TIDMBMN
RNS Number : 0221T
Bushveld Minerals Limited
29 June 2018
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
29 June 2018
Bushveld Minerals Limited
("Bushveld" or the "Company")
Final Results for the Period Ended 31 December 2017
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated
primary vanadium producer, with ownership of high grade assets, is
pleased to announce its financial results for the period ended 31
December 2017.
The Annual Report to 31 December 2017 will be available on the
Company's website later today at the following link:
http://bushveldminerals.com/financialreports.aspx
A printed copy of the 2017 Annual Report will be posted to the
Company's shareholders as per individual request. A copy of the
Notice of the Annual General Meeting to be held at 18-20 Le Pollet,
St Peter Port, Guernsey GY1 1WH at 11 a.m. on Wednesday 8th August
2018 will also be posted to all shareholders.
Highlights
Bushveld Minerals
-- Successfully implemented the acquisition of Vametco over two
phases, the second phase completed on 21 December 2017.
-- Vametco is a high-quality, low cost vanadium producer. In
2017, Vametco produced 2,649 mtV in the form of Nitrovan(R) from
magnetite concentrate which accounts for more than three per cent
of global vanadium supply.
-- Phase 1: completed 06 April 2017
- Bushveld Vametco Limited ("BVL") acquired a 78.8 per cent
interest in Strategic Minerals Corporation ("SMC") from Evraz Group
S.A., with Bushveld Minerals Limited owning a 45 per cent interest
in BVL and Yellow Dragon Holdings Limited ("Yellow Dragon") owning
the remaining 55 per cent.
- Bushveld Minerals, effective shareholding in the operating
company was that of an associate and was thus equity accounted for
from 6 April 2017.
-- Phase 2: completed 21 December 2017
- Bushveld Minerals Limited acquired Yellow Dragon's 55 per cent
interest in BVL to increase its shareholding in BVL to 100 per
cent. Following the acquisition, Bushveld Minerals Limited
effectively owns 59.1 per cent of the operating company, which as a
subsidiary was consolidated from 21 December 2017.
-- Bushveld Minerals agreed to support Jaxson 640 (Proprietary)
Limited's acquisition of a controlling interest in the Black
Economic Empowerment ("BEE") shareholding in Vametco Holdings
(Proprietary) Limited.
-- In November 2017, the Company completed the demerger of
Greenhills Resources, creating AfriTin Mining Limited ("AfriTin"),
a standalone African tin platform.
Bushveld Vanadium
-- Successfully completed the majority acquisition of Vametco
vanadium mine in December 2017 to increase the Company's effective
interest in the operation to 59.1 per cent.
-- Successfully expanded Vametco's production to 3,035 mtV
through phase one of a three-phased expansion project.
-- On a 100 per cent basis, Vametco reported a Revenue of ZAR
1,052 million and an EBITDA of ZAR 318 million, an increase of 39
per cent and 558 per cent respectively, relative to the prior
year.
Bushveld Energy
-- Completed the studies on African VRFB demand and global
electrolyte demand, in partnership with the Industrial Development
Corporation ("IDC").
-- Secured agreement with South African local utility Eskom for
the deployment of the first VRFB in South Africa (announced in
November 2017). VRFB commissioning expected to commence in the
first half of 2018.
Lemur Holdings
-- Signed Memorandum of Understanding ("MoU") with Sinohydro
Corporation Limited for joint development and funding options for
the Imaloto Power Project in Madagascar.
- Executed a binding Power Purchase Agreement ("PPA"), with
Madagascar state-owned utility, Jiro sy Rano Malagasy ("JIRAMA")
for an initial 10MW executed as part of the Imaloto Power
Project.
- Post year end, executed a binding 30-year concession agreement
with the Government of the Republic of Madagascar.
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
Ewan Leggat
Richard Morrison
Alternative Resource Joint Broker
Capital
Rob Collins +44 (0) 207 186 9001
Alex Wood +44 (0) 207 186 9004
Tavistock Financial PR +44 (0) 207 920 3150
Charles Vivian
Gareth Tredway
Lifa Communications Financial PR +27 (0) 711 121 907
Gabriella von Ille
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulations (EU) No. 596/2014.
About Bushveld Minerals Limited
Bushveld Minerals is a low cost, integrated, primary vanadium
producer, with ownership of high grade assets.
The Company's flagship vanadium platform includes a 59.1 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. The coal platform
comprises the wholly-owned Imaloto Coal Project, which is being
developed as one of Madagascar's leading independent power
producers. The Company's tin interests are held through its
shareholding in AIM listed AfriTin Mining Limited.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through owned 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 solutions provider.
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 the 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(R) , 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 mix plant and finally into
the shaft furnaces to produce Nitrovan(TM) .
Chairman's Statement
2017 was a transformational year for Bushveld which saw the
Company significantly progress the development of each of its
platforms. A testament to the tenacity of our management team, the
successful completion of the Vametco vanadium mine acquisition in
December was a landmark transaction for Bushveld, transforming the
Company from being an explorer to a low cost producer with a
strategy to become a leading vertically integrated vanadium
producer.
Since 2014, Bushveld has operated a commodity focussed platform
strategy leading to the adoption of a clear model for long term
growth and the development of three independent platforms: Bushveld
Vanadium (vanadium); Greenhills Resources (tin); and Lemur (coal
and power). The past year has seen each platform make considerable
progress in becoming a standalone operating platform, particularly
in the case of Greenhills Resources, which gained independent
listing on the AIM market of the London Stock Exchange.
