Vametco Mineral Resource and Ore Reserve Update

RNS Number : 7720Z

Bushveld Minerals Limited

22 May 2019

 

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.

22 May 2019

Bushveld Minerals Limited

("Bushveld Minerals" or the "Company")

Vametco Inferred & Indicated Mineral Resource and Ore Reserve Update

Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade vanadium assets, is pleased to provide an updated Mineral Resource and Ore Reserve for the Vametco vanadium mine near Brits on the Western Limb of the Bushveld Complex. The updated Mineral Resource and Ore Reserve incorporates data from the 2018 drilling campaign comprising 13 drillholes over a total of 1,506 m of diamond drilling, and has been compiled in accordance with JORC (2012).

Key Highlights

·      Ore Reserves have more than doubled to 279,100 tonnes V₂O₅ in magnetite (previously 137,152 tonnes V₂O₅ in magnetite), notwithstanding production of approximately 5,700 metric tonnes of vanadium (between October 2017 and March 2019) while the grade has increased by 3 per cent to 2.02 per cent V₂O₅ (previously 1.96 per cent V₂O₅).

·      Indicated Resources have increased by 187 per cent. to 965,900 tonnes of V₂O₅  in magnetite (previously 336,604   tonnes  V₂O₅  in magnetite).

·      The recently drilled holes added further confidence to the Mineral Resource resulting in a higher ratio of Indicated Mineral Resource to the Inferred Mineral Resources, constituting 75 per cent. of the Total Mineral Resource.

·      The aggregate Inferred and Indicated Mineral Resource is distributed across three Seams (The Lower, Intermediate and Upper Seams) and is reported as 186.7 Mt at an average grade of 1.98 per cent V₂O₅ (in magnetite), with an average magnetite content of 35.0 per cent (in whole rock) for 719,300 tonnes of contained vanadium.

·      Within this, the Ore Reserve in the Probable Category is reported as 48.4 Mt across the same three seams at an average grade of 2.02 per cent V₂O₅ (in magnetite), with an average magnetite content of 28.5 per cent (in whole rock) for 156,300 tonnes of vanadium.

·      The Lower Seam is the main ore seam and the thickest, ranging from 13.8 to 52.0 metres in thickness, comprising a Probable Reserve of 40.2 Mt at an average grade of 2.05 per cent V₂O₅ (in magnetite), with an average magnetite content of 29.4 per cent (in whole rock) for 135,600 tonnes of vanadium.

·      The 31 per cent increase in the 2019 Mineral Resource over the 2017 estimate is primarily attributed to reporting the Mineral Resource to a maximum depth of 150m below surface, versus 120m in 2017.

·      A relatively higher grade in the 2019 estimate resulted from better definition of the mineralised units due to the recent drilling, which allowed the re-scrutinising of historical data. This, together with reporting the Mineral Resource at a cut-off grade of 20 per cent magnetite (previously no cut-off grade was applied), resulted in a higher-grade Mineral Resource than in 2017, particularly for the Upper Seam that is now defined as a layer of massive magnetite.

·      The increase in the ore tonnages for the 2019 Ore Reserve estimate from 26.12 Mt to 48.43 Mt is due to the Mineral Resource definition work on the Intermediate and Upper Seams, which resulted in reclassification to the Indicated category, resulting in the conversion of an additional 8.19 Mt of Ore Reserves within the selected pit design. The additional 14.11 Mt of Ore Reserves from the Lower Seam is due to the larger pit shell from a Whittle pit optimisation based on the overall improved economics.

·      The magnetite content grade increase in the Ore Reserves from 26.8 per cent to 28.5 per cent is a direct result of the increase in magnetite content in the Mineral Resources. The impact of this translates to additional potential ore production and vanadium through the processing plant.

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: 

"Following a significant amount of exploration work, including drilling to greater depths, as well as a reinterpretation of the geological model to include the cut-off grade of the magnetite, we have been able to report a significant increase in Ore Reserves and grade from the 2017 estimate.

"The conversion of additional Indicated Mineral Resources to Probable Ore Reserves, plus the larger pit shell, means we have added significant increased production life at Vametco. In fact, even at the future expanded rates of production we have previously laid out, this mine will operate for decades into the future."

Table 1: Vametco Mineral Resource at a cut-off grade of 20% magnetite, 29 March 2019 - Gross Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in  magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Indicated	Upper	5.7	1.44	65.9	1.78	67.0	37.5
	Intermediate	28.7	0.68	32.7	1.91	179.2	100.4
	Lower	109.4	0.72	32.4	2.03	719.7	403.1
	Total	143.8	0.74	33.8	2.00	965.9	541.1
Inferred	Upper	10.5	1.46	63.5	1.75	116.3	65.1
	Intermediate	7.0	0.67	32.1	1.92	43.4	24.3
	Lower	25.4	0.74	31.3	2.00	158.5	88.8
	Total	42.9	0.90	39.3	1.92	318.2	178.2
Indicated and Inferred	Upper	16.2	1.45	64.3	1.76	183.3	102.7
	Intermediate	35.7	0.67	32.6	1.91	222.6	124.7
	Lower	134.8	0.72	32.1	2.03	878.2	491.9
	Total	186.7	0.78	35.0	1.98	1,284.1	719.3

Notes:

