Full year 2023 Operational Update

Bushveld Minerals Limited

05 February 2024

 

Market Abuse Regulation ("MAR") Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. 

5 February 2024

Bushveld Minerals Limited

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

Full year 2023 Operational Update

Bushveld Minerals Limited (AIM: BMN), the primary vanadium producer, is pleased to announce its operational update for the 3 months and 12 months ending 31 December 2023.

Group highlights

Q4 2023

§ Q4 2023 production of 925 mtV (Q3 2023: 1,000 mtV).

§ Q4 2023 weighted average production cash cost¹ (C1) of US$27.3/kgV (Q3 2023: US$26.5).

§ Q4 2023 sales of 1,106 mtV (Q3 2023: 849 mtV).

12M 2023

§ 12M 2023 production of 3,714 mtV (12M 2022: 3,842 mtV), in line with guidance.

§ 12M 2023 weighted average production cash cost¹ (C1) of US$26.6/kgV (12M 2022: US$27.7/kgV).

§ 12M 2023 sales of 4,051 mtV (12M 2022: 3,584 mtV), owing to increased sales out of inventory.

§ 12M 2023 Total Recordable Injury Frequency Rate ("TRIFR") of 2.31 (12M 2022:10.32).

1.     Weighted average production cash cost (C1) is the blended weighted average production cash cost (C1) of Vametco and Vanchem, divided by group production.

2024 Group guidance and operational update

§ Group guidance has been suspended pending receipt of funds from Southern Point Resources. Due to the continuing default of Southern Point Resources ("SPR") in respect as part of the equity raise, the Company has had to suspend critical suppliers' payments and postpone some maintenance projects. The Company intends to provide an update on 2024 guidance in the Q1 2024 operational update.

§ January 2024 Group production of 267 mtV affected by the Company's current constrained cash position.

§ Annual scheduled maintenance to occur in Q1 and Q3 2024 for Vametco and Q2 2024 for Vanchem.

Post period highlights

§ On 1 February 2024, the Company announced that it had completed the refinancing of the unsecured convertible loan note issued to OMF Fund III (F) Ltd. ("Orion") for a total debt obligation of US$47.1 million (including accrued interest).

Craig Coltman, CEO of Bushveld Minerals Limited, commented: 

"I am pleased that we have met 2023 production guidance and I would like to commend our workforce for achieving the level of operational performance in H2 2023 given cash flow challenges faced. We are pleased to have announced the completion of the Orion convertible debt restructuring announced on 1st February 2024 and had hoped to have put our financial difficulties behind us, and so it is therefore disappointing that we have to suspend 2024 production guidance given the funding shortfall reported in recent announcements. Once the additional funding is received, we hope to stabilise production at both assets and achieve a more consistent performance."  

Conference call

Bushveld Minerals Chief Executive Officer, Craig Coltman, will host a conference call at 1:00 pm UK time (3:00 pm SAST) today to discuss the quarterly update with analysts and investors. Participants may join the call by dialling:

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

Password: Quote Bushveld Minerals when prompted by the operator.

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

Investor session  

Bushveld Minerals Chief Executive Officer, Craig Coltman will host an investor session on 8 February 2024 at 1:00 pm UK time (3:00 pm SAST) via the Investor Meet Company platform to discuss the operational update.

The session is open to all existing and potential shareholders. Investors can submit questions via Investor Meet Company dashboard up until 9:00am the day before the meeting.

Investors can sign up to Investor Meet Company for free and register for the event via:

https://www.investormeetcompany.com/bushveld-minerals-limited/register-investor      

Investors who already follow Bushveld Minerals on the Investor Meet Company platform will automatically be invited.

BUSHVELD VANADIUM

Group1	Unit	Q4 2023	12M 2023	12M 2023 vs 12M 2022	Q4 2023 vs Q4 2022	Q4 2023 vs Q3 2023
Production	mtV2	925	3,714	-3.3%	-21.9%	-7.5%
Weighted average production cash cost1 (C1)	US$/KgV	27.3	26.6	-3.9%	9.1%	3.3%
Sales3	mtV2	1,106	4,051	13.0%	22.2%	30.2%

1.     Based on provisional, unaudited figures.

2.     mtV = metric tonnes of vanadium.