The Company's flagship platform is Bushveld Vanadium, and this
is undoubtedly where we made most progress as a Company. The
acquisition of Vametco could not have been completed at a more
opportune time for the Company, with vanadium prices on a solid
upward trajectory throughout 2017, a trend that has continued in
2018. Our long-standing strategy has not changed which is to build
a leading vertically integrated vanadium producer focussed on
enhancing growth both horizontally and vertically.
Horizontally we seek to grow our production volumes to meet
growing demand from the steel and energy storage sectors, while our
vertical growth speaks to our efforts to participate downstream
along the vanadium value chain.
The focus on the vanadium platform resulted in the demerger of
the Company's tin platform, Greenhills Resources, into a standalone
company on AIM, renamed AfriTin Mining Limited. AfriTin was
admitted on AIM on 9 November 2017. The transaction significantly
simplified Bushveld's group structure, enabling the Board and
management team to focus on the vanadium platform, while allowing
shareholders continued ownership of AfriTin's assets. The Company
is confident that AfriTin will continue to build on its position as
a leading African tin exploration and development mining company.
In addition, following his appointment as Chief Executive Officer
of AfriTin Mining, Anthony Viljoen stood down as an executive
director at Bushveld Minerals. Anthony continues to serve as
non-executive director of the Company.
The Board believes that high standards of governance are crucial
to deliver our strategy, create long term value and maintain our
licence to operate. Accordingly the Board is always looking at ways
of improving the Company's corporate governance and assurance
process.
The Board of Directors takes a rigorous approach to Board
planning. It considers skills, experience and attributes required
to effectively govern and manage risk within Bushveld Minerals. As
a result, post year end the Board appointed Michael Kirkwood as
independent non-executive director. Michael is a highly experienced
and well respected former international banker, having worked at
the highest levels of Citigroup during his 31-year career with the
bank. He was latterly the UK country head and chairman of the
Corporate Bank and is currently a non-executive director of
AngloGold Ashanti Ltd and Chairman of Ondra LLP.
The Board is also determined to ensure that it continues to have
the right balance of Directors and carries on with its high level
of responsibilities and corporate governance. This process is
continuous, and we will bring additional focus to ensuring the
Board evolves to take account of the rapidly changing external
environment in which Bushveld Minerals operates.
Post year end, the Company successfully raised US$22.2 million
(GBP15.7 million) (before expenses) by way of an oversubscribed
share placing. The placing was led by key UK institutional
investors and a consortium of cornerstone investors, including the
original founders of Mimosa Platinum and LionOre Mining
International, as well as the key investors in Mantra Resources at
its inception. We are delighted to welcome these new investors as
shareholders of the Company.
Bushveld continues to endeavour to build its business and
strategy in a way that ensures stakeholders and the communities in
which it operates benefit from and are involved in the Company's
operations. This mantra is at the heart of our business and we
shall continue to adhere to this along with the mining regulations
in the jurisdictions in which we operate. The draft new Mining
Charter for South Africa was announced Friday 15 June 2018,
requiring that the Black Economic Empowerment ("BEE") shareholding
set to increase to 30 per cent within five years. The new and
renewal of existing mining rights will require 14 per cent for
black entrepreneurs and 8 per cent ownership for both communities
and employees, thus totalling 30 per cent. Whilst the 30 per cent
requirement was expected, the new announcement is a 5 per cent free
carry provision for both communities and employees, within the 8
per cent. The Charter also mandates a trickle dividend of one per
cent of EBITDA to employees and communities respectively from the
6th year where dividends are not previously declared during the
said period. The move towards finalising the Mining Charter and
thus bringing much needed certainty is welcome. There remains,
however, several provisions in the draft Charter that will no doubt
be challenged as a consequence of which we expect some revisions
before it is finalised. The Company will thus continue to exercise
caution in dealing with the Charter until it is finalised.
The Bushveld Minerals story is at heart a South African story of
the successful development of a significant global platform from
early stage exploration through innovative acquisitions to
establish an attractive portfolio of quality, low-cost and cash
generating assets. It is thus only natural that the Company would
seek a South African capital markets base. Accordingly, Bushveld
Minerals is considering the option of listing on the Johannesburg
Stock Exchange in the near future, a move that will allow South
African investors access to its story while broadening the
Company's access to capital to facilitate its aggressive growth
plans and enhance its profile further in the global capital
markets.
The Board recognises the importance of returns to shareholders,
and consequently it has determined that during the second half of
2018, Bushveld Minerals will define a capital allocation framework,
which will outline an approach and strategy towards shareholder
return, value creation through investments and financial
performance.
The Board believes that the Company is uniquely placed in a
buoyant market to grow into a leading vertically integrated
vanadium producer. Bushveld has a quality primary vanadium asset
portfolio, a strategy to develop this and to become an integrated
player. In addition, it has partners and a team in place to deliver
this.
After what can only be described as an incredibly significant
and transformational year, the year ahead promises to continue in
the same way. The 2018 year promises to be another busy and
exciting one for the Company as we look to further develop
Bushveld's platforms.