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

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

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

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

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

6.       Depleted as at 29 March 2019.

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

Table 2: Vametco Mineral Resource at a cut-off grade of 20% magnetite, 29 March 2019 - Attributable Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in  magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Indicated	Upper	4.2	1.44	65.9	1.78	49.6	27.8
	Intermediate	21.2	0.68	32.7	1.91	132.6	74.3
	Lower	81.0	0.72	32.4	2.03	532.6	298.3
	Total	106.4	0.74	33.8	2.00	714.8	400.4
Inferred	Upper	7.7	1.46	63.5	1.75	86.1	48.2
	Intermediate	5.2	0.67	32.1	1.92	32.1	18.0
	Lower	18.8	0.74	31.3	2.00	117.3	65.7
	Total	31.7	0.90	39.3	1.92	235.4	131.9
Indicated and Inferred	Upper	12.0	1.45	64.3	1.76	135.6	76.0
	Intermediate	26.4	0.67	32.6	1.91	164.7	92.3
	Lower	99.7	0.72	32.1	2.03	649.8	364.0
	Total	138.1	0.78	35.0	1.98	950.2	532.3

Notes:

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

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

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

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

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

6.       Depleted as at 29 March 2019.

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

Table 3: Vametco Ore Reserves, 29 March 2019 - Gross Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Probable	Upper	1.0	0.58	27.3	1.78	4.6	2.6
	Intermediate	7.2	0.53	23.7	1.89	32.3	18.1
	Lower	40.2	0.63	29.4	2.05	242.1	135.6
	Total	48.4	0.62	28.5	2.02	279.1	156.3

Notes:

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

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

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

4.       Ore Reserve tonnes depleted as at 29 March 2019.

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

Table 4: Vametco Ore Reserves, 29 March 2019 - Attributable Basis
Class	Seam Name	Tonnes	V2O5 grade of whole rock	Magnetite grade of whole rock	V2O5 grade in  magnetite	Tonnes V2O5 in magnetite	Tonnes V in magnetite
		(Millions)	%	%	%	(Thousands)	(Thousands)
Probable	Upper	0.7	0.58	27.3	1.78	3.4	1.9
	Intermediate	5.4	0.53	23.7	1.89	23.9	13.4
	Lower	29.8	0.63	29.4	2.05	179.2	100.3
	Total	35.8	0.62	28.5	2.02	206.5	115.6

Notes:

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

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

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

4.       Ore Reserve tonnes depleted as at 29 March 2019.

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

Enquiries: [e-mail]

Bushveld Minerals		[phone]
Fortune Mojapelo, Chief Executive Officer
Chika Edeh, Head of Investor Relations
SP Angel Corporate Finance LLP	Nominated Adviser & Broker	[phone]
Ewan Leggat / Richard Morrison
Jonathan Williams / Richard Parlons
Alternative Resource Capital	Joint Broker
Rob Collins		[phone]
Alex Wood		[phone]
BMO Capital Markets Limited	Joint Broker	[phone]
Jeffrey Couch / Tom Rider Michael Rechsteiner / Neil Elliot
Tavistock	Financial PR
Charles Vivian / Gareth Tredway		[phone]
Brunswick	Financial PR (South Africa)
Miyelani Shikwambana		[phone]

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low cost, integrated, primary vanadium producer, with ownership of high grade vanadium assets.

The Company's flagship vanadium platform includes a 74 per cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a primary vanadium mining and processing company; the Mokopane Vanadium Project and the Brits Vanadium Project.

Bushveld's vision is to become a significant, low cost, integrated primary vanadium producer through owning high grade assets. This incorporates development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage project developer and component manufacturer. Whilst the demand for vanadium remains largely anchored in the steel industry, Bushveld Minerals believes there is strong potential for an imminent and significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.

While the Company's focus is on vanadium operations and the development and promotion of VRFBs, it has additional investments in coal, power and tin.

The Company's approach to project development recognises that, whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production within a visible timeframe, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. This philosophy is core to the Company's strategy in developing projects.

Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com.

About Vametco

Vametco is located near Brits on the Western Limb of the Bushveld Complex. The integrated operation comprises a vanadium ore mine and a processing plant that produces Nitrovan^TM, a trademark product sold in major steel markets across the world. The mine lies adjacent to the Brits Vanadium Project, which will in future serve as an alternative source of near surface run of mine (ROM) ore feed to the Vametco plant.

The Vametco mining operation uses open pit bench mining methods to mine a well-defined orebody. The deposit is continuous with limited faulting and dips in a northerly direction at approximately 19 degrees.

ROM ore is fed into a primary, secondary and tertiary crushing circuit, followed by milling and magnetic separation to produce magnetite concentrates. The magnetite concentrates are fed into the extraction process which includes the kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide (MVO) in rotary calciners. MVO is fed into the mixplant and finally into the shaft furnaces to produce Nitrovan^TM. 

Competent Person's Statement

In accordance with the "AIM Rules - Note for Mining and Oil and Gas Companies", the information contained within the announcement has been reviewed and approved by Professor Richard Viljoen. Professor Richard Viljoen has more than 30 years' experience in the mining industry, including 15 years as chief consulting geologist for Gold Fields of South Africa. Notable past experience includes the development of significant mines including Northam Platinum and the Leeudoorn and Tarkwa gold mines, identifying and developing a significant platinum deposit in the Bushveld Complex for Akanani Resources as well as acting as consultant for exploration and mining companies in Canada, Mexico, Venezuela, India and China in the fields of base metals, gold and platinum. Professor Richard Viljoen has extensive experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2012). Professor Richard Viljoen consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

Glossary of Technical Terms

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

 

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