result.

The share capital balance also increased as a result of the Duferco convertible loan note which was exercised at the end of the financial year.

Net debt

The net debt reconciliation below outlines the Group's total debt and cash position.

	US$	US$
Gross Cash and Cash Equivalent	50,540,672	34,011,557
Nedbank Term Loan and Revolving Credit Facility	(8,636,535)	(18,071,342)
Convertible Loan Notes - Duferco	(11,585,068)	(23,173,288)
Production Financing Agreement - Orion Mine Finance	(30,105,886)	-
Convertible Loan Notes Instrument - Orion Mine Finance	(33,073,699)	-
Other	(845,588)	(511,522)
Net Debt	(33,706,104)	(7,744,595)

Cash flows

Net cash outflow from operating activities for the year were (US$17.1 million), a decrease of US$45.6 million compared with 2019, driven by reduced profitability on the back of sustained low vanadium prices. Capital expenditure and investing activities for the year were US$13.3 million, a decrease of US$36.4 million from 2019 mainly due to the cash preservation measures implemented during the year.

Cash generation

The table below summarises the main components of cash flow during the year.

	US$	US$
	2020	2019
Operating (loss)/profit	(32,807,093)	22,253,811
Depreciation and amortisation	17,866,153	10,388,145
Changesinworkingcapital and provisions	1,253,029	4,586,737
Taxes Paid	(3,452,492)	(8,767,312)
Cash flow from operations	(17,140,404)	28,461,381
Sustaining capital	(5,375,610)	(3,652,977)
Free cashflow	(22,516,014)	24,808,404
Cash from other investing activities	(7,943,222)	(46,077,866)
Financing activities	47,433,269	13,287,374
Cash (outflow)/inflow	16,974,034	(7,982,088)
Opening net cashflow	34,011,557	42,019,123
Foreign exchange	(444,919)	(25,478)
Closing net cash	50,540,672	34,011,557

Investing activities

Investing activities were driven by capital expenditure growth with property plant and equipment expenditure of US$3.9 million, as well as a payment made for the deferred consideration owed to Evraz of US$1.7 million. Investment in Cellcube of US$1.9 million, and US$1.5 million spent on intangibles. The costs were offset by finance income to the tune of US$1 million for the year.

Financing activities

Financing activities of US$47.4 million include the US$65 million Orion financing package and approximately US$8 million from the Nedbank revolving credit facility. This was partially offset by the US$5 million repayment of the US$23 million unsecured convertible note held by Duferco plus interest of US$1.28 million in cash. The balance of US$6.5 million which was also due for repayment was settled by the issue of 37,115,210 new Bushveld shares. The Nedbank term loan of R250 million US$17 million was also fully retired.

Financial risk management

The main financial risks faced by the Group relate to the availability of funds to meet business needs (liquidity risk), the risk of default by counterparties to financial transactions (credit risk), fluctuations in interest and foreign exchange rates and commodity prices. These factors are more fully outlined in the notes to the accounts. They are important aspects to consider when addressing the Group's going concern status, particularly in the context of the COVID-19 pandemic. We are proactively managing the risks within our control. There are, however, factors which are outside the control of management, specifically volatility in the ZAR:USD exchange rate as well as the vanadium price, which we do not currently hedge and which can have a significant impact on the Business.

Going concern and outlook

We manage liquidity risk by ensuring that the Group has sufficient funds for all ongoing operations. Our philosophy is to maintain a low level of financial gearing, given exposure to the vanadium price and exchange rate fluctuations.

As part of the annual budgeting and long-term planning process, the Group's budget and cashflow forecasting is reviewed and approved by the Board. The forecast is amended in line with any material changes identified during the year. Equally, where funding requirements are identified from the cashflow forecast, appropriate measures are taken to ensure these requirements can be satisfied. In particular, a capital allocation framework is applied which prioritises maintenance, critical and regulatory capital funding requirements.

We also closely monitor liquidity risk. We regularly produce cash forecasts and analyse sensitivities to different scenarios, including, but not limited to, changes in commodity prices and different production profiles from the Group's producing assets.

The Nedbank debt facility available to Vametco is subject to financial covenants which are EBITDA-driven. After year end, in light of the weak vanadium price during H2 2020 and the low production volumes now expected for H1 2021, as a result of the 35-day maintenance shutdown and the unprotected industrial action at Vametco, we proactively engaged Nedbank. This enabled us to successfully renegotiate the covenant testing terms required under the ZAR125 million Revolving Credit Facility ("RCF"). Nedbank has agreed to waive the covenants for the June 2021 period and relax the December 2021 Group net debt to EBITDA ratio from 2.50 times to 4.0 times. A condition of the waiver is that the RCF is amortised by ZAR5 million (approximately US$0.3 million) per month from 6 August 2021, with a bullet payment of ZAR50 million US$3.4 million) due on the maturity date of 6 November 2022.

Since year-end, renegotiations of the Duferco convertible balance of US$11.5 million have been positive and near conclusion. This would result in US$5 million being payable in November 2021 and the remaining US$6.5 million being converted into Bushveld shares.

Post year end, the investment in Invinity was realised, resulting in capital appreciation of some 160 per cent. The proceeds of the sale were used towards Bushveld Energy's 2021 projects, including its investment in Cellcube, as explained in the CEO's Review.

As mentioned in the CEO's Review, we are evaluating the Group' growth production sequencing and funding requirements for all operations in order to determine the ideal production sequencing to achieve our targets. Details on the Group's production path and funding will be provided on completion of technical studies currently underway at Vametco and Vanchem.

Although the start of the 2021 financial year has been challenging, we are encouraged by the positive production run rate at Vametco post-maintenance and by the upward vanadium pricing trajectory that we have seen to date.

Vanchem is expected to make EBITDA losses for the rest of the year, but this situation is expected to reverse after the growth capital spending, as it will enable Vanchem to ramp up production to a sustainable steady state production run rate of approximatively 2,600 mtVp.a. by the end of 2022. Beyond 2021, the Group is expected to benefit from the synergies of running both operations, as the combined production from Vametco and Vanchem will contribute to the Group's fixed costs.

Looking forward, we will continue to prudently manage costs and conserve cash, as long as uncertainty lingers over the global health and possible economic consequences of COVID-19, even though COVID-19 vaccine programmes are being implemented globally.

The vanadium price was impacted in 2020 by lower global demand due to the COVID-19 pandemic. Prices have significantly improved from their lows of 2020 and are currently trading above US$40/kgV, supported by various fiscal stimulus measures, which are expected to drive demand for raw materials.

We will continue to prioritise financial stability through cost containment, conserving cash and adhering to a clear capital allocation framework, to ensure the Group's resilience through the operating cycle.

Tanya Chikanza

Finance Director

Bushveld Minerals Limited

(Registration number 54506)

Consolidated Financial Statements for the year ended 31 December 2020

Consolidated Statement of Profit or Loss and Other Comprehensive Income

	Note	2020 US$	2019 US$
Continuing operations
Revenue	5	89,988,078	116,514,112
Costofsales		(91,260,760)	(56,198,919)
Gross (loss) profit		(1,272,682)	60,315,193
Otheroperatingincome		2,304,528	922,385
Sellinganddistributioncosts		(4,828,710)	(7,556,687)
Othermineoperatingcosts		(4,699,892)	(3,865,303)
Idleplantcosts		(4,152,153)	(2,893,286)
Share-basedpayment		(375,008)	-
Administrationexpenses	6	(19,783,176)	(24,668,491)
Operating (loss)/profit		(32,807,093)	22,253,811
Financeincome	9	1,077,991	3,593,142
Financecosts	10	(5,732,249)	(1,669,456)
Gainonbargainpurchase	8	-	60,586,633
Movement in earnout estimate	26	(206,066)	(1,510,572)
(Loss) profit before taxation		(37,667,417)	83,253,558
Taxation	11	484,654	(14,005,965)
(Loss)profitfortheyear		(37,182,763)	69,247,593
Consolidated other comprehensive income:
Itemsthat maynot be reclassified to profit or loss:
Changesinthefairvalueoffinancialassetsatfairvaluethroughothercomprehensiveincome	21	13,483,194	(359,045)
Other fair value movements		103,448	110,175
Total items that maynot be reclassified to profit or loss		13,586,642	(248,870)
Itemsthat maybe reclassified to profit or loss:
Currency translationdifferences		(10,425,238)	6,413,737
Totalcomprehensive(loss)incomefortheyear		(34,021,359)	75,412,460
(Loss) profit attributable to:
Owners of the parent		(36,680,615)	61,968,301
Non-controllinginterest		(502,148)	7,279,292
		(37,182,763)	69,247,593
Total comprehensive (loss) income attributable to:
Owners of the parent		(32,640,348)	67,136,957
Non-controllinginterest		(1,381,011)	8,275,503
		(34,021,359)	75,412,460
Earnings per share
Profit per ordinaryshare
Basic(loss)/earningspershare(cents)	12	(3.00)	5.51
Diluted(loss)/earningspershare(cents)	12	(3.00)	5.45
		-	-

Consolidated Statement of Financial Position
	Note	2020 US$	2019 US$
Assets
Non-CurrentAssets
Intangibleassets	13	59,003,825	59,408,821
Property,plant and equipment	14	167,579,993	185,269,063
Investmentproperty	15	2,811,017	2,905,449
Deferred tax	16	5,085,154	173,892
Financialassets-investments	17	-	4,420,891
Total Non-Current Assets		234,479,989	252,178,116
CurrentAssets
Inventories	18	34,081,625	35,082,342
Trade and other receivables	19	10,425,363	4,516,287
Restrictedinvestment	20	3,111,465	6,605,465
Current tax receivable		814,067	493,178
Financialassetsatfairvalue	21	22,452,877	1,952,227
Cashandcashequivalents	22	50,540,672	34,011,557
Total Current Assets		121,426,069	82,661,056
Total Assets		355,906,058	334,839,172
Equityand Liabilities
Sharecapital	23	15,858,428	15,357,271
Sharepremium	23	117,065,907	111,067,064
Retainedincome	23	46,734,823	83,415,438
Share-based payment reserve		375,008	-
Convertible loan note reserve		54,814	-
Foreigncurrencytranslationreserve	23	(11,202,236)	(1,655,861)
Fair value reserve	23	12,966,294	(620,349)
Equityattributable to owners of the parent		181,853,038	207,563,563
Non-controllinginterest		32,146,712	33,527,723
Total Equity		213,999,750	241,091,286
Liabilities
Non-Current Liabilities
Post-retirementmedicalliability	24	2,076,023	2,331,325
Environmentalrehabilitationliability	25	17,998,366	17,844,066
Deferredconsideration	26	1,802,884	7,108,819
Loans	27	1,597,972	-
Borrowings	28	70,909,370	41,756,152
Leaseliabilities	29	4,376,483	4,677,338
Total Non-Current Liabilities		98,761,098	73,717,700