I would like to thank our management team for their considerable
efforts in what has been a challenging but exciting time for our
Company. The business is dependent upon the hard work, dedication
and skills of all our team. I would in particular like to thank our
CEO Fortune Mojapelo, who has led the Company and team in an
exemplary way. Also, to my colleagues on the Board, I extend my
appreciation for their wise counsel and advice that I have received
this year. I look forward to supporting Fortune and the management
in our pursuit of long term value creation for all our
shareholders.
Ian Watson
Non-Executive Chairman
CEO Report
Introduction
In the past year, Bushveld Minerals made significant progress to
deliver on its strategy to become one of the most significant,
lowest cost and vertically integrated primary vanadium producers in
the world. benefiting from a high grade resource embedded within
the Company's portfolio. We remain focused on delivering on our
stated objectives supported by an outstanding management team,
great partners, a portfolio of world class assets and strong market
conditions.
The highlight of the year was the completion of the acquisition
of the Vametco primary vanadium mining and processing plant
("Vametco"), providing Bushveld with a high-quality asset producing
a high quality vanadium product for a significant global customer
base.
Acquisitions of Strategic Minerals interest and Vametco
During 2017, Bushveld Minerals completed the acquisition of a
78.8 per cent interest in Strategic Minerals Corporation ("SMC"),
which holds a 75 per cent shareholding in the vanadium mining and
processing companies Vametco Holdings (Proprietary) Limited and
Vametco Alloys (Propriety) Limited. This acquisition transformed
the Company from an exploration company into a significant vanadium
producer with no less than 3 per cent of the global vanadium market
share.
The Vametco acquisition was conducted over two phases. During
the first phase, Bushveld partnered with Yellow Dragon Holdings
Limited ("YDH") to acquire a 78.8 per cent interest in SMC from the
Evraz Group S.A. The partnership was structured through Bushveld
Vametco Limited ("BVL"), of which Bushveld held 45 per cent while
YDH held the majority 55 per cent. This phase was completed on 6
April 2017.
On 21 December 2017 Bushveld Minerals completed the acquisition
from YDH of 55 per cent of the issued share capital of BVL, being
all of the ordinary share capital that was not owned by the
Company. Following the completion of this transaction, the Company
now owns an effective 59.1 per cent indirect beneficial and
economic interest in the Vametco vanadium mine.
The value of the Vametco acquisition to Bushveld cannot be
over-stated. The Vametco transaction, with a purchase price that
was less than ten per cent of replacement value, is an excellent
testament of the Company's strategy of targeting brownfield
processing infrastructure which can be acquired at a fraction of a
greenfield operation and provides a lower risk and quicker path to
production. It provides Bushveld with a low-cost, scalable and
profitable vanadium production platform from which the Company can
grow and implement its vision of a large, vertically integrated
vanadium company with a diversified vanadium products portfolio.
Some of the benefits of the acquisitions are summarised below:
-- It immediately transforms Bushveld from an exploration
company into a producing company with a significant share of the
global vanadium market. Vametco enjoys more than a three per cent
share of the global vanadium market; which is expected to grow to
more than 5 per cent by 2019;
-- It gives the Company exposure to vanadium production and cash
flows at an opportune time. Vanadium prices have risen from
US$19/kgV when the acquisition was first announced to US$43/kgV
when the second phase of the transaction was completed.
-- While Vametco is benefitting handsomely from the surge in
vanadium prices, it is well positioned to continue generating cash
flows even in a low-price environment, owing to its low-cost
production base;
-- The acquisition comes with a solid management team with more
than 100 years combined experience in vanadium mining and
processing and adds depth to Bushveld's management capacity
-- The production base has the potential to expand by the end of
2019 to 5,000 mtV per annum, supported by one of the largest
primary vanadium resource bases in the world (under the ownership
of Bushveld);
-- Vametco has the potential to diversify its product range
beyond its Nitrovan(R) product; and
-- It is aligned with the Company's aspirations in the global
energy storage space by providing capacity for potential
electrolyte manufacturing.
Non-core asset strategy
Bushveld has since inception in 2012 operated a
multi-commodity-focussed platform strategy since 2012. This
approach has led to the adoption of a clear model for long term
growth and the development of three independent platforms: Bushveld
Vanadium, Greenhills Resources (now listed on AIM as AfriTin) and
Lemur.
Four key pillars have guided the subsequent development of the
Company's projects:
-- Identifying commodities with a positive market outlook;
-- Developing assets with low cost curve positioning;
-- Developing a viable low capital expenditure, realisable path
to production and, thus cash flow generation; and
-- Ensuring project scalability
In late 2013 the Company pivoted on vanadium and has since
developed its vanadium platform as the Company's flagship while the
strategy for the other platforms focussed on building critical mass
for a short-term spin-off into stand-alone platforms. That strategy
resulted in the demerger and listing of AfriTin Mining Limited in
November 2017. The Company has made significant progress in
building critical mass in Lemur for a future as a standalone coal
and energy focused platform. Efforts are underway to evaluate
various options in respect to the future.
The Company's vision
The Company's vision is to grow into a significant, low cost,
vertically integrated vanadium platform that comprises of:
-- One of the largest high-grade primary vanadium resource bases
in the world, as well as becoming a leading primary vanadium
production source;
-- A low cost position on the production cost curve, leveraging
the high in-situ and in-magnetite V(2) O(5) grades and the
open-cast mining proposition of Bushveld's deposits, as well as
access to low cost brownfield processing infrastructure; and
-- Development of downstream operations beyond production of
end-use vanadium products to include development and deployment of
vanadium applications in industries such as the energy storage
market, where Bushveld intends to manufacture vanadium electrolyte
and to build VRFBs.
