Q1 2024 Operational & Corporate Update

Bushveld Minerals Limited

23 April 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. 

23 April 2024

Bushveld Minerals Limited

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

Q1 2024 Operational & Corporate Update

Bushveld Minerals Limited (AIM: BMN), the primary vanadium producer, is pleased to announce an operational update for the three months ending 31 March 2024, along with a statement regarding the Company's working capital position.

Group highlights

Q1 2024

§ Q1 2024 production of 855 mtV (Q1 2023: 943 mtV).

-     Vanchem achieved a record quarterly production of 498 mtV.

-     Vanchem attained a record monthly production of 200 mtV in March 2024.

§ Q1 2024 weighted average production cash cost¹ (C1) of US$28.4/kgV (Q1 2023: US$25.9).

§ Q1 2024 sales of 880 mtV (Q1 2023: 1,028 mtV).

§ Q1 2024 Total Recordable Injury Frequency Rate ("TRIFR") of 0.00 (Q1 2023: 3.67).

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

CORPORATE

Update on Outstanding Funds

§ As previously announced, Acacia Resources Limited ("Acacia") was due to settle its subscription of US$3.5 million on or before 28 February 2024. The Company has not to date received the subscription monies from Acacia. Acacia is in breach of the terms of the subscription letter which it signed with the Company on 30 November 2023. The Company has instructed its lawyers to commence legal proceedings against Acacia.  

Update on Sale of a 50% interest in Vanchem and 64% interest in Mokopane to SPR

·      Following the announcement on 20 November 2023, regarding the sale of a 50% interest in the Vanchem vanadium processing plant for US$21.3 million and the sale of a 64% interest in a subsidiary that owns the Mokopane Vanadium project for US$3.7 million, the Company hereby announces that approval from the South African Competition Tribunal, initially anticipated for February 2024, is now expected to be granted at the earliest in July 2024. Following this, the sale of Vanchem and Mokopane will complete.

Working capital position

§ Due to the delay in receiving funds from Acacia and SPR, production has been materially adversely affected in the current quarter, particularly at Vametco. Coupled with notably weaker vanadium prices (declining between 10 and 17% year to date across different markets), the Company's working capital position is extremely tight. With the completion of the sale of 50% of Vanchem and its share of Mokopane to SPR being delayed, the Company is dependent on receipt of further funding to continue operations and is working with its stakeholders in this regard. The Group's cash balance as at 21 April 2024 was US$2.22 million, should further funding not be secured in the coming weeks, the Company may have to suspend operations.

Craig Coltman, CEO of Bushveld Minerals Limited, commented: 

"I am delighted to share that Vanchem achieved a record quarterly production and monthly production in March. The reduction in unit cash costs by approximately 25% at Vanchem, along with a near doubling in production relative to Q1 2023, demonstrates the success of our initial turnaround measures. This achievement is noteworthy despite the setback of losing 11 days of production in January due to the delayed settlement of funds.

Moving on to Vametco, as previously communicated, during the quarter we conducted a 25-day planned maintenance shutdown, which was completed in mid-February.

Notwithstanding the operational developments achieved to date, the delay in payments, coupled with the weaker realised Vanadium prices, now 15% lower than budgeted, has meant that our working capital position is extremely tight. However, we continue to engage with all stakeholders to resolve this issue. Lastly, we will provide 2024 guidance once we have clarity on the funding position." 

Conference call

Bushveld Minerals' Chief Executive Officer, Craig Coltman, and Interim Chief Financial Officer, Robbie Taylor, will host a conference call at 12:00 pm UK time (13:00 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  and Interim Chief Financial Officer, Robbie Taylor will host an investor session on 29 April 2024 at 11:00 am UK time (12:00 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	Q1 2024	Q1 2024 vs Q1 2023	Q1 2024 vs Q4 2023
Production	mtV2	855	-9.3%	-7.5%
Weighted average production cash cost1 (C1)	US$/KgV	28.4	9.8%	4.2%
Sales3	mtV2	880	-14.4%	-20.4%

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)