ConsolidatedStatementofFinancialPosition
	Note(s)	2020 US$	2019 US$
Current Liabilities
Trade and other payables	30	22,065,601	15,809,996
Provisions	31	3,296,894	3,432,619
Borrowings	28	13,337,406	-
Leaseliabilities	29	625,661	787,571
Deferredconsideration	26	3,819,648	-
Total Current Liabilities		43,145,210	20,030,186
Total Liabilities		141,906,308	93,747,886
Total Equityand Liabilities		355,906,058	334,839,172

Consolidated Statement of Changes in Equity

	Share capital	Share	Foreign	Share-based	Convertible	Fair	Retained	Total	Non-	Total equity
		premium	exchange	payment	loan note	value	income	attributable to	controlling
	US$	US$	translation reserve US$	reserve US$	reserve US$	reserve US$	US$	equityholders of the group /companyUS$	interest US$	US$
Balance at 01 January2019	14,921,079	101,003,256	(7,073,387)	-	-	(371,479)	21,447,137	129,926,606	29,712,446	159,639,052
Profit for the year	-	-	-	-	-	-	61,968,301	61,968,301	7,279,292	69,247,593
Other comprehensive income, net of tax:Currency translationdifferences	-	-	5,417,526	-	-	-	-	5,417,526	996,211	6,413,737
Fairvaluemovementon investments	-	-	-	-	-	(359,045)	-	(359,045)	-	(359,045)
Other fair value movements	-	-	-	-	-	110,175	-	110,175	-	110,175
Totalcomprehensiveincomefortheyear	-	-	5,417,526	-	-	(248,870)	61,968,301	67,136,957	8,275,503	75,412,460
Transaction with owners:Issueofshares	436,192	10,063,808	-	-	-	-	-	10,500,000	-	10,500,000
Dividendspaidtonon-controllinginterest	-	-	-	-	-	-	-	-	(4,460,226)	(4,460,226)
Balance at 01 January2020	15,357,271	111,067,064	(1,655,861)	-	-	(620,349)	83,415,438	207,563,563	33,527,723	241,091,286
Loss fortheyear	-	-	-	-	-	-	(36,680,615)	(36,680,615)	(502,148)	(37,182,763)
Other comprehensive income, net of tax:Currency translationdifferences	-	-	(9,546,375)	-	-	-	-	(9,546,375)	(878,863)	(10,425,238)
Fairvaluemovementon investments	-	-	-	-	-	13,483,194	-	13,483,194	-	13,483,194
Other fair value movements	-	-	-	-	-	103,449	-	103,449	-	103,449
TotalcomprehensiveLossfortheyear	-	-	(9,546,375)	-	-	13,586,643	(36,680,615)	(32,640,347)	(1,381,011)	(34,021,358)
Transaction with owners:Issueofshares	501,157	5,998,843	-	-	-	-	-	6,500,000	-	6,500,000
Share-basedpayment	-	-	-	375,008	-	-	-	375,008	-	375,008
Equitycomponentofconvertibleloannote	-	-	-	-	54,814	-	-	54,814	-	54,814
Balance at 31 December 2020	15,858,428	117,065,907	(11,202,236)	375,008	54,814	12,966,294	46,734,823	181,853,038	32,146,712	213,999,750

ConsolidatedStatementofCashFlows
	Notes	2020 US$	2019 US$
Cash flows from operating activities
(Loss)/profit before taxation		(37,667,417)	83,253,558
Adjustments for: Depreciationproperty,plantandequipment	14	17,866,153	10,388,145
Gainonbargainpurchase	8	-	(60,586,633)
Movement in earnout estimate	26	206,066	1,510,572
Financeincome	9	(1,077,991)	(3,593,142)
Financecosts	10	5,732,249	1,669,456
Changes in working capital		1,253,029	4,586,737
Income taxes paid		(3,452,492)	(8,767,312)
Net cash from operating activities		(17,140,403)	28,461,381
Cash flows from investing activities
Financeincome	9	985,901	3,593,142
Acquisitionofbusiness	8	-	(30,713,500)
Purchaseofproperty,plantandequipment	14	(9,269,924)	(13,320,897)
Paymentofdeferredconsideration	26	(1,680,459)	(3,600,000)
Purchaseofinvestments	17&21	(1,883,208)	(4,420,891)
Purchaseof exploration and evaluation assets	13	(1,471,142)	(1,268,697)
Net cash from investing activities		(13,318,832)	(49,730,843)
Cash flows from financing activities
Netproceedsfromloans	27	1,597,972	-
Financecosts		(3,115,205)	(108,596)
Net proceeds / (repayment) of borrowings	28	49,417,161	18,582,864
Leasepayments		(753,302)	(726,668)
Dividends paid		-	(4,460,226)
Disposaloffinancialassetsheldatfairvalue		286,643	-
Net cash from financing activities		47,433,269	13,287,374
Totalcashmovementfortheyear		16,974,034	(7,982,088)
Cashatthebeginningoftheyear		34,011,557	42,019,123
Effectoftranslationofforeignrate		(444,919)	(25,478)
Totalcashatendoftheyear	22	50,540,672	34,011,557

Notes to the Consolidated Financial Statements

1. Corporate information and principal activities

Bushveld Minerals Limited ("Bushveld") was incorporated and domiciled in Guernsey on 5 January 2012 and admitted to the AIM market in London on 26 March 2012.

The address of the Company's registered office is Oak House, Hirzel Street, St Peter Port, Guernsey, GY1 3RH. The consolidated financial statements of the Company as at and for the year ended 31 December comprise of the Company and its subsidiaries (The "Group") and the Group's interest in equity accounted investments.

As at 31 December 2020, the Bushveld Group comprised of:

Company		Note Equityholding and voting rights	Country ofincorporation	Nature of activities
Bushveld Minerals Limited		N/A	Guernsey	Ultimateholdingcompany
BushveldResourcesLimited	1	100%	Guernsey	Holdingcompany
IvantiResources (Pty) Limited	2	100%	SouthAfrica	Miningandmanufacturingcompany
PamishInvestments No39(Pty)Limited	2	64.00%	SouthAfrica	Mining
AmarakaInvestments No 85 (Pty)Limited	2	68.50%	SouthAfrica	Vanadium and iron ore exploration
Bushveld Minerals SA (Pty) Limited	2	100%	SouthAfrica	Groupsupportservices
Bushveld Vanchem (Pty) Limited	13	100%	SouthAfrica	Processingcompany
Great 1 Line Invest (Pty) Limited	2	62.5%	SouthAfrica	Vanadium and iron ore exploration
Gemsbok Magnetite (Pty) Limited	2	74%	SouthAfrica	Vanadium and iron ore exploration
Caber Trade and Invest 1 (Pty) Limited	2	51%	SouthAfrica	Vanadium and iron ore exploration
BushveldVanadium2 (Pty) Limited	2	100%	SouthAfrica	Holding company
Bushveld Energy Limited	1	84.00%	Mauritius	Holdingcompany
Bushveld Energy Company (Pty) Limited	4	100%	SouthAfrica	Energy development
Bushveld Vametco Hybrid Mini Grid Company (RF)	12	100%	SouthAfrica	Energy development
(Pty) Limited Bushveld Electrolyte Company (Pty) Ltd	12	55%	SouthAfrica	Energy development
VRFBHoldingsLimited	4	35%	Guernsey	Holdingcompany
VanadiumElectrolyteRentalLimited	1&4	40%&30%	UK	Energy development
Enerox Holdings Limited	4	50%	Guernsey	Holdingcompany
BushveldVametcoLimited	2	100%	Guernsey	Holdingcompany
StrategicMinerals Connecticut LLC	7	100%	United States	Holdingcompany
Bushveld Vanadium 1 (Pty) Limited	8	100%	SouthAfrica	Holdingcompany
BushveldVametcoHoldings (Pty)Limited	11	74%	SouthAfrica	Mining right holder
Bushveld Vametco Alloys (Pty) Limited	9	100%	SouthAfrica	Miningandmanufacturingcompany
Bushveld Vametco Properties (Pty) Limited	10	100%	SouthAfrica	Property owning company
LemurHoldingsLimited	1	100%	Mauritius	Holdingcompany
Coal Mining Madagascar SARL	5	99%	Madagascar	Coal exploration
ImalotoPower Project Limited	3	100%	Mauritius	Holdingcompany
Imaloto Power Project Company SARL	6	99.00%	Madagascar	Power generation company
LemurInvestmentsLimited	3	100%	Mauritius	Holdingcompany
Lemur SA (Pty) Ltd	3	100%	South Africa	Coal trading
1 Held directly by Bushveld Minerals Limited2 Held by BushveldResources Limited 3HeldbyLemurHoldingsLimited4 Held by Bushveld Energy Limited 5HeldbyLemurInvestmentsLimited6 Held by Imaloto Power Project Limited 7 Held by BushveldVametcoLimited 8 Held by Strategic Minerals Connecticut LLC 9 Held by Bushveld Vametco Holdings (Pty) Limited10 Held by Bushveld Vametco Alloys (Pty) Limited 11 Held by Bushveld Vanadium 1 (Pty) Limited 12 Held by Bushveld Energy Company (Pty) Limited13 Held by Bushveld Vanadium 2 (Pty) Limited

2. Adoption of New and Revised Standards

ACCOUNTING STANDARDS AND INTERPRETATIONS APPLIED

Definition of a Business (Amendments to IFRS 3) Amendments to References to the Conceptual Framework in IFRS Standards and Definition of Material (Amendments to IAS 1 and IAS 8)

Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)

The new standard is aimed at resolving the difficulties that arise when an entity determines whether it has acquired a business or a group of assets.

The amendments clarify the definition of 'material' and to align the definition used in the Conceptual Framework and the standards themselves.

The new standard is aimed at resolving the potential effects the IBOR reform could have on financial reporting.

Accounting standards and interpretations not applied

Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group:

Covid-19-Related Rent The new standard provides lessees with an exemption from assessing whether a COVID-19-related

Concessions (Amendment to rent concession is a lease modification. IFRS 16)

Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and

IFRS 16)

Reference to the Conceptual Framework (Amendments to IFRS 3)

Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) Property, Plant and Equipment - Proceeds before Intended Use (Amendments to IAS 16)

IFRS 17 'Insurance Contracts'

The new standard addresses issues that might affect financial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates.

The amendments update an outdated reference in IFRS 3 without significantly changing its requirements.

The amendments address costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

The amendments prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by

management.

The new standard provides a more uniform measurement and presentation approach for all insurance contracts.

Classification of Liabilities as The amendments provide a more general approach to the classification of liabilities under IAS 1 based

Current or Non-current (Amendments to IAS 1)

on the contractual arrangements in place at the reporting date.

The Directors anticipate that the adoption of these Standards and Interpretations, which become effective for annual periods beginning on or after 1 January 2020, in future periods will have no material impact on the financial statements of the Group.

3. Significant accounting policies

Basis of preparation

In accordance with Section 244 of The Companies (Guernsey) Law 2008, the Group confirms that the financial information for the year ended 31 December 2020 is derived from the Group's audited financial statements and that this preliminary announcement does not include the statutory accounts and, as such, does not contain all information required to be disclosed in the financial statements prepared in accordance with International Financial Reporting Standards ("IFRS").