Bushveld Vanadium
Vametco
Vametco had a solid performance in the 2017 calendar year,
supported by a strong vanadium price environment with the
ferrovanadium price averaging US$33/KgV for the 12 months. Vametco
produced 2,649 mtV (Nitrovan(R) and FeV) during the 2017 calendar
year. Unit production costs for the 2017 calendar year were ZAR
220/KgV (US$16.6/kgV).
Vanadium production guidance for the 2018 calendar year remains
unchanged at approximately 3,680 mtV. Following the completion of
phase two of the expansion project by the end of June 2018,
Vametco's production capacity will ramp up from the current 3,035
mtV to 3,750 mtV per annum. The capital expenditure programme is
being funded from operational cashflow.
In 2017, Vametco commenced a three-phased expansion project with
the aim of increasing annualised production capacity to 5,000 mtV
by the end of 2019. Phase one of the expansion plan was
successfully completed on time and on budget in the third quarter
of 2017, during which time Vametco reached an annualised production
capacity of 3,035 mtV. Phase two of the expansion was, completed on
time and in budget in June 2018, resulting in Vametco achieving an
annualised production capacity of 3,750 mtV. Phase three of the
expansion will increase Vametco's annualised production run rate to
5,000 mtV by 2019. Completion of the expansion project will enhance
Vametco's existing competitive position in a structurally
challenged market.
Mokopane Vanadium Project
The Mokopane Vanadium Project is a key part of Bushveld's
vanadium strategy. The project comprises one of the world's largest
primary vanadium resources hosted in the three adjacent layers of
the Main Magnetite Layer ("MML"), the Main Magnetite Layer-Hanging
Wall ("MML-HW") and the AB Zone. The MML hosts high in-situ grades
of 1.4 per cent V(2) O(5) and in-concentrate 1.75 per cent V(2)
O(5) grades and was the basis for the Pre-Feasibility Study
completed in January 2016. An application for a New Order Mining
Right was lodged in March 2015 and is currently being processed by
South Africa's Department of Minerals Resources. The Company is in
ongoing discussions with the Department of Mineral Resources with a
view to being granted a New Order Mining Right and significant
progress has been made during the year. The Company has also been
progressing in ongoing consultations with the local community and
continues to evaluate ways to bring the asset into production in
the most cost-efficient manner possible. Efforts are also
continuing to find strategic partners for the project. The
intention is to secure a mining right and develop the project as a
greenfield mining and processing plant; or as mining operation
supplying ore to China and or other brownfield processing
plants.
Brits Vanadium Project
The Company has begun an exploration programme at the Brits
Vanadium Project, which comprises prospecting rights on several
farms adjacent to Vametco, with the aim of establishing a maiden
Mineral Resource Estimate. After the year end, a soil geochemical
sampling programme and ground magnetic survey were carried out over
the project area. Interpretation of the results of this work has
led to several drilling targets being delineated.
Drilling on these targets commence, post year end, in March
2018, and thus far eight diamond drill holes have been completed,
totalling 833.08 metres. The Lower Seam (the primary orebody mined
at the adjacent Vametco Mine) has been intersected in several drill
holes, and the Intermediate Seam and Upper Seam have also been
intersected in some drill holes.
Drill cores are currently being logged and assayed, with the
assays being carried out at the Vametco mine laboratory and
confirmed by an independent external laboratory. The Company
expects to publish the results as they are received. The Company
will also commence an infill drilling programme at the project and
will begin estimation of the Mineral Resource once logging,
sampling and assaying of all drill holes has been completed.
Bushveld Vanadium production plan
Through its expansion initiatives at Vametco, as well as
targeted brownfield opportunities, the Company is looking to expand
its production to 5,000 mtV by the end of 2019 and to more than
10,000 mtV in the medium term.
Bushveld Energy
Bushveld Energy was established with the objective of not only
promoting the adoption of vanadium in the energy storage industry
through vanadium redox flow batteries ("VRFBs") but also exploiting
the multi-billion dollar commercial opportunity that the energy
storage industry presents.
The Company believes that VRFBs are well positioned to take a
significant share of the global utility-scale energy storage
market, where their distinctive features, including low
life-of-battery costs, flexible scalability, long duration energy
storage capacity and inherent safety give them a significant
advantage over other technologies. These, and more advantages, are
increasingly recognised as global deployments of VRFBs grow year on
year.
Since its establishment, Bushveld Energy has made significant
progress defining the energy storage market opportunity, building
industry awareness for VRFB and developing a business model for
Bushveld Energy. The business model is anchored in Bushveld
Minerals' low-cost production platform and smart partnerships along
the VRFB value chain. To date Bushveld Energy has signed a
cooperation agreement with the Industrial Development Corporation
("IDC") a local state-owned development finance institution; a
Memorandum of Understanding with USA-based VRFB manufacturer Uni
Energy Technologies (UET).