Description	Unit	Q1 2024	Q1 2024 vs Q1 2023	Q1 2024 vs Q4 2023
Ore mined	Tonnes	222 666	-33.7%	123.9%
Total mined (ore + waste)	Tonnes	255 951	-80.3%	14.5%
Ore grade (in Whole Rock)	% V2O5	0.76	7.0%	4.1%
Concentrate produced	Tonnes	69 969	-15.9%	-25.1%
Concentrate grade	% V	1.06	1.0%	0.0%
Recovery from Kiln to MVO	%	68.0	-7.7%	0.00%
Production (Nitro Vanadium)	mtV2	357	-47.7%	-39.4%
Production cash cost (C1)3	ZAR/KgV	619.6	53.1%	25.1%
Production cash cost (C1)3	US$/KgV	32.8	43.9%	24.3%
Foreign exchange rate	ZAR: USD	18.9	6.1%	0.7%

1.     Based on provisional, unaudited figures. Production cash cost is based on vanadium produced.

2.     mtV = metric tonnes of vanadium.

3.     Excludes depreciation, royalties and selling, general & administrative expenses. Production cash cost is based on vanadium produced. Production cash cost (C1) measure does not have any 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

§ Q1 2024 production of 357 mtV (Q1 2023: 682 mtV; Q4 2023: 589 mtV), mostly due to a planned 25-day Kiln maintenance shutdown during the months of January and February.

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

Costs

§ Q1 2024 production cash cost (C1) of US$32.8/kgV (Q1 2023: US$22.8/kgV; Q4 2023: US$26.4/kgV), mostly impacted by lower production volumes during the period, as a result of the planned maintenance.

VANCHEM

Operational highlights for Vanchem¹

Description	Unit	Q1 2024	Q1 2024 vs  Q1 2023	Q1 2024 vs  Q4 2023
Ore Milled	Tonnes	55 845	-32.5%	-30.8%
Ore Grade (in Whole Rock)	% V2O5	1.53%	9.2%	-1.4%
Milled ore to Kiln	Tonnes	48 348	-25.4%	-23.9%
Milled Ore Grade	% V	1.11%	17.0%	14.6%
Recovery: Kiln to Final Product	%	65%	-8.3%	-5.8%
Chemicals	mtV2	180	683.1%	374.0%
Flake	mtV2	166	1009.3%	-21.8%
FeV	mtV2	152	-32.0%	77.4%
Total production	mtV2	498	90.9%	48.3%
Production cash cost (C1)3	ZAR/kgV	478.1	-21.0%	-4.8%
Production cash cost (C1)3	US$/kgV	25.3	-25.8%	-5.6%
Foreign exchange	ZAR: USD	18.89	6.1%	0.7%

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

§ Vanchem achieved a record quarterly production of 498 mtV (Q1 2023: 261 mtV; Q4 2023: 336 mtV), underpinned by improved ore quality, improved online time and overall plant efficiencies.

-     Vanchem achieved a record monthly production of 200 mtV in March 2024.

§ Annual 23-day maintenance shutdown expected in May 2024.

Costs

§ Vanchem achieved a production cash cost (C1) of US$25.3/kgV (Q1 2023: US$34.1/kgV; Q4 2023: US$26.8/kgV), supported by higher production volumes during the quarter and cost savings initiatives.

-     Vanchem attained a monthly production cash cost (C1) of US$19.3/kgV in March 2024.

HEALTHY AND SAFETY

§ Q1 2024 TRIFR  of 0.00 (Q1 2023: 3.67),  supported by improved reporting of leading indicators analysed and implementation of safety measures.

VANADIUM PRICE & MARKET

§ Q1 2024 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$28.4/kgV, showing a decline from US$31.6/kgV achieved in Q4 2023. London Metal Bulletin ("LMB") (Europe) and Asian Metals ("AM") (Asia) averaged US$27.9/kgV and US$24.1/kgV respectively, with LMB marginally improving from US$26.6/kgV whilst AM remained unchanged when compared to US$24.2/kgV in Q4 2023.

§ 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