The statutory accounts for the year ended 31 December 2020 have been audited and approved but have not yet been filed. The Group's audited financial statements for the year ended 31 December 2020 received an unqualified audit opinion and the auditor's report contained no statement under section 263(2) or 263(3) of The Companies (Guernsey) Law 2008. The financial information contained within this preliminary statement was approved and authorised for issue by the Board on 29 June 2021.

The financial year covers the 12 months to 31 December 2020. The comparative period covered the 12 month period to December 2019.

The consolidated financial statements have been prepared under the historical cost basis, except for the revaluation of certain financial instruments and investment properties to fair value. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies are set out below.

Going concern

During the 2020 financial year Covid-19 introduced a significant level of uncertainty in the market as well as multiple challenges from an operating and logistic perspective. Our operations resumed in early May following a 35-day national Covid-19 lockdown in South Africa during which Vanchem was non-operational and Vametco was classified as essential services and had limited production. This disruption coupled with the depressed prices realised during 2020 financial year, resulted in an operating loss for the financial period 2020. This loss has increased the financial pressure on the business.

The Group however, closely monitors and manages its liquidity risk, cash forecasts are regularly produced, and sensitivities run for different scenarios including, but not limited to, changes in commodity prices and different production profiles from the Group's producing assets. The Group will continue to prioritise operational performance, cost efficiencies and synergies across Vametco and Vanchem, and will maintain a disciplined approach towards managing capital expenditure and optimising operating margins. Based on the current status of the Group's finances, having considered going concern forecasts and reasonably possible investments, downside and Covid-19 scenarios, the Group's forecasts demonstrate it will have sufficient liquidity headroom to meet its obligations in the ordinary course of business for the next 12 months from the date of approval of the financial statements. This has been further supported by the improvement in the market price of vanadium. Further details of the group's current funding situation and strategy are included in the Going Concern and Outlook section of the Finance Director's Report.

Accordingly, the directors are satisfied that the Group continues to adopt the going concern basis of accounting in preparation of the 31 December 2020 financial statements.

3. Segmental reporting

Bushveld Minerals Limited's operating segments are identified by the Chief Executive Officer and the Executive Committee, collectively named as the Chief Operating Decision Makers (CODM). The operating segments are identified by the way the Group's operations are organised. As at 31 December 2020 the Group operated within four operating segments, vanadium mining and production, energy, mineral exploration activities for vanadium and coal exploration. Activities take place in South Africa (iron ore, vanadium and energy), Madagascar (coal), other African countries (energy project development) and global (battery investment, vanadium sales).

Segment revenue and results

The following is an analysis of the Group's revenue and results by reportable segment.

	Vanadium, ironoreandcoal exploration	Vanadiummining and production	Energy	Total
Year ended 31 December 2020	US$	US$	US$	US$
Results
Segment revenue	-	89,920,958	67,120	89,988,078
Segmentcosts	-	(110,750,141)	(1,050,735)	(111,800,876)
Segmental (loss)/profit	-	(20,829,183)	(983,615)	(21,812,798)
	Vanadium, ironore and coalexploration	Vanadiummining andproduction	Energy	Total
Year ended 31 December 2019Results	US$	US$	US$	US$
Segment revenue	-	116,442,585	71,527	116,514,112
Segmentcosts	-	(83,752,365)	(530,041)	(84,282,406)
Segmental (loss)/profit	-	32,690,220	(458,514)	32,231,706

During the year there were no costs incurred for the exploration of vanadium and iron ore as well as the coal segment. Costs attributable to both segments were of a capital nature.

The reconciliation of segmental profit to the Group's profit before tax is as follows:

	Year ended 31December	Year ended 31December
	2020 US$	2019 US$
Segmental(loss)/profit	(21,812,798)	32,231,706
Unallocatedcosts Gainonbargainpurchase	(10,994,295) - -	(9,977,896) - 60,586,633
Movement in earnout estimate	(206,066)	(1,510,572)
Financeincome	1,077,991	3,593,142
Financecosts	(5,732,249)	(1,669,455)
(Loss)/profit before tax	(37,667,417)	83,253,558

Unallocated costs relate primarily to corporate costs and parent company overheads not attributable to a specific segment.

4. Segmental reporting (continued)

Other segmental information
	Vanadium
	and	Vanadium
	iron ore	mining and	Coal	Bushveld
	exploration	production	exploration	Energy	Total
31 December 2020	US$	US$	US$	US$	US$
Intangibleassets-explorationandevaluation	54,950,331	-	4,053,494	-	59,003,825
Totalreportablesegmentalnetassets	54,950,331	168,285,858	4,053,494	21,388,618	248,678,301
Unallocatednetliabilities	-	-	-	-	(34,678,551)
Totalconsolidated netassets	-	-	-	-	213,999,750
	Vanadium
	and	Vanadium
	iron ore	mining and	Coal	Bushveld
	exploration	production	exploration	Energy	Total
31 December 2019	US$	US$	US$	US$	US$
Intangibleassets-explorationandevaluation	56,827,085	-	2,581,736	-	59,408,821
Totalreportablesegmentalnetassets	56,827,085	201,456,855	2,581,736	6,760,468	267,626,144
Unallocatednetliabilities	-	-	-	-	(26,534,858)
Totalconsolidated netassets	-	-	-	-	241,091,286

Unallocated assets and liabilities relate to corporate and parent company assets and liabilities not attributable to a specific segment.

5. Revenue

2020 US$		2019 US$
Revenue from contracts with customers Saleofgoods	89,920,958	116,442,585
Bushveld Energy services rendered	67,120	71,527
	89,988,078	116,514,112
Disaggregation of revenue from contracts with customers
Thecompanydisaggregatesrevenuefrom customersasfollows:
Sale of goods Localsalesofvanadium-NV12	2,161,420	4,118,063
Localsalesofvanadium-NV16	1,055,785	87,076
Local sales of vanadium - MVO	370,686	2,406
Export sales of vanadium - NV12	16,452,321	17,083,662
Export sales of vanadium - NV16	61,537,773	95,011,546
Export sales of vanadium - VCM	230,248	-
Export sales of vanadium - AMV	8,112,725	139,832
	89,920,958	116,442,585
Rendering of services Bushveld Energy services rendered	67,120	71,527
Total revenue from contracts with customers	89,988,078	116,514,112

Revenue with contract customers is generated from sale of goods and is recognised upon delivery of the goods to the customer, at a point in time and comprises the invoiced amount of goods to customers, net of value added tax.

2020 2019

US$ US$

6. Administrative expenses by nature

Staffcosts	8,146,473	9,616,139
Depreciationofproperty,plantandequipment	256,929	232,131
Professionalfees	6,017,782	7,619,272
Baddebts	-	3,016,120
Other	5,361,992	4,184,829
Total administrative expenses	19,783,176	24,668,491

7. Staff costs

Details of directors' remuneration are included in note 35 (related party transactions).

8. Acquisitions

8.1 Acquisition of Bushveld Vanchem Business

On 7 November 2019, the Bushveld Group completed the acquisition of 100% of the Vanchem Plant as well as 100 per cent of Ivanti Propriety Limited from Duferco Investments ("Duferco").

A viable business case for Vanchem Vanadium Products "VVP" was formulated with key focus on ore feedstock from within the Group (Mokopane) and a refurbishment programme, and presented to the Board of Directors ("BoD") in June 2018. The BoD approved that Bushveld reopened negotiations with Duferco, including revised commercial terms and an extended exclusivity period. An approach to Duferco was made and an initial agreement was reached with Duferco which resulted in the execution of the term sheet on 5 December 2018. The agreement was for a Transaction consideration of US$68 million. The US$68million was made up of deposit of US$6.8 million payable when the definitive agreements had been executed (01 May 2019) with the balance of US$61.2million payable on then-envisaged Transaction closing dates of 30 June 2019 or 30 September 2019 (long stop date). The final executed purchase price of US$53.5million plus a working capital adjustment for the acquisition was renegotiated in September 2019, the fair value of the consideration price is reflected in section C below.

Acquisition rationale remained clear:

Ÿ Would significantly contribute toward Bushveld's Vanadium production growth strategy of 8 400 tVpa in the next five years;

Ÿ Brownfields expansion (total acquisition and refurbishment capex was estimated to be around US$140 million for circa 4 200 tVpa capacity including Mokopane mine development, this compared favourably against the then estimated US$350 million capital requirement to develop and build 5 400tV facility at Mokopane);

Ÿ Would facilitate the expeditious development of Mokopane, preserving the tenure of the project and ensuring the option for an end-to-end production facility would be crystalised;

Ÿ Would provide geographic diversification with Bushveld production now in two geographic locations;

Ÿ Would provide production diversification - moving from a one kiln company to a four-kiln Group;

Ÿ Would provide product diversification - moving from a single product offering to a wider range of products comprised of Nitrovan, FeV, V 2 O 5 and specialized chemical products;

Ÿ Significant NPV at long term FeV price estimates at a conservative long term FeV price;

Ÿ Increased footprint reduces Group overhead cost structure;

Ÿ Improved IP and market presence adds value with long term off-take agreements;

Ÿ Assist and expedites the development of Bushveld's own marketing channel; and

Ÿ In a benign vanadium price environment of 2018, Vanchem's 6 months annual financial statements to 31 March 2019 presented net profit amount in excess of R200million operating at less than 20% of capacity.

This acquisition of Vanchem demonstrates the value in the Company's growth strategy of targeting brownfields processing infrastructure which can be acquired at a lower price compared to the cost of building a greenfield operation, providing a lower risk and a quicker path to production. This has been reflected in Bushveld agreeing and paying an amount far less than the fair value of the assets and liabilities assumed. The Mokopane resource will also enable Bushveld to create a fully integrated vanadium production facility within the Group.

A. Consideration transferred Thefollowingtablesummarisestheacquisitiondatefairvalueofeachmajorclassofconsiderationtransferred. Fair value consideration	US$
Cash	30,713,500
Deferred Consideration (i)	409,323
WorkingCapitalAdjustment(ii)	1,665,063
Convertible Loan (iii)	23,000,000
Total fair value of consideration	55,787,886
I. Deferred Consideration

The Group has agreed to pay the selling shareholder a deferred payment of US$0.5 million, payable in cash 2 years post completion of the acquisition.

II. Working Capital Adjustment

The working capital adjustment was the difference between the original working capital included in the agreement versus the final balances transferred to Bushveld. The amount is payable in cash after 2 years post completion of the acquisition and disclosed as deferred consideration.