During the past year, in particular, the company has made
significant progress, including the following:
a) Completion of two key studies carried out in cooperation with the IDC:
The "African VRFB demand" and "Global Electrolyte Demand"
study
The study results indicated highly favourable demand for VRFBs,
especially in the utility and off-grid, mini-grid use cases,
peaking in 2025-2030. It also showed that global electrolyte demand
is likely to peak in the same time frame at 1200-1800 megawatt
hours ("MWh") or 40-60 megalitres ("ML") per annum. Conservatively,
the company believes there is the potential for Bushveld to supply
an initial 5-10ML of this demand, supporting supply of an initial
200MWh in energy storage per annum.
A techno-economic study for the manufacture of vanadium
electrolyte in South Africa
The study results highlighted that Bushveld Energy can
manufacture electrolyte on a cost-competitive basis, thereby
allowing it to compete both regionally and globally. A scalable
plant can be configured with an initial annual production capacity
of 200-400MWh. The estimated initial capital expenditure for the
plant would be in the region of ZAR130 million (US$9.7 million), of
which more than 75 per cent comprises balance of plant. A follow-up
locational analysis recommended a dual location design.
Pre-purification would be performed at Vametco to reduce capital
expenditure through co-location. The second part of the plant will
be focussed on electrolyte production and mixing and will be
located in an Industrial Development Zone ("IDZ") in close
proximity to a port, positioning it well for export opportunities.
While the most significant driver of costs (upwards of 70 per cent)
is the vanadium feedstock, Bushveld has access to locally
available, low cost supplies within its own portfolio. This gives
both the Company and South Africa a natural
competitive advantage.
b) Secured an agreement with South Africa's utility Eskom for a 120kW / 450 kWh VRFB project
In November last year, Bushveld Energy confirmed that the first
utility scale VRFB would be deployed in South Africa. The project
includes our two existing strategic partner entities: the IDC as a
co-developer, and USA-based UET as the VRFB manufacturer. The
system will be deployed with Eskom at its Research, Testing and
Development ("RT&D") Centre in Rosherville, South Africa. This
follows Eskom's identification of the need for potentially up to
2,000MW of additional, daily balanced energy storage within the
existing grid earlier this year. The project will see the
installation of a VRFB with peak power of 120 kW and peak energy of
450 kWh.
The project will allow Eskom to test the VRFB and its
performance and applications under numerous simulations and help
build the business case for battery energy storage for Eskom.
Bushveld Energy is also performing the project integration to the
RT&D's existing micro-grid.
Since the year end, work has continued on this project and
manufacturing of the Direct Current ("DC") portion of the VRFB has
been completed with factory acceptance gained in April 2018. Site
preparation work has commenced at the Eskom site, which has
included earthworks and cabling. Two technicians from South Africa
have also been appointed to perform the installation and
maintenance on the Eskom project. Technicians were trained at UET,
in April 2018. This will give Bushveld Energy the capability to
install and maintain future VRFB installations in South Africa and
regionally. The entire system is still on track to be delivered
towards the end of the second quarter of 2018.
Electrolyte facility
A key part of Bushveld Energy's strategy is the creation of an
electrolyte production facility which Bushveld Energy is looking to
establish with the IDC. Post year end, an international chemicals
company that has already designed and built a vanadium electrolyte
production plant with multiple megalitre annual capacity, was
engaged by Bushveld Energy. The scope of the engagement at this
stage includes independent verification and improvement of the
existing process flow and plant design to cover both the process at
Vametco and that of the greenfield facility in the East London
Industrial Development Zone ("EL IDZ"). Greater certainty of the
cost estimate for the dual-located processing assets, as well as
joint work with Bushveld Energy and Bushveld Vametco to expand
Vametco's current laboratory capabilities to include testing of
electrolyte in-house and production of batch, single-acid vanadium
electrolyte as samples to prospective VRFB customers. This stage
also includes the preparation of the project for the Engineering,
Procurement and Construction ("EPC") phase, which is planned for
the third quarter of 2018 as well as tendered for environmental
assessment that needs to be performed at both Vametco and EL
IDZ.
Bushveld Energy Strategy
We see 2018 as a transformational year for Bushveld Energy.
Development work to date is expected to yield results in the form
of:
1) Proving the Company's capabilities and securing its position
as a developer and integrator of utility scale energy storage
projects by delivering its initial projects and securing large
scale energy storage mandates in Africa;
2) Positioning itself as a key electrolyte supplier, by
supporting the global industry through the low cost production of
electrolyte while securing offtake agreements; and
3) Securing additional strategic relationships with downstream
stakeholders in the global vanadium battery supply chain and
electrical power developers and producers operating in Africa
With these developments, the company will be in a position to
outline its business model, cash flow capabilities and valuation
contribution within Bushveld Minerals.
Lemur Holdings
The addition of a power component to Lemur's JORC compliant and
resource of approximately 136 million tonnes supports Lemur's plans
to unlock the value of this coal asset in Madagascar, while
simultaneously securing a reliable electricity offtake backed by a
government entity.
The Company was also delighted to appoint Prince Nyati as CEO of
Lemur during the year. Prince has extensive experience in the
international energy and mining sector and the team look forward to
working with him to deliver Lemur's strategy.
Excellent progress was made during the year at Lemur. Key among
these was the execution of a binding 30-year Power Purchase
Agreement (PPA) in November 2017 between Lemur's Madagascar
subsidiary, Imaloto Power Project SARL and state-owned utility,
JIRAMA.