3.     Reported as final sales to customers.

VAMETCO

Operational highlights for Vametco (on a 100% basis)¹

Description	Unit	Q4 2023	12M 2023	12M 2023 vs 12M 2022	Q4 2023 vs Q4 2022	Q4 2023 vs Q3 2023
Ore mined	Tonnes	99,463	1,061,947	-26.6%	-76.6%	-73.0%
Total mined (ore + waste)	Tonnes	223,503	2,317,537	-30.0%	-82.7%	-69.1%
Ore grade (in Whole Rock)	% V2O5	0.73	0.68	-21.8%	-16.1%	7.4%
Concentrate produced	Tonnes	93,466	359,905	-7.8%	-6.2%	13.7%
Concentrate grade	% V	1.06	1.05	2.0%	5.6%	1.0%
Recovery from Kiln to MVO	%	68.0	67.0	-7.4%	-3.8%	7.4%
Production (Nitro Vanadium)	mtV2	589	2,306	-14.8%	-27.5%	8.1%
Production cash cost (C1)3	ZAR/KgV	495.1	471.1	21.3%	33.0%	0.1%
Production cash cost (C1)3	US$/KgV	26.4	25.5	7.5%	24.9%	-0.4%
Foreign exchange rate	ZAR: USD	18.75	18.46	12.9%	6.4%	0.5%

1.     Based on provisional, unaudited figures. Bushveld's net attributable interest of the above figures is approximately 74%. Production cash cost is based on vanadium produced.

2.     mtV = metric tonnes of vanadium.

3.     Excludes depreciation, royalties and selling, general & administrative expenses. Production cash cost is based on vanadium produced. Production cash cost (C1) measure does not have any standardized meaning prescribed by IFRS and differs from measures determined in accordance with IFRS. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS. 

Production

§ Q4 2023 production of 589 mtV (Q4 2022: 812 mtV, Q3 2023: 545 mtV),  impacted by constraints at the barren dam and Sulphate Recovery Plant (SRP), reliability challenges at the leach plant and cashflow shortfalls.

§ 12M 2023 production of 2,306 mtV (12M 2022: 2,705 mtV), with production impacted by the aforementioned reasons.

Costs

§ Q4 2023 production cash cost (C1) of US$26.4/kgV (Q4 2022: US$21.1/kgV, Q3 2023: US$26.5/kgV), impacted by low production volumes during Q4 2023 partly offset by a weaker ZAR:USD exchange rate in Q4 2023 compared to Q4 2022 and Q3 2023.

§ 12M 2023 production cash cost (C1) of US$25.5/kgV (12M 2022: US$23.7/kgV), due to lower production volumes.

2024 Operational Update

§ 142 mtV produced in January, due to an ongoing 25 day Kiln maintenance shutdown.

-     The kiln is expected to be back online in mid-February.

§ A further 10-days maintenance shutdown is expected in Q3 2024.

VANCHEM

Operational highlights for Vanchem¹

Description	Unit	Q4 2023	12M 2023	12M2023 vs  12M 2022	Q4 2023 vs  Q4 2022	Q4 2023 vs  Q3 2023
Ore Milled	Tonnes	80,663	307,788	18.6%	-11.0%	-2.1%
Ore Grade (in Whole Rock)	% V2O5	1.55	1.52	2.0%	2.0%	1.0%
Milled ore to Kiln	Tonnes	63,547	234,385	26.1%	2.8%	9.3%
Milled Ore Grade	% V	0.97	0.97	2.1%	0.8%	-1.9%
Recovery: Kiln to Final Product	%	69.3	68.3	3.0%	12.4%	7.0%
Chemicals	mtV2	38	195	1.1%	-31.5%	-57.9%
Flake	mtV2	213	416	44.5%	0.7%	222.4%
FeV	mtV2	86	798	21.5%	-18.7%	-71.4%
Total production	mtV2	336	1,408	23.9%	-9.6%	-26.1%
Production cash cost (C1)3	ZAR/kgV	502.4	515.1	-15.3%	-15.2%	2.0%
Production cash cost (C1)3	US$/kgV	26.8	27.9	-24.9%	-20.3%	1.5%
Foreign exchange	ZAR: USD	18.8	18.5	12.9%	6.4%	0.5%

1.     Based on provisional, unaudited figures.

2.     mtV = metric tonnes of vanadium.