III. Convertible loan

A payment of US$23.0 million satisfied through the issue of Bushveld Minerals unsecured convertible loan notes ("Loan Notes") with the following repayment, redemption and conversion terms (in addition to customary covenants, warranties and acceleration provisions):

Ÿ Interest at a coupon of 5% per annum payable annually in arrears or on conversion or redemption;

Ÿ Repayable in cash after the second anniversary of Transaction Closure, plus any accrued interest;

Ÿ Convertible at the holder's option in two tranches of up to US$11.5 million each, after the first and second anniversary of Transaction Closure respectively, at a 5% discount to the prevailing 10-day volume weighted average Bushveld Minerals share price leading up to conversion;

Ÿ Early redemption of the Loan Notes at the election of Bushveld Minerals, subject to the condition that the holder will have an option of converting up to 50% of the early redemption amounts into Bushveld Minerals shares on the same terms set out above;

Ÿ Scope for acceleration of redemption of up to US$5 million of the Loan Notes 12 months after Transaction Closure if an average ferrovanadium price of US$40/kgV is realised during any nine-month period during the12 month period after Transaction Closure;

Ÿ Obligation to repay an amount equal to 40% of any cash received on a new share issue which raises more than US$30m, provided no more than 50% of the Loan Notes have already been paid, redeemed or converted;

Ÿ Obligation to repay an amount equal to 50% of any debt raised over US$15 million, provided no more than 50% of the Loan Notes have been repaid, redeemed or converted;

Ÿ Obligation to repay on a substantial sale of assets or change of control;

Ÿ The holder will not be able to divest any Bushveld Minerals shares received for six months following conversion and be subject to an orderly market arrangement for the following six months.

Acquisition related costs

The Group incurred acquisition-related costs of US$1,519,969. These costs have been included in the calculation of the bargain purchase below.

B. Identifiable assets and liabilities acquired

The following table summarises the recognised amounts of assets acquired, and liabilities assumed at the date of acquisition:

Assets and liabilities acquired	US$
Property,plant and equipment	114,668,826
Landandbuildings	6,137,787
Inventories	7,480,482
Trade and other receivables	900,154
Cashandcashequivalents	10,492
Environmentalrehabilitationliability	(10,382,628)
Trade and other payables	(906,727)
Provisions	(13,899)
Total identifiable net assets acquired at Fair Value	117,894,487
Measurement of fair values

An independent valuer was appointed to determine the fair value of the property plant and equipment. The fair values of other assets and liabilities were estimated by the directors.

Property, plant and equipment

Marsh (Propriety) Limited was appointed for the valuation.

Marsh has been in the industry in South Africa since 1984. Marsh's global experience coupled with professionals, who maintain the highest certifications and advanced professional accreditations, enable them to deliver accurate and timely valuations. Marsh adheres to the International Valuation Standards, strict ethical code of conduct and best practice prescribed by the South African Council for the Property Valuers Profession, South African Institute of Valuers, American Society of Appraisers and the Royal Institution of Chartered Surveyors.

The determination of Fair Market Value (FMV) was based on the estimate cost of acquiring and installing a new or similar equivalent to the current asset at hand. Marsh then determined the remaining life of the asset and therefore calculated the difference obtained from the new replacement value similar or to the next model in the market determining the effective age or life span and minus the remaining life. This determines the economic life of the asset which in turn is the condition rating percentage.

The cost of erecting the building, together with the cost of ancillary site works, was estimated. This cost included relevant professional fees and other associated expenses directly related to the construction of the building and ancillary site works but excluded any finance charges. The cost is then depreciated according to physical, functional and economic conditions to give the Depreciated Replacement Cost of the buildings.

The Market Value of the land, as if vacant, has been determined by the comparison of recent sales of similar properties in the area and similar areas. The sum of these values reflect the Depreciated Replacement Value of the property.

Key procedures conducted:

Plant, Machinery & Equipment (Movable Assets)

Ÿ A Fair Market valuation was performed.

Ÿ A physical on-site survey was performed to inspect and value all the assets on a per asset basis.

Ÿ Production asset per location was assessed for Useful lifes, Remaining Lives and Condition rating.

Ÿ Assets were recorded per location and department.

Ÿ Sufficient detail and specifications was collected in order to value the assets according to the Fair Market

Buildings (Fixed Assets)

Ÿ A Fair Market valuation was performed

Ÿ Each building was individually assessed for Useful lifes, Remaining Lives and Condition rating.

Ÿ Building costs in the area was used to establish a Rate/m2

Ÿ Professional fees, escalations, demolition, and debris removal costs were included.

Ÿ Land Values for the plant and waste site were included.

Valuation Process

The valuation process took place over four core components. These components are designed to ensure the highest degree of valuation accuracy while ensuring limited interruption to the operations of our clients.

An overview of the four main components is as follows:

Initial Project Research and Preparation

This phase of the valuation program involved research, information gathering and preparation by Marsh Valuation Services to ensure a preliminary understanding of Bushveld Minerals SA (PTY) LTD operations, locations and accounting principles.

This is a crucial stage in the valuation process ensuring reduced time spent at each location as part of the physical inspection.

Physical Inspection and Information Gathering

The aim of this step of the process was information gathering and data collection while ensuring minimal impact on the operations. The valuation process, whilst on site, was generally undertaken via the following process:

Research, Analysis and Reporting

This phase of the valuation process involves utilising the information gained during the inspection process, our internal databases of information, external sources of data, recent and planned capital expenditure details, information from suppliers and international research to undertake the valuation calculations. The analysis and calculations were then extrapolated and input into a detailed valuation report.

Delivery and Findings

After the valuation research and reporting was completed, a valuation report was provided including the list of assets identified as well as the fair market values of those assets with remaining useful lives.

C. Accounting for the acquisition
Theacquisitionhasbeenaccountedforasfollows:
Vanchem Acquisition	US$
Property,plant and equipment	114,668,826
Residentialproperties	6,137,787
Inventories	7,480,482
Trade and other receivables	900,154
Cashandcashequivalents	10,492
Environmentalrehabilitationliability	(10,382,628)
Trade and other payables	(906,727)
Provisions	(13,899)
TotalidentifiablenetassetsacquiredatFairValue	117,894,487
FairValueofConsideration	(55,787,885)
Acquisitionrelatedcosts	(1,519,969)
Gain on Bargain Purchase	60,586,633

IFRS 3 requires an acquirer to measure the cost of the acquisition at the fair value of the consideration paid, and measure acquired identifiable assets and liabilities at their fair values, with any excess of acquired assets and liabilities over the consideration paid (a 'bargain purchase') recognised in profit or loss immediately. The Group engaged an independent valuation expert to value the assets acquired using the cost approach, which we consider to be the most appropriate fair value measurement technique given the nature of the assets acquired and the circumstances of the acquisition.

Where a business combination results in a bargain purchase, IFRS 3 requires the acquirer to reassess whether it has correctly identified all of the assets and liabilities acquired and to review the procedures used to measure the fair values recognised at the acquisition date.

We have completed this assessment and concluded that the recognition of a bargain purchase is appropriate. In coming to this

conclusion we have considered the circumstances of the sale as Vanchem was in business rescue and therefore not an open market transaction, and the advantages of Vanchem which fit into the Group's diversity and growth strategy, advantages of which are disclosed above.

9. Finance income

	2020 US$	2019 US$
Bankinterest	1,077,991	3,593,142
10.Financecosts
Interestonunsecuredconvertibleloannotes	1,614,577	173,288
Interestonrehabilitationliability	1,663,602	665,738
Interest on borrowings	1,749,386	366,179
Interestonleaseliabilities	466,032	463,513
Otherfinancecosts	238,652	738
	5,732,249	1,669,456

11. Taxation

The tax expense represents the sum of the tax currently payable and the deferred tax adjustment for the year.

(Loss)/profitbeforetax	(37,667,417)	83,253,558
Tax at the applicable tax rate of 30% (2019: 30%)	-	-
South African tax - current tax	3,237,060	13,033,205
South African tax - deferred tax	(3,721,714)	267,538
USA - deferred tax	-	2,665,603
USA - current tax	-	(1,960,381)
Taxationexpensefortheyear	(484,654)	14,005,965

Management believe that any unrecognised deferred tax assets relating to the accumulated losses in the subsidiary undertakings of the Group, would be immaterial to these financial statements.

USA - current tax charge in the prior year comprises irrecoverable withholding tax on dividends received and a tax liability pertaining to the conversion of a subsidiary from a corporation into a limited liability company in the United States of America resulted in an upfront prepayment of US$5,000,000 being payable to Internal Revenue Service (IRS) in 2018. In 2020 this amount was subsequently refunded once the final tax calculation was completed. Due to the conversion all tax credits including deferred tax assets were neutralised in 2019.

12. (Loss)/earnings per share from continuing operations Basic (loss) / earnings per share

The calculation of a basic (loss)/earnings per share of (3.00) cents (December 2019: 5.51 cents), is calculated using the total loss for the year attributable to the owners of the company of US$36,680,615 (December 2019: Profit of US$61,968,301) and 1,164,710,352 shares (2019:1,125,562,148) being weighted average number of share in issue during the year.

Diluted (loss)/earnings per share

Due to the Group being loss making for the period, instruments are not considered dilutive and therefore the diluted loss per share is the same as basic loss per share.

13. Intangibleassets
		2020		2019
	Cost /Valuation US$	AccumulatedCarrying valueamortisation US$ US$	Cost /Valuation US$	AccumulatedCarrying valueamortisation US$ US$
VanadiumandIronore	54,950,331	- 54,950,331	56,827,085	- 56,827,085
Coal	4,053,494	- 4,053,494	2,581,736	- 2,581,736
Total	59,003,825	- 59,003,825	59,408,821	- 59,408,821
Reconciliation of intangible	assets - 2020
		Openingbalance US$	Additions US$	Exchange Totaldifferences US$ US$
VanadiumandIronore		56,827,085	89,764	(1,966,518) 54,950,331
Coal		2,581,736	1,381,378	90,380 4,053,494
		59,408,821	1,471,142	(1,876,138) 59,003,825
Reconciliation of intangible assets - 2019
		Openingbalance US$	Additions US$	Exchange Totaldifferences US$ US$
VanadiumandIronore		55,639,067	198,319	989,699 56,827,085
Coal		1,511,358	1,070,378	- 2,581,736
		57,150,425	1,268,697	989,699 59,408,821
Vanadium and Iron Ore

The Company's subsidiary, Bushveld Resources Limited has a 64% interest in Pamish Investment No 39 (Proprietary) Limited ("Pamish") which holds an interest in Prospecting right 95 ("Pamish 39"). Bushveld Resources Limited also has a 68.5% interest in Amaraka Investment No 85 (Proprietary) Limited ("Amaraka") which holds an interest in Prospecting right 438 ("Amaraka 85").

The Department of Mineral Resources and Energy ("DMRE") granted a mining right to Pamish Investments No. 39 (Pty) Ltd ("Pamish") on the 28th of August 2019, in respect of the five farms Vliegekraal 783 LR, Vogelstruisfontein 765 LR, Vriesland 781 LR, Schoonoord 786 LR and Bellevue 808 LR situated in the District of Mogalakwena, Limpopo, which make up the Mokopane Project.

Mokopane is one of the world's largest primary vanadium resources, with a 298 Mt JORC compliant resource and a weighted average V2 O5 grade of 1.75 per cent in magnetite (1.41 per cent in-situ). The Mokopane deposit is a layered orebody along a 5.5 km north-south strike at a dip of between 18 degrees and 22 degrees west. The project comprises three adjacent and parallel magnetite layers namely the Main Magnetite Layer ("MML"), the MML Hanging Wall ("MML- HW") layer and the AB Zone. 298 Mt (JORC) resources and reserves run across three parallel overlying magnetite layers with grades ranging from 1.6 per cent to over 2 per cent V2O5 as follows:

- MML: 52 Mt @ 1.48 per cent V2O5 (1.75 per cent V2O5 in magnetite);

- MML-HW & Parting: 233 Mt @ 0.8 per cent V2O5 (1.5-1.6 per cent V2O5 in magnetite); and

- AB Zone: 12 Mt @ 0.7 per cent V2O5 (greater than 2 per cent V2O5 in magnetite).

The mining right allows for the extraction of several other minerals over the entire Mokopane project resource area, including, titanium, phosphate, platinum Group metals, gold, cobalt, copper, nickel and chrome.

Brits Vanadium Project

Bushveld Minerals Limited has been granted Section 11 of the Mineral and Petroleum Resources Development Act (MPRDA) for acquiring control of Sable Platinum Mining Pty Ltd for NW 30/5/1/1/2/11124 PR, held through Great Line 1 Invest (Pty) Ltd and was executed in May 2021. The company has also applied for Section 102 of the Mineral and Petroleum Resources Development Act (MPRDA) and waiting for approval to incorporate NW 30/5/1/1/2/11069 PR into NW 30/5/1/1/2/11124 PR.

Bushveld Minerals Limited has applied for a prospecting right which has been accepted and environmental authorisation has been granted under GP 30/5/1/1/2/10576 PR held by Gemsbok Magnetite (Pty) Ltd.

A renewal application for expired Prospecting Right NW 30/5/1/1/2/11124 PR was lodged for Great 1 Line on Farm Uitvalgrond 431 JQ Portion 3. This prospecting right expired on the 3rd of November 2019 and currently awaiting approval.

Coal

Coal Exploration licences have been issued to Coal Mining Madagascar SARL a 99% subsidiary of Lemur Investments Limited.

The exploration is in South West Madagascar covering 11 concession blocks in the Imaloto Coal basin known as the Imaloto Coal Project and Extension.

Notes to the Consolidated Financial Statements

14.Property,plant andequipment	Buildings and	Plant and	Motor	Decommissi	Right of use	Waste	Assets under	Total
	otherimprovements US$	machinery US$	vehiclesfurniture andequipment US$	ningassets US$	asset US$	stripping asset US$	construction US$	US$
Cost At 1 January 2019	1,259,049	42,878,860	241,295	1,575,896	-	-	7,455,662	53,410,762
Additions	6,714,835	113,453,458	1,371,514	942,121	5,727,902	3,920,684	11,883,121	144,013,635
Disposals	(414,250)	(2,134,666)	(239,102)	-	-	-	-	(2,788,018)
Assetsunderconstructioncapitalised	268,304	8,992,207	48,833	-	-	-	(9,309,344)	-
Foreignexchange differences	368,583	3,179,724	51,570	79,271	7,988	-	639,339	4,326,475
At 31 December 2019	8,196,521	166,369,583	1,474,110	2,597,288	5,735,890	3,920,684	10,668,778	198,962,854
Additions	-	2,256,794	62,665	-	-	-	6,950,465	9,269,924
Disposals	(336,491)	(2,490,766)	(192,023)	-	-	-	-	(3,019,280)
Transfers	190,930	11,645,072	121,070	-	-	-	(11,957,072)	-
Revaluations	-	-	-	(695,244)	-	-	-	(695,244)
Foreignexchange differences	(344,926)	(6,179,154)	(559,874)	33,180	(231,619)	(156,242)	(718,321)	(8,156,956)
At 31 December 2020	7,706,034	171,601,529	905,948	1,935,224	5,504,271	3,764,442	4,943,850	196,361,298
Depreciation At 1 January 2019	(237,758)	(5,028,852)	(179,873)	(83,106)	-	-	-	(5,529,589)
Disposals	414,251	1,804,752	234,711	-	-	-	-	2,453,714
Depreciation chargefortheyear	(1,177,756)	(5,947,944)	(617,794)	(848,939)	(627,475)	(1,168,237)	-	(10,388,145)
Foreignexchange differences	(21,021)	(211,965)	27,246	(22,543)	(1,488)	-	-	(229,771)
At 31 December 2019	(1,022,284)	(9,384,009)	(535,710)	(954,588)	(628,963)	(1,168,237)	-	(13,693,791)
Disposals	336,491	2,407,463	248,586	-	-	-	-	2,992,540
Depreciation chargefortheyear	(385,785)	(14,468,628)	(175,976)	(53,233)	(434,768)	(2,347,763)	-	(17,866,153)
Foreignexchange differences	3,367	301,705	(151,754)	31,352	(150,129)	(248,442)	-	(213,901)
At 31 December 2020	(1,068,211)	(21,143,469)	(614,854)	(976,469)	(1,213,860)	(3,764,442)	-	(28,781,305)
Net Book Value
At 31 December 2019	7,174,237	156,985,574	938,400	1,642,700	5,106,927	2,752,447	10,668,778	185,269,063
At 31 December 2020	6,637,823	150,458,060	291,094	958,755	4,290,411	-	4,943,850	167,579,993

15. Investment property
		2020			2019
	Opening	Fair value	Closing	Opening	Fair value	Closing
	balance	movements	balance	balance	movements	balance
	US$	US$	US$	US$	US$	US$
Investmentproperties	2,905,449	(94,432)	2,811,017	2,816,007	89,442	2,905,449

Investment properties comprise residential housing in Brits and Elandsrand, North West Province.

Investment properties are stated at fair value, which has been determined based on valuations performed by Domus Estate Management, an accredited independent valuer, as at 31 December 2020. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Thefollowingvaluationtechniquesand keyinputs were used in thevaluationof theinvestment properties:
i. Physicalinspectionofeachproperty; ii. Consultationwithestateagenciestodiscusscurrentsalesmarkettrends;and iii. Comparative salesreportsforlocations where properties are situatedwere obtained fromSouthAfrica.
16.Deferred tax
2020	2019
US$	US$
Deferred tax assets 5,085,154	173,892
As at 31 December 2020 5,085,154	173,892

The evidence supporting recognition of a deferred tax asset is forecasts for the component to which the losses relate which indicate with reasonable certainty the availability of sufficient future taxable profits in the next 3 years against which the losses can be utilised.

17. Financial assets - investments Name ofcompany	Held by	2020	2019
		US$	US$
Enerox Holdings Limited		-	420,891
Avalon		-	4,000,000
		-	4,420,891
Avalon

The Company agreed to support the merger of Avalon Battery Corporation ("Avalon") and redT energy plc ("'redT") (the "Merger") with interim funding of US$5 million which would give Bushveld the opportunity to acquire a strategic interest in the merged energy storage company.

In July 2019, AIM-quoted energy storage provider redT and Avalon, a North American-based vanadium redox flow battery ("VRFB") manufacturer, announced their plans to merge. The resulting business would be a leading player in the growing energy storage market. Traded on AIM in London, the merged entity had a global sales footprint, a robust near-term project pipeline, operations in North America, Europe and Asia, market-leading technology, and a strong management team.

Bushveld agreed to provide a convertible loan of up to US$5 million to Avalon (the "Interim Funding"), half of which was loaned by Avalon to redT, to support the companies through the due diligence process, finalisation of the Merger negotiation and completion of the Fundraising. These funds also allowed both companies to continue delivering on their current project pipelines.

The investment was in line with the Company's strategy of building a leading downstream vanadium-based energy storage platform, by:

Ÿ Increasing Bushveld's exposure to the massive potential of the stationary energy storage market, for the first time directly with a manufacturer of the VRFB technology;

Ÿ Partnering with selective VRFB companies with attractive upside potential, including the establishment of a VRFB Investment Platform; and

Ÿ Demonstrating upstream support from the vanadium industry for the development of the VRFB sector and encouraging additional investment into the combined company.

Refer to note 21 for details of the conversion of the loan into shares, which are now classified as financial assets at fair value.

18.Inventories
Finishedgoods	12,070,061	17,062,028
Workinprogress	7,454,987	4,544,303
Raw materials	1,761,551	1,702,062
Consumablestores	12,795,026	11,773,949
Inventories	34,081,625	35,082,342

The amount of write-down of inventories due to net realisable value provision requirement is nil (2019: nil).

19.Trade and other receivables
Trade receivables	3,854,461	2,762,448
Other receivables	1,610,261	1,753,839
Lossallowance	(32,826)	-
Non-financial instruments: VAT	4,993,467	-
Total trade and other receivables	10,425,363	4,516,287

19. Trade and other receivables (continued) Categorisation of trade and other receivables

Trade and other receivables are categorised as follows in accordance with IFRS 9: Financial Instruments:

Atamortisedcost	5,431,896	4,516,287
Non-financialinstruments	4,993,467	-
	10,425,363	4,516,287

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 15-90 days and therefore are all classified as current.

Other receivables consist of prepayments and deposits, which are realised overtime.

Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.

Impairment and risk exposure

Information about the impairment of trade receivables and the Group's exposure to credit risk, foreign currency risk and interest rate risk can be found in note 32.

2020

US$

2019

US$

20.Restricted investments

Rehabilitationtrustfundandinsurancefund

3,111,465

6,605,465

The Group is required by statutory law in South Africa to hold these restricted investments in order to meet decommissioning liabilities on the statement of financial position (refer to note 25 and 33 for further details).

21.Financial assets at fair value
	2020 US$	2019 US$
As at 1 January	1,952,227	2,311,272
Additions	7,304,099	-
Disposals	(286,643)	-
Fairvalue movement	13,483,194	(359,045)
As at 31 December	22,452,877	1,952,227
AfriTin Mining Limited

The Group measures the fair value of the investment in AfriTin Mining Limited using the quoted price in an active market for that instrument. A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Invinity Energy Systems

On 1 November 2019, Bushveld announced it had agreed to support the Merger with funding of US$5 million through a convertible loan to Avalon Battery, a Canadian VRFB company, to facilitate a Merger with redT Energy, a UK VRFB company, and a listing on the London AIM exchange. In accordance with the terms of the convertible loan, on successful completion of the Merger in March 2020, the loan was converted into shares in Invinity Energy Systems (AIM: IES). The previously provided US$5 million loan (together with the accrued interest and commitment fee) has been converted into 302,978,063 Ordinary Shares at a price of 1.65 pence in Invinity, representing up to 8.71 per cent of Invinity on 1 April 2020. The shares issued to Bushveld are not subject to a lock-in arrangement. In addition to the funding from Bushveld, Invinity has raised £7.9 million in equity and £3 million in convertible debt through an equity placing at 1.65 pence per share at the time. Subsequently, Invinity raised a further £22.5 million through a placing and open offer on 3 December 2020.

Post year end, the investment in Invinity was realised, resulting in capital appreciation. The proceeds of the sale were used towards Bushveld Energy's 2021 projects.

Enerox Holdings Limited

The investment in Enerox Holdings Limited is in line with Bushveld Minerals' strategy of partnering with Vanadium Redox Flow Battery ("VRFB") companies.

The Consortium, which currently includes Bushveld Energy Limited, a private North American investor and an East Asian Investment Holding Company, held 90% of EHL after an initial acquisition of 24.9% under an initial sale and purchase agreement ("ISPA"). In terms of the ISPA, the members of the Consortium have acquired, in equal proportions, 24.9 per cent of the issued share capital of Enerox for €150,000 from CellCube Energy Storage Systems Inc (the "Seller").

The investment of US$2,304,099 (2019: US$420,891) represents Bushveld's share of the investment, which the directors consider to equate to the fair value of the investment at the recording date.

As of 31 December 2020, Bushveld Energy anticipates contributing not more than 50 per cent of the funds to be invested by the Consortium and is considering additional investors to participate as part of the Consortium. The Enerox investment is part of Bushveld Minerals' strategy of partnering with VRFB Original Equipment Manufacturers ("OEMs") that includes supply of vanadium and electrolyte, deployments and investment into the rapidly growing energy storage market.

22. Cash and cash equivalents

2020 2019

US$ US$

Cash at hand and in bank 50,540,672 34,011,557

2020 2019

US$ US$

22. Cash and cash equivalents (continued)

Cash and cash equivalents (which are presented as a single class of assets on the face of the Statement of Financial Position) comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less. Short-term deposits include funds received from Orion Mine Finance ("Orion") under the Production Financing Agreement (PFA) and Convertible Loan Notes Instrument (CLN). The PFA capital is ringfenced to provide the necessary funding for the Phase III expansion project to grow production at Vametco to more than 4'200 mtV per annum.

The total cash and cash equivalents denominated in South African Rand amount to US$34,165,671 (2019: US$17,469, 385).

The directors consider that the carrying amount of cash and cash equivalents approximates their fair value.

Refer to Note 28 for further information in relation to the Production Financing Agreement and Convertible Loan Notes Instrument.

23. Share capital and share premium				Total share
	SharesNumber	Share capital	Sharepremium	capital andpremium
		$	$	$
At 1 January2019	1,119,727,953	14,921,079	101,003,256	115,924,335
Shares issued - Yellow Dragon Holdings	33,914,729	436,192	10,063,808	10,500,000
At 1 January2020	1,153,642,682	15,357,271	111,067,064	126,424,335
Sharesissued-Duferco	37,115,210	501,157	5,998,843	6,500,000
At 31 December 2020	1,190,757,892	15,858,428	117,065,907	132,924,335

The Board may, subject to Guernsey Law, issue shares or grant rights to subscribe for or convert securities into shares. It may issue different classes of shares ranking equally with existing shares. It may convert all or any classes of shares into redeemable shares. The Company may also hold treasury shares in accordance with the law. Dividends may be paid in proportion to the amount paid up on each class of shares.

As at the 31 December 2020 the Company owns 670,000 (2019: 670,000) treasury shares with a nominal value of 1 pence.

Shares issued

Duferco Participations Holding S.A. ("Duferco")

As part of the acquisition of Vanchem on the 7 th of November 2019, Bushveld Minerals Limited subscribed to US$23million unsecured convertible loan notes ("Loan Notes").

Duferco, the previous owner of Vanchem, agreed to accept the partial early repayment of US$11.5 million of their US$23 million convertible loan notes, originally issued in accordance with the terms of the acquisition of Bushveld Vanchem as announced on 23 October 2019. Bushveld Minerals Limited repaid US$5 million of the Duferco loan notes, plus interest of US$1.28 million, in cash and satisfied the balance of US$6.5 million by the issue of 37,115,210 new Bushveld shares, using a conversion price of 12.97p, which is a 5 per cent discount to the prevailing 10-day volume weighted average Bushveld Minerals share price leading up to conversion.

Refer to note 28 for details on the Convertible Loan Note details.

Yellow Dragon

As part of the Vametco acquisition terms announced on 30 November 2017, Bushveld Minerals agreed to make further deferred payments to Yellow Dragon as follows:

Ÿ Two deferred payments of US$0.6 million each, payable following publication of the accounts for Vametco Holdings Limited for respectively the years ending 31 December 2018 and 31 December 2019; and

Ÿ A final payment to be made on publication of the Vametco Holdings Limited accounts for the year ended 31 December 2020 to be calculated by reference to Vametco Holdings Limited's EBITDA for the 2020 financial year. The payment being calculated on the following basis 4.5 x EBITDA (as shown in the 2020 Accounts) x 5.91 per cent.

The Company paid the first of the two US$0.6 million payments, following which the two parties agreed on an early settlement for the balance of amounts payable to be settled as follows:

Ÿ Full and final settlement of the earn out of US$13,500,000, being an all-in total payment comprising:

- A cash component payment totalling US$3,000,000; and

- A total of US$10,500,000 payable in 33,914,729 Bushveld Minerals Limited ordinary shares of 1.0 penny each to be issued at a price of £0.24 (which favourably compared to the 10 day volume weighted average price of £0.235 and the 20 day volume weighted average price of £0.226, as at 22 October 2019).

The shares issued to Yellow Dragon are subject to a 6 month lock-in arrangement and a further 6 month orderly market arrangement which are subject to certain exceptions and may otherwise only be waived with the consent of the Company's brokers.

Nature and purpose of other reserves Share premium

The share premium reserve represents the amount subscribed for share capital in excess of nominal value.

Share-based payment reserve

The share-based payment reserve represents the cumulative fair value of share options granted to employees.

Convertible loan note reserve

This reserve represents the equity portion of a convertible loan.

Foreign exchange translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of financial statements of foreign operations.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of financial assets at fair value through other comprehensive income until the assets are derecognised or impaired.

Accumulated profit/loss

The accumulated profit/loss reserve represents other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

24. Post-retirement medical liability Benefit liability

The benefit comprises medical aid subsidies provided to qualifying retired employees. Actuarial valuations are made annually, and the most recent valuation was made on 31 December 2019.

Keyassumptionsused
Actualage	77.3 years	76.9 years
Discountrates	10.60%	9.80%
Healthcarecostinflation	7.30%	7.30%
Durationofliability	9.1 years	9.7 years

A one percentage point change in the assumed rate of healthcare costs would have the following effect on the present value of the unfunded obligation: Plus 1%: US$2.5 million; Less 1%: US$2.2 million.

A one percentage point change in the assumed interest rate would have the following effect on the present value of the unfunded obligation; Plus 1%: US$0.24 million; Less 1%: US$0.20 million.

25. Environmental rehabilitation liability

2020 2019

US$ US$

Provision for future environmental rehabilitation costs 17,998,336 17,844,066

The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a discounted basis at the time of developing the mine and installing and using those facilities.

The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred up to 2037, which is when the producing mine properties are expected to cease operations. These provisions have been created based on the Group's internal estimates. Assumptions based on the current economic environment have been made, which management believes are a reasonable basis upon changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically viable rates. This, in turn, will depend upon future vanadium prices, which are inherently uncertain.

The discount rate used in the calculation of the provision as at 31 December 2020 was 10.93% (2019: 10.07%).

26.Deferred consideration
	2020 US$	2019 US$
Openingbalance	7,108,819	17,427,512
Cash payment	(1,680,459)	(3,600,000)
Sharessettlement(seenote28)	-	(10,500,000)
Unwinding of discount	-	34,434
Movement in earnout estimate	206,066	1,510,572
ConsiderationforVanchemacquisition(seenote8)	-	2,074,385
Foreign exchange	(11,894)	161,916
	5,622,532	7,108,819
Split between non-current and current portions
Non-current	1,802,884	7,108,819
Current	3,819,648	-
	5,622,532	7,108,819

At the year-end management have updated their estimate of the earnout payable to EVRAZ on the acquisition of the Vametco Group, which is based on the expected EBITDA for the year ended 31 December 2020, to a maximum of US$3.53million. The remaining balance relates to the consideration attributable to the acquisition of Vanchem.

27. Loans

Industrial Development Corporation 1,597,972 -

The loan represents The Industrial Development Corporation's contribution and is governed by the tripartite agreement between Bushveld Energy Company (Pty) Ltd, Bushveld Electrolyte Company (Pty) Ltd & The Industrial Development Corporation of South Africa Limited. The loan represents the initial capitalised costs of US$260,366 plus the initial subscription amount of US$1,367,559 of the total US$3,821,028 to be advanced to Bushveld Electrolyte Company Pty Ltd. Bushveld Electrolyte Company is a South African producer of vanadium electrolyte. The company is jointly owned by Bushveld Energy and the IDC, with shareholding of 55% and 45% respectively. Its first manufacturing facility is under construction and located in East London, South Africa.

The loan is interest free, unsecured, subordinated in favour of Bushveld Electrolyte Company's creditors and have no fixed term of repayment in the next 12 months.

Split between non-current and current portions Non-currentliabilities		1,597,972		-
28.Borrowings
		2020 US$		2019 US$
Development Bankof SouthernAfrica	845,588		511,522
Nedbank Term Loan and Revolving Credit Facility	8,636,535		18,071,342
Convertible Loan Notes - Duferco	11,585,068		23,173,288
ProductionFinancingAgreement- OrionMine Finance	30,105,886		-
Convertible Loan Notes Instrument - Orion Mine Finance	33,073,699		-
	84,246,776		41,756,152
Split between non-current and current portions Non-current	70,909,370		41,756,152
Current	13,337,406		-
	84,246,776		41,756,152
Development Bank of Southern Africa - FacilityAgreement

Lemur Holdings Limited, a subsidiary undertaking, entered into a US$1,000,000 facility agreement with the Development Bank of Southern Africa Limited in March 2019. The purpose of the facility is to assist with the costs associated with delivering the key milestones to the power project. The repayment is subject to the successful bankable feasibility study of the project at which point the repayment would be the facility value plus an amount equal to an IRR of 40% capped at 2.5 times which ever is lower. As at 31 December 2020, only US$845 588 was drawn down.

Nedbank Term Loan and Revolving Credit Facility

Bushveld Minerals Limited secured R375 million (approximately US$25 million) in debt facilities through its subsidiary Bushveld Vametco Alloys Proprietary Limited ("the Borrower") with Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division), a South African based financial institution, in the form of a R250 million loan and a R125 million revolving credit facility.

Key highlights of the R250 million loan which was drawn in November 2019:

Ÿ Five-year amortising loan;

Ÿ Interest rate calculated using the three year or six months JIBAR1 as selected by the Company plus a 3.4% margin;

Ÿ Interest payments are due semi-annually with first payment due in six months from financial close;

Ÿ Principal repayments will be made semi-annually in arrears over four years in eight equal installments, with first payment due 18 months after financial close.

The Nedbank term loan was retired in December 2020.

Key highlights of the R125 million revolving credit facility, which was drawn in March 2020 (2019: undrawn):

Ÿ Three-year term;

Ÿ Interest rate calculated using the three year or six months JIBAR1 as selected by the Company plus a 3.6% margin;

Ÿ Interest payments are due semi-annually with first payment due in six months from financial close.

The security provided is customary for a secured financing of this nature, including cession of shares in the Borrower, security over the assets of the Borrower, and a parent guarantee.

Financial Covenants undertaken

The Borrower shall ensure that for so long as any amount is outstanding under a Finance Document or any Commitment is in force, in respect of each Measurement Period:

Ÿ the Interest Cover Ratio; and

Ÿ the Net Debt to EBITDA Ratio at a Borrower level shall not exceed 2.5 times.

Convertible Loan Note - Duferco

As part of the consideration related to the Bushveld Vanchem acquisition, a payment of US$23.0 million is to be satisfied through the issue of Bushveld Minerals unsecured convertible loan notes ("Loan Notes") with the following repayment, redemption and conversion terms (in addition to customary covenants, warranties and acceleration provisions):

Ÿ Interest at a coupon of 5% per annum payable annually in arrears or on conversion or redemption;

Ÿ Repayable in cash after the second anniversary of Transaction Closure, plus any accrued interest;

Ÿ Obligation to repay an amount equal to 50% of any debt raised over US$15 million, provided no more than 50% of the Loan Notes have been repaid, redeemed or converted;

Ÿ Obligation to repay on a substantial sale of assets or change of control;

The holder will not be able to divest any Bushveld Minerals shares received for six months following conversion and be subject to an orderly market arrangement for the following six months.

In 2020 Bushveld Minerals Limited settled US$11.5million of the US$23million convertible loan notes. US$5million plus interest of US$1.28 million was settled in cash and the balance of US$6.5 million was satisfied by the issue of 37,115,210 new Bushveld shares, using a conversion price of 12.97p, which is a 5 per cent discount to the prevailing 10-day volume weighted average Bushveld Minerals share price leading up to conversion.

Duferco continues to hold a total of US$11.5 million convertible loan notes, which are due for repayment on 8 November 2021.

Production Financing Agreement - Orion Mine Finance

Bushveld Minerals Limited signed a long-term Production Financing Agreement of US$30 million (or the "PFA") with mining- focused investment business Orion Mine Finance ("Orion"), primarily to finance its expansion plans at Bushveld Vametco Alloys (Pty) Ltd and debt repayment. Exchange control authorization from the South Africa Reserve Bank Financial Surveillance Department was granted in October 2020.

PFA Transaction Details

The Company will repay the principal amount and pay interest via quarterly payments determined initially as the sum of:

Ÿ a gross revenue rate (set at 1.175 per cent for 2020 and 2021 and 1.45 per cent from 2022 onwards, subject to adjustment based on applicable quarterly vanadium prices) multiplied by the gross revenue for the quarter; and

Ÿ a unit rate of US$0.443/kgV multiplied by the aggregate amount of vanadium sold for the quarter.

Once the Company reaches vanadium sales of approximately 132,020 mtV during the term of the facility, the gross revenue rate and unit rate will reduce by 75 per cent (i.e. to 25 per cent of the applicable rates).

On each of the first three loan anniversaries, the Company has the option to repay up to 50 per cent of both constituent loan parts (each may only be repaid once). If the Company utilises the loan repayment option, the gross revenue rate and/or the unit rate will reduce accordingly. The PFA capital will provide funding to continue to grow production at Vametco to more than 4,200 mtV per annual production level and debt repayment.

Part of the proceeds of the Instrument were used by the Company to prepay in full the Nedbank ZAR250 million term loan.

Convertible Loan Notes Instrument - Orion Mine Finance

Bushveld Minerals Limited, through an affiliate of Orion Mine Finance, agreed to subscribe for US$35 million convertible loan notes instrument (the "Instrument"). The conversion price of the convertible loan notes was set at 17pence. The Instrument's proceeds will go towards the first phase of Vanchem's critical refurbishment programme and debt repayment.

Financing terms of the Instrument and convertible loan notes

Ÿ A fixed 10 per cent per annum coupon with a three year maturity date from the drawdown date.

Ÿ All interest will accrue and be capitalised on a quarterly basis in arrears but compounded annually.

Ÿ Accumulated capitalised and accrued interest is convertible into Bushveld ordinary shares. All interest and principal, to the extent not converted into ordinary shares, is due and payable at maturity date.

Ÿ Funds raised are to be used for capital investment purposes for the first phase of Vanchem's critical refurbishment programme, and the balance for debt repayment purposes.

Conversion feature

Between drawdown and the Instrument's maturity date Orion may, at their option, convert an amount of the outstanding debt, including capitalised and accrued interest, into Bushveld ordinary shares as follows:

Ÿ First six months: Up to one third of the outstanding amount;

Ÿ Second six months: Up to two thirds of the outstanding amount (less any amount previously converted);

Ÿ From the anniversary of drawdown until the maturity date: the outstanding amount under the Instrument may be converted;

Ÿ Bushveld also has the option to convert all, but not some, of the amount outstanding under the Instrument, if its volume weighted average share price is more than 200 per cent of the conversion price over a continuous 15 trading day period, a trading day being a day on which the AIM market is open for the trading of securities.

At any time until the convertible maturity date, Orion may convert the debt as above mentioned into an amount of ordinary shares equal to the total amount available for conversion under the Instrument divided by the conversion price of 17 pence.

The Orion and Nedbank borrowings are secured against certain group companies and associated assets.

Bushveld Minerals Limited

(Registration number 54506)

Consolidated Financial Statements for the year ended 31 December 2020

Notes to the Consolidated Financial Statements

2020 2019

US$ US$

29. Lease liabilities

A reconciliation of total operating lease commitments to the IFRS 16 lease liability at 31 December 2020 is as follows:

Asat1January	5,464,909	-
Additions	-	5,735,890
Accretionofinterest	497,042	455,687
Payments	(753,302)	(726,668)
Foreign exchange	(206,505)	-
	5,002,144	5,464,909
Non-currentleaseliabilities	4,376,483	4,677,338
Currentleaseliabilities	625,661	787,571
	5,002,144	5,464,909

	2020 US$	2019 US$
30.Tradeandotherpayables
Financial instruments: Trade payables	17,074,422	12,651,751
Accrualsandotherpayables	4,991,179	3,069,751
Non-financial instruments: VAT	-	88,494
	22,065,601	15,809,996

Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for trade purchases is 30 days.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms. No interest has been charged by any suppliers as a result of late payment of invoices during the year.

The directors consider that the carrying amount of trade and other payables approximates to their fair value.

The total trade and other payables denominated in South African Rand amount to US$15,895,209 (2019: US$12,027,091).

31.Provisions
Reconciliation of provisions - 2020
	Openingbalance US$	Additions US$	Utilisedduringthe year US$	Foreignexchange US$	Total US$
Leave pay	1,193,630	504,394	-	(42,567)	1,655,457
Performancebonus	2,098,565	1,602,991	(2,290,117)	(36,292)	1,375,147
Other	140,424	221,983	(92,680)	(3,437)	266,290
	3,432,619	2,329,368	(2,382,797)	(82,296)	3,296,894
Reconciliation of provisions - 2019
	Openingbalance US$	Additions US$	Utilisedduringthe year US$	Foreignexchange US$	Total US$
Leave pay	836,455	387,945	-	(30,770)	1,193,630
Performancebonus	809,085	2,640,764	(1,327,699)	(23,585)	2,098,565
Surfacelease	622,616	(622,616)	-	-	-
Other	2,052,809	147,869	(2,057,581)	(2,673)	140,424
	4,320,965	2,553,962	(3,385,280)	(57,028)	3,432,619
Leave payand bonus

Leave pay represents employee leave days due multiplied by their cost to the company employment package. The bonus represents the estimated amount due to employees based on their approved bonus scheme.

Performance bonus

The performance bonus represents an incentive bonus due to senior employees, calculated in terms of an approved scheme based on the company's operating results.

Other

The other provisions represents estimates for Group tax, legal and consulting fees to be charged.

2020 2019

US$ US$

32. Financial instruments

The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising returns to shareholders. In order to maintain or adjust the capital structure, the Group may issue new shares or arrange debt financing. At the reporting date, the Group had borrowings of US$84,246,776 (2019: US$41,756,152).

The capital structure of the Group consists of cash and cash equivalents, equity and borrowings. Equity comprises of issued capital and retained profits.

The Group is not subject to any externally imposed capital requirements.

Significant accounting policies

Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses for each class of financial asset, financial liability and equity instrument are disclosed in note 3.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

- Trade and other receivables

- Cash at bank

- Trade and other payables

- Borrowings

- Investments

	2020 US$	2019 US$
Categories of financial instruments
Thegroupholdsthefollowingfinancialassets:
Financialassets at amortised cost Trade and other receivables	10,451,736	4,427,793
Restrictedinvestment	3,111,465	6,605,465
Cashandcashequivalents	50,540,672	34,011,557
Financialassets-Investment	2,785,507	4,420,891
Totalfinancial assets at amortised cost	66,889,380	49,465,706
Financialassetsatfairvalue	20,439,565	1,952,227
Totalfinancial assets	87,328,945	51,417,933

	2020 US$	2019 US$
32.Financial instruments (continued)
Thegroupholdsthefollowingfinancialliabilities:
Financial liabilities at amortised cost Trade and other payables	23,853,676	15,721,502
Leaseliabilities	5,002,144	5,464,909
Deferred Consideration	5,416,466	7,108,819
Loans	1,597,972	-
Borrowings	84,246,776	41,756,152
Total financial liabilities	120,117,034	70,051,382
General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Price risk

The Group's exposure to commodity price risk is dependent on the fluctuating price of the various commodities that it mines, processes and sells.

Theaverage market price of each of thefollowingcommoditieswas:
	2020	2019
Vametco	US$/kgV	US$/kgV
NV	23.56	48.87
MVO	17.18	-
AMV	17.53	19.09
FEV	22.33	-
	2020	2019
Vanchem	US$/kgV	US$/kgV
Vanadium Pentoxide Flake (FVP)	19.86	76.10
Vanadium Pentoxide Chemical (VCM)	22.79	38.47
SodiumAmmoniumVanadate(SAV)	32.97	-
Ammonium Metavanadate (AMV)	26.79	-
Ferro Vanadium (FEV)	22.56	-
Vanadyl Oxalate Solution (VOX)	-	14.17

If the average price of each of these commodities increased/decreased by 10% the total sales related to each of these commodities would have increased/decreased as follows:

Vametco	Effect on2020revenue US$	Effect on2020 netincome US$
NV	7,733,450	5,568,084
MVO	25,272	18,196
AMV	14,352	10,334
FEV	32,194	23,180
	7,805,268	5,619,794

	2020 US$	2019 US$
32.Financial instruments (continued)
	Effect on	Efect on2019net
Vametco	2019 revenue US$	income US$
NV	11,692,487	8,418,591
FEV	-	-
MVO	-	-
AMV	14,391	10,361
	11,706,878	8,428,952
	Effect on	Effect on2020net
Vanchem	2020 revenue US$	income US$
Vanadium Pentoxide Flake (FVP)	831,607	598,757
Vanadium Pentoxide Chemical (VCM)	114,420	82,382
SodiumAmmoniumVanadate(SAV)	5,246	3,777
Ammonium Metavanadate (AMV)	12,704	9,147
Ferro Vanadium (FEV)	994,299	715,896
	1,958,276	1,409,959
Credit risk

Credit risk is the risk that the counterparty fails to repay its obligation to the Group in respect of the amounts owed.

Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost, at fair value through other comprehensive income (FVOCI) and at fair value through profit or loss (FVPL), as well as credit exposures to customers, including outstanding receivables.

Risk management

Credit risk is managed on a Group basis. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The compliance with credit limits by customers is regularly monitored by line management.

The Group's investments in debt instruments are considered to be low risk investments. The credit ratings of the investments are monitored for credit deterioration.

Security

At 31 December 2020, the company held no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the company's maximum exposure to credit risk without taking account of the value of any collateral obtained. At 31 December 2020, no financial assets were past their due date. As a result, there has been no impairment of financial assets during the year. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Management considers the above measures to be sufficient to control the credit risk exposure.

Impairment of financial assets

The Group's only financial assets that are subject to the expected credit loss model are third party trade receivables.

Trade receivables

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

2020 2019

US$ US$

32. Financial instruments (continued)

The expected loss rates are based on the payment profiles of sales over a period of 36 month before 31 December 2020 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.

On that basis, the loss allowance as at 31 December 2020 was determined as follows for trade receivables:

Subsidiary	Expectedcreditloss rate	Grosscarryingamount US$	Lossallowance US$
Bushveld Vametco Alloys (Pty) Ltd	0.95%	312,230	2,966
Bushveld Vanchem (Pty) Ltd	1.94%	38,169	740
Bushveld Minerals SA (Pty) Ltd	1.94%	69,189	1,342
Bushveld Energy Company (Pty) Ltd	1.94%	72,651	1,409
BushveldVametcoLimited	0.93%	2,835,340	26,369
			32,826

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 120 days past due.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item. There were no impairment losses on trade receivables for the 2020 financial year.

It is the Group's policy that all suppliers who wish to trade on credit terms are subject to credit verification procedures. Credit risk arises from credit exposure to customers, including outstanding receivables and committed transactions.

Trade account receivables comprise a limited customer base. Ongoing credit evaluation of the financial position of customers is performed and granting of credit is approved by directors.

The Group's credit risk is considered by counterparty, geography and by currency. The Group has a significant concentration of cash held on deposit with large banks in South Africa, Mauritius and the United Kingdom and America with A ratings and above (Standard and Poors).

The concentration of credit risk by currency was as follows: Currency
Sterling	663,914	169,071
SouthAfricanRand	34,165,671	17,469,394
United StatesDollar	15,711,087	16,373,092
	50,540,672	34,011,557

At 31 December 2020, the Group held no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the Group's maximum exposure to credit risk without taking account of the value of any collateral obtained. At 31 December 2020, no financial assets were past their due date. As a result, there has been no impairment of financial assets during the year. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Management considers the above measures to be sufficient to control the credit risk exposure.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Ultimate responsibility for liquidity risk management rests with the Board of directors. The Board manages liquidity risk by regularly reviewing the Group's gearing levels, cash-flow projections and associated headroom and ensuring that excess banking facilities are available for future use.

2020 2019

US$ US$

32. Financial instruments (continued)

The Group maintains good relationships with its banks, which have high credit ratings and its cash requirements are anticipated via the budgetary process. At 31 December 2020, the Group had US$50,540,672 (2019: US$34,011,557) of cash reserves and borrowings of US$84,246,776 (2019: US$41,756,152). The Group will maintain its ability to service its borrowings over the next 12 months.

Market risk

The Group's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and interest rates.

Interest rate risk

The Group has interest bearing assets and liabilities, the Group's income and operating cash flows are dependent of changes in market interest rates.

As part of the process of managing the Group's interest rate risk, interest rate characteristics of new borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates.

2020 Interest bearing instruments	Value of loan	Interestchange by 100basispoint	Effect
Borrowings	(84,246,776)	1%	(842,468)
Cashandcashequivalents	40,260,188	1%	402,602
			(439,866)
2019 Interest bearing instruments	Value of loan	Interestchange by 100basispoints	Effect
Borrowings	(41,756,172)	1%	(417,562)
Cashandcashequivalents	25,462,528	1%	254,625
			(162,937)
Foreign exchange risk

As highlighted earlier in these financial statements, the functional currency of the Group is US Dollars. The Group also has foreign currency denominated assets and liabilities. Exposure to exchange rate fluctuations therefore arise. The carrying amount of the Group's foreign currency denominated monetary assets and liabilities, all in US Dollars, are shown below:

2020 US$		2019 US$
Cashandcashequivalents	34,829,585	17,638,465
Other receivables	4,818,931	2,170,847
Trade and other payables	(17,715,850)	(11,563,170)
	21,932,666	8,246,142

The group has transactional foreign exchange exposures, which arise from sales or purchases by an operating unit in currencies other than the unit's functional currency. The Vanadium market is predominately priced in US dollars which exposes the group to the risk of fluctuations in the SA rand/US dollar. The Group monitors and manages risk via the newly established internal audit function.

The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.

Fair value

The directors are of the opinion that the book value of financial instruments approximates fair value. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values.

2020 2019

US$ US$

32. Financial instruments (continued)

The Group used the following hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation technique:

Ÿ Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Ÿ Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Ÿ Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Of the Group's financial assets at fair value as described in note 21, US$20,148,778 is measured using level 1 techniques and US$2,304,099 is measured using level 3 valuation techniques.

Carrying

2020 2019

Carrying

Financial liabilities

amount Fair value

Trade and other payables	23,853,676	23,853,676	15,721,500	15,721,500
Borrowings	84,246,776	84,246,776	41,756,153	41,753,153
Deferredconsideration	5,416,466	5,416,466	7,108,819	7,108,819
Loans	1,597,972	1,597,972	-	-

*Management assessed that the fair values of cash and cash equivalents, restricted investment, trade and other receivables and trade and other payables, approximate their carrying amounts largely due to the short-term maturities of these instruments.

Carrying

2020 2019

Carrying

Financial assets

Trade and other receivables	6,692,165	6,692,165	4,427,793	4,427,793
Restrictedinvestments	3,111,465	3,111,465	6,605,465	6,605,465
Financialassets-investments	2,785,507	2,785,507	4,420,891	4,420,891
Financialassetsatfairvalue	20,439,565	20,439,565	1,952,227	1,952,227
Cashandcashequivalents	50,540,672	50,542,672	34,011,557	34,011,557

amount Fair value

33. Contingent liabilities Bank guarantee

As required by the Minerals and Petroleum Resources Act (South Africa), a guarantee amounting to US$6,204,018 (2019: US$6,461,513) before tax and US$4,446,893 (2019: US$4,652,290) after tax was issued in favour of the Department of Mineral Resources for the unscheduled closure of the Bushveld Vametco Alloys mine. This guarantee was issued on condition that a portion be deposited in cash with Guard Risk Insurance Company Ltd with restricted use by the Group, as per the below.

Restricted cash

As required by the Minerals and Petroleum Resources Act, a guarantee amounting to US$ 6,204,018 before tax and US$4, 466,893 after tax was issued in favour of the Department of Mineral Resources for the unscheduled closure of the mine. This guarantee was issued on condition that a portion be deposited in cash with Centriq Insurance Company Ltd with restricted use by the Group as per the below:

The restricted cash disclosed as a current asset consist of US$3,111,465 (2019: US$ Nil) paid to Centriq Insurance Company Limited; US$ Nil (2019: US$3,051,487).

For commercial reasons, the Company decided to consolidate its rehabilitation obligations into one insurance product. Guarantees previously held with Guardrisk Insurance Company Ltd (2019: US$3,553,978) and the Environmental Rehabilitation Trust (2019: US$3,051,487) where therefore consolidated into one guarantee from Centriq Insurance Company Ltd.

The guarantee is valid for three years, commencing on 1 June 2020 and the funds are only available if the agreement is terminated with a six months' notice period.

Suretyship

On 22 May 2019, the Company announced that it had agreed to provide a short-term standby working capital support facility to AfriTin for the amount of ZAR 30,000,000 (approximately US$2.1 million on 22 May 2019). AfriTin has subsequently secured a working capital facility for the amount of NAD 35,000,000 from Nedbank Namibia (the "Nedbank Facility"), with the support of Bushveld Minerals providing to stand surety for the Nedbank Facility to the value of NAD 30,000,000 (approximately US$2.0 million).

In the unlikely event of default, Nedbank will first call on the suretyship of the parent company of the AfriTin Group (i.e. AfriTin Mining Limited). In the event that AfriTin Mining Limited cannot meets its obligations under the facility, Nedbank will call upon the Bushveld Minerals suretyship.

The above is less onerous on Bushveld Minerals as it is not a cash collateralised guarantee. In addition, the terms agreed for the Working Capital Facility announced on the 22 May 2019 remain unchanged with respect to Bushveld Minerals. The Company is comfortable with the progress that AfriTin has made towards production at its Namibian flagship project and with the security it retains from AfriTin for the suretyship in the form of a notarial bond over the AfriTin processing plant.

34. Capital commitments

---------------------------------

2020 US$		2019 US$
Authorisedandcontractedfor	-	2,449,568
Authorisedbutnotcontractedfor	-	608,778
	-	3,058,346

35. Related parties

Relationships

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

VM Investments Limited is a related party due to two of the Executive Directors (Fortune Mojapelo and Anthony Viljoen) of Bushveld Minerals Limited being majority shareholders of VM Investments. VM Investments owns the offices rented by Bushveld Minerals Limited. The rent paid in 2020 financial period is US$159,651 (2019: US$176,474).

Services rendered by Ondra LLP for the amount of US$566,056 (2019: US$376,800) is classified as a related party transaction due to a non executive director (Michael Kirkwood) being a senior advisor at the firm.

The remuneration of key management personnel, being the directors and other executive committee members, is set out below. Further information about the remuneration of individual directors is provided in the Directors' remuneration report.

	2020 US$	2019 US$
Salariesandfees	2,181,022	1,772,702
Short-term incentives	144,055	881,934
Long-termincentives	564,420	346,157
	2,889,497	3,000,793
36.Events after the reporting period

The unprecedented impact of the COVID-19 pandemic, as well as the depressed governing sales price has had a negative impact on the Group's operational and financial position during the 2020 financial year. As such the Group has proactively engaged with Nedbank and have agreed to a covenant waiver for the testing periods 30 June 2021.

Bushveld Minerals Limited's strong balance sheet, including significant cash holdings, coupled with the actions it has taken to date demonstrates the Groups capacity to navigate through the uncertainties caused by the impacts of the COVID-19 pandemic. The subsequent price recovery has also improved the overall financial position of the business as its ability to operate as a going concern for the foreseeable future.

Enerox GmbH Investment

On 31 March 2021 Bushveld Energy invested US$5.0 million into VRFB-H and has invested approximately another US$2.7 million to retain its 50.5 percentage holding of VRFB-H. In turn, VRFB-H invested US$15 million into EHL to fund its part of the US$30 million investment into Enerox. The investment of VRFB-H into Enerox is in line with Bushveld Minerals' strategy to mobilise capital to scale up growth and capacity of VRFB manufacturers, either through self-funding mechanisms or through funding sharing arrangements. This strategy has been recently and successfully illustrated by Bushveld Minerals' investment and subsequent realisation of an interest in AIM-quoted Invinity Energy Systems.

Annual Report

A further announcement will be made by the Company once hard copies Annual Reports have been despatched to shareholders.

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