Prior to this development, in March 2017, Lemur signed a
technical cooperation agreement with Sinohydro Corporation Limited
("Sinohydro"), a subsidiary of Power China, to develop the power
project and also to look at funding options. Sinohydro is also
completing the bankable feasibility study ("BFS") under the same
agreement.
In October 2017, Lemur appointed an owner's Engineer, together
with other technical, environmental and legal advisors to support
the development phase of the project. During the reporting period,
Lemur conducted the load demand and transmission routing study to
understand the load demand in the catchment area and to align the
design and phasing of the power plant capacity in the catchment
area. These studies are critical to concluding the BFS on the
project.
Post year end, Lemur has, through Imaloto Power Project SARL,
executed a binding 30 year concession Agreement with the Government
of the Republic of Madagascar, represented by the Ministry of
Energy and Hydrocarbons for the approval to develop, construct,
operate and maintain the Imaloto Power Project in Madagascar.
With regard to government approvals and regulatory compliance,
it is important to note that in addition to the concession, Lemur
also started the Social, Environmental and Impact Assessment (SEIA)
post year end.
Lemur 2018 priorities
2018 promises to be another strong year for Lemur with a number
of key milestones that the Company is looking to deliver. These
include:
-- Concluding the SEIA Study;
-- Pursuing further funding and credit enhancement options for
the Project, which has already been initiated;
-- Securing additional power offtakes in addition to the current demand from JIRAMA;
-- Seeking to conclude coal offtakes with third parties. It is
important to note that the coal mine is viable with only supplying
coal to the Power Project. Notwithstanding, supplying coal to third
parties provides early cashflows prior to commissioning of the
power plant; and
-- Further exploring strategic partnerships for the Project.
Lemur is well placed to achieve these milestones and the Company
is confident that the projected Power Project will be commissioned
in 2021.
Financial Report
The most significant transaction during the year was the
acquisition of Vametco, which provides Bushveld with a strong cash
generating asset. In 2017 Vametco generated ZAR 1,052 million in
Revenue and ZAR 318 million in EBITDA. As the acquisition of
Vametco was completed on 21 December 2017, resulting on Bushveld
Minerals having an effective 59.1 per cent economic interest in
Vametco, the reported Bushveld Minerals results reflect Vametco's
consolidated performance only from 21 December 2017.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a priority for Bushveld
Minerals. We are proud of the Company's achievements and strive to:
1) create value in the communities in which it operates; 2)
maintain safe operations; and 3) minimise social and environmental
impact. Through our programmes with the communities we have
developed trusting relationships and seek to prioritise the health
and safety of our employees and host communities who work with us.
We have made significant progress in 2017 and we will continue to
build on this success. More information can be found in the CSR
section of this report.
Black Economic Empowerment partner
During the year, Bushveld Minerals agreed to support Jaxson 640
(Proprietary) Limited's acquisition of a controlling interest in
the Black Economic Empowerment ("BEE") shareholding in Vametco
Holdings (Proprietary) Limited, ensuring the BEE partner at Vametco
Holdings is a partner of choice aligned with Bushveld Minerals'
vanadium strategy and focus. The Jaxson transaction took place
alongside Bushveld Vametco Limited's acquisition of a 78.8 per cent
interest in Strategic Minerals Corporation.
Bushveld Minerals' post year end events
In March 2018, the Company successfully raised US$22.2 million
(GBP15.7 million) (before expenses) by way of an oversubscribed
ordinary shares placing. The planned use of proceeds of the placing
was: redemption of the outstanding Atlas Capital convertible bond;
simplifying Bushveld's organisational and corporate structure; and
supporting Bushveld's vanadium expansion programme.
In September 2017 the Company agreed to issue up to GBP8 million
of unsecured convertible bonds to the UK based fund Atlas Capital
Markets Limited, and its New York based joint venture company,
Atlas Special Opportunities Limited. The convertible bonds were
issued into two tranches of GBP4,500,000 issued in September 2017
and GBP3,500,000 issued in December 2017. In June 2018, the
Company, fully redeemed the outstanding Atlas convertible
bonds.
Following the demerger of Greenhills Resources Limited, Bushveld
Minerals retained a 17.48 per cent shareholding in AIM-listed
AfriTin Mining Limited from the 17(th) of November 2017. Post year
end, on 20 June 2018, AfriTin successfully completed a private
placement of new shares, with the result that Bushveld Minerals
interest was diluted from 17.48 percent to 10.04 percent. Since
Bushveld Minerals does not exercise significant influence over
AfriTin, the investment has since been accounted for as a financial
asset available for sale.
Outlook
Having completed the transformational acquisition of Vametco, we
look forward to the year ahead with added confidence as we continue
to diligently execute the strategy that we have articulated across
all of our platforms. The transformation to a producer with healthy
cash flows, while very satisfying, is only a step in our journey to
build one of the most significant lowest cost vertically integrated
vanadium companies in the world. There is much work ahead and I am
very confident that we have the right asset base, the right
strategy and the best team to deliver it.
I would like to take this opportunity to thank everyone that has
played a crucial role during a year that has been as challenging as
it has been rewarding. This includes the outstanding management
team for its diligence, the Board of Directors for its continual
support and counsel, the local communities in the areas in which we
operate for their partnership which we treasure and our advisers
for their expert guidance. I look forward with anticipation to
reporting this time next year on our continuing progress.
The story of Bushveld Minerals is not yet half told.
Fortune Mojapelo
Chief Executive Officer
Retrospective Compensation Scheme
In June 2016, the Board of Bushveld Minerals formulated a policy
to compensate directors and key employees ("Eligible Recipients")
for historic sub-market salary shortfalls and bonuses that had
accrued since the inception of the Company. As Bushveld Minerals
was in the early stages of its growth cycle and cash was heavily
constrained, it was proposed that Eligible Recipients would be
given the choice either to receive retrospective compensation via a
one-off lump sum cash payment or through proposed share awards. The
Board subsequently extended the proposal to compensate certain
advisors in lieu of cash consultancy fees to protect the Company's
cash balances during its growth phase.
A number of Eligible Recipients chose to receive shares, thereby
aligning their interests with those of the shareholders of the
Company, easing pressure on Bushveld's cash flow and contributing
to the growth of the Company.
Since the formulation of the policy, the Company has often been
in possession of inside information and so been unable to
compensate the Eligible Recipients with share equity in Bushveld
Minerals as intended. In the Company's AIM admission document
published on 30 November 2017, the Company indicated its intention
to issue up to 24,847,310 new ordinary shares to Eligible
Recipients, on the recommendation of its then constituted
remuneration committee. The total value of the proposed share award
on 29 November 2017, (based on the closing mid-market price of
ordinary shares on the last Business Day before the publication of
the Admission Document) was c.GBP2.0 million.
The Company had intended to use part of the authority granted by
shareholders on 20 December 2017 to issue ordinary shares to
Eligible Recipients however it has not been able to do so. Given
that none of the ordinary shares referenced above have been issued
since the 2016 award, the cost of servicing the scheme has
increased significantly following the material increase in the
Company's share price in recent months. Nevertheless, it is to be
noted that while the cost of servicing these share allocations has
increased by approximately 10 times, the market capitalization of
the company has increased by approximately 16 times from the 2016
period.
In this context the Remuneration Committee has made
recommendations and the Board has approved the following
retrospective compensation awards:
-- A total of ZAR 4,332,584 (GBP 241,000) was paid in once off
bonuses as Retrospective Employee Compensation;
-- A total of 2,741,310 ordinary shares should be awarded to
employees who opted to receive shares in lieu of cash bonus
payments; and
-- A total of 1,541,000 ordinary shares should be awarded to
advisors and consultants as part of the compensation agreed in lieu
of professional and advisory fees.
The Company also proposes issuing restricted ordinary share
awards to settle historic compensation shortfalls for Executive
Directors, Non-Executive Directors and a director of Bushveld
Vametco, which are subject to shareholder approval, as follows
(Fortune Mojapelo - 7,000,000 Ordinary Shares; Anthony Viljoen -
7,000,000 Ordinary Shares, Bill Chipane, Director of Bushveld
Vametco - 2,500,000 Ordinary Shares; Ian Watson, Non-Executive
Chairman - 3,015,000 Ordinary Shares, Jeremy Friedlander,
Non-Executive Director - 1,050,000 Ordinary Shares).
Fortune Mojapelo, Anthony Viljoen, Ian Watson, Jeremy
Friedlander as directors of the Company and Bill Chipane as a
director of Bushveld Vametco are each regarded as a related party
as defined by the AIM Rules for Companies. The conditional issue of
shares to these parties is therefore deemed to be a related party
transaction for the purposes of the AIM Rules. Michael Kirkwood and
Geoff Sproule, being the independent directors, consider, having
consulted the Company's Nominated Adviser, SP Angel Corporate
Finance LLP, that the terms of the related party transaction are
fair and reasonable insofar as the shareholders of the Company are
concerned.
Shareholders should note that the retrospective compensation and
share awards referenced above are in full and final settlement of
all compensation shortfalls for prior years, including the current
reporting period. They are also subject to a minimum restricted
hold period of 12 months except for limited circumstances including
meeting any tax liabilities resulting from the share award.
The aggregate share awards relating to retrospective
compensation represent approximately 2.5% dilution of existing
shareholder interests
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF BUSHVELD MINERALS
LIMITED
Opinion
We have audited the financial statements of Bushveld Mineral's
Limited and its subsidiaries (the 'group') for the period ended 31
December 2017 which comprise of the Consolidated Income Statement,
Consolidated Statement of Comprehensive Income, Consolidated
Statement of Financial Position, Consolidated Statement of Changes
in Equity, Consolidated Statement of Cash Flows and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
-- give a true and fair view of the state of the group's affairs
as at 31 December 2017 and of the group's loss for the period then
ended;
-- are in accordance with IFRSs as adopted by the European Union; and
-- comply with the requirements of The Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the group's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these
matters.
Acquisition of controlling interest in Bushveld Vametco
Limited
Accounting for the acquisition of Bushveld Vametco Limited
requires management to make significant judgements on the fair
value of consideration and the fair value of assets and liabilities
acquired. The acquisition also resulted in a significant increase
in the reported amounts of assets and liabilities in the Statement
of Financial Position. As a result, the acquisition of Bushveld
Vametco Limited was determined to be a key audit matter.
Our work included:
-- Consideration of the completeness of assets and liabilities identified on acquisition
-- Audit of management's judgements of the fair values of
assets, liabilities and contingent liabilities acquired, including
consultation with valuation experts
-- Audit of the fair value of the consideration for the
acquisition, both current and deferred elements, and that all
transaction costs are appropriately treated
-- Audit of the disclosures included in the financial statements with reference to IFRS 3
-- Review of the work of component auditors in accordance with ISA (UK) 600
The related disclosures are included in note 32 in the financial
statements.
Demerger of Greenhills Resources Limited
The demerger of Greenhills Resources Limited was a complex
transaction and as a result was determined to be a key audit
matter.
Our audit work included:
-- Audit of the accounting treatment of the transaction,
including recalculation of the figures reported in the income
statement and within equity and challenged the inputs and
methodology, including management's assumptions
-- Audit of the classification and valuation of the remaining
interest in AfriTin shares and checked compliance with accounting
and disclosure requirements
-- Audit of the disclosures included in the financial statements
The related disclosures are included in note 12 in the financial
statements.
Our application of materiality
When establishing our overall audit strategy, we set certain
thresholds which help us to determine the nature, timing and extent
of our audit procedures and to evaluate the effects of
misstatements, both individually and on the financial statements as
a whole. We determined a magnitude of uncorrected misstatements
that we judge would be material for the financial statements as a
whole (FSM), which was calculated at GBP1,300,000. We agreed with
the Audit Committee that we would report to them all unadjusted
differences in excess of GBP50,000, as well as differences below
those thresholds that, in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The audit was scoped to ensure that we obtained sufficient and
appropriate audit evidence in respect of:
-- the significant business operations of the group
-- other operations which, irrespective of size, are perceived
as carrying a significant level of audit risk whether through
susceptibility to fraud, or for other reasons
-- the appropriateness of the going concern assumption used in
the preparation of the financial statements
The audit was scoped to support our audit opinion on group
financial statements of Bushveld Minerals Limited and was based on
group materiality and an assessment of risk at group level.
Where components of the group were considered significant, we
reviewed component auditor's work in accordance with ISA (UK) 600.
The Bushveld Vametco Holdings Proprietary Limited group was a
significant component and we visited the offices of the component
auditor in South Africa to review the audit working papers and
discuss the audit issues with the component audit team.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where The Companies (Guernsey) Law 2008 requires us to report to
you if, in our opinion:
-- proper accounting records have not been kept by the parent company; or
-- the parent company financial statements are not in agreement
with the accounting records; or
-- we have failed to obtain all the information and explanations
which, to the best of our knowledge and belief, are necessary for
the purposes of our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement set out on page 51, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs (UK), we exercise
professional judgment and maintain
professional scepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the group's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the directors.
-- Conclude on the appropriateness of the directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the group's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or
conditions may cause the group to cease to continue as a going
concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
-- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, including the FRC's Ethical Standard, and communicate
with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or
regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with section 262 of The Companies (Guernsey) Law
2008. Our audit work has been undertaken so that we might state to
the company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
RSM UK AUDIT LLP, Auditor
Chartered Accountants
25 Farringdon Street
London, EC4A 4AB
28 June 2018
Consolidated Income Statement
For the ten months ended 31 December 2017
10 Months 12 Months
ended ended
31 December 28 February
2017 2017
Note GBP GBP
Continuing operations
Revenue 5 2,210,430 -
Cost of sales (1,093,443) -
Gross profit 1,116,987 -
Other operating income - 31,445
Selling and distribution
costs (220,724) -
Other mine operating costs (122,707) -
Idle plant costs (24,216) -
Administration expenses (3,740,558) (1,550,087)
Operating loss (2,991,218) (1,518,642)
Share of results of associate 32 3,610,066 -
Impairment loss on demerger
of tin assets 12 (547,441) -
Finance income 8 107,045 1,093
Finance costs 9 (863,035) (202,518)
Loss before tax (684,583) (1,720,067)
Taxation 10 (8,144) -
Loss after taxation (692,727) (1,720,067)
Attributable to:
Owners of the parent (953,538) (1,705,920)
Non-controlling interests 260,811 (14,147)
(692,727) (1,720,067)
Loss per ordinary share
attributable to owners of
parent
Basic and diluted loss per
share (in pence) 11 (0.12) (0.28)
All results relate to continuing activities.
The notes on pages 68 to 104 form part of these financial
statements.
Consolidated Statement of Comprehensive Income
For the ten months ended 31 December 2017
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Loss for the year (692,727) (1,720,067)
Other comprehensive income,
net of tax:
Items that may be subsequently
reclassified to profit or
loss:
Currency translation differences 1,354,597 2,887,415
Available-for-sale financial
assets - net change in fair
value 19 (779,930) -
Total comprehensive income
for the year (118,060) 1,167,348
================= =================
Attributable to:
Owners of the parent (327,272) 783,430
Non-controlling interests 209,212 383,918
Total comprehensive income
for the year (118,060) 1,167,348
================= =================
Consolidated Statement of Financial Position
As at 31 December 2017
Company number: 54506
31 December 28 February
2017 2017
Note GBP GBP
Assets
Non-current assets
Intangible assets: exploration
and evaluation 12 45,110,207 60,201,729
Property, plant and equipment 13 32,922,605 304,910
Investment properties 14 2,448,489 -
Deferred tax asset 15 2,427,455 -
Total Non-Current assets 82,908,756 60,506,639
Current assets
Inventories 16 12,727,444 -
Trade and other receivables 17 