3.     Excludes depreciation, royalties and selling, general & administrative expenses. Production cash cost is based on vanadium produced. Production cash cost (C1) measure does not have any standardized meaning prescribed by IFRS and differs from measures determined in accordance with IFRS. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

Production

§ Q4 2023 production of 336 mtV (Q4 2022: 372 mtV, Q3 2023: 455), due to unplanned stoppages as a result of repeated refractory failures during the quarter. Accordingly, a decision was taken to bring forward part of the 2024 kiln reline maintenance programme shutdown to December 2023. In addition, cashflow challenges negatively impacted production.

§ 12M 2023 production of 1,408 mtV (12M 2022: 1,137 mtV), although production was impacted by the reason mentioned above, overall, the production increase was underpinned by the Vanchem turn around project implemented in H2 2023.

-     Highest yearly production since the asset was acquired by Bushveld.

Costs

§ Q4 2023 production cash cost (C1) of US$26.8/kgV (Q4 2022: US$33.6/kgV, Q3 2023: US$26.4/kgV), supported  by a weaker ZAR:USD exchange rate in Q4 2023 compared to Q4 2022 and Q3 2023, partially offset by a lower production volumes during Q4 2023.

§ 12M 2023 production cash cost (C1) of $27.9/kgV (12M 2022: US$37.2/kgV) supported by  higher production volumes and a weaker ZAR:USD exchange rate compared to 12M 2022.

2024 Operational Update

§ 125 mtV produced in January due to working capital constraints, resulting from delays in receiving the SPR funding.

§ Annual 23-day maintenance shutdown expected during Q2 2024.

BUSHVELD ENERGY

§ After the Bushveld Electrolyte Company's ("BELCO") plant's completion in August 2023 and the initial production run, the product samples were distributed to customers for qualification and compatibility. BELCO's electrolyte has already been successfully qualified by three international battery companies and is in the qualification process with others. The company is in discussion with multiple companies on possible supply contracts. Furthermore, BELCO has started the process of  looking for additional investors in its plant.  

§ As previously announced, the Group has commenced a sale process for its stake in CellCube, the process still ongoing and in discussion with various parties.

§ The Mini-grid's plant and all its components are undergoing site acceptance and grid compliance testing. The plant will generate approximately 10% of Vametco's electricity requirements.

HEALTHY AND SAFETY

§ Q4 2023 TRIFR  of 1.70 (Q4 2022: 5.97), 12M 2023 TRIFR at 2.31 (12M 2022: 10.32). The improvement is a result of the implementation of a safety diagnostic assessment action plan. Special focus was on leading indicators namely, visible felt leadership, planned task observations, inspections and addressing all the audits results.

Corporate update

§ Appointment of the interim Finance Director

Bushveld has appointed Robbie Taylor as non-board interim Finance Director. Robbie holds a bachelor's degree in commerce from the University of Cape Town and is a qualified Chartered Accountant.  He brings with him over 27 years of experience as a finance executive in various sectors. Robbie has extensive experience working with listed entities and multinationals.

His professional skills include areas such as Mergers and Acquisitions, Cost Control, Corporate Governance, Unit Economics, Profit Optimisation, Management Accounting and Financial Reporting, and Treasury. The Company will now commence the search of a permanent Finance Director.

VANADIUM PRICE OUTLOOK

§ Q4 2023 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$31.6/kgV, showing a decline from US$36.0/kgV achieved in Q3 2023. London Metal Bulletin and Asian Metals averaged US$26.6/kgV and US$24.2/kgV respectively, also declining from US$31.5/kgV and US$31.0/kgV in Q3 2023, respectively.

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

ENDS

Enquiries: [e-mail]

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

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a primary vanadium producer, it is one of only three operating primary vanadium producers, with a diversified vanadium product portfolio serving the needs of the steel, energy and chemical sectors.

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

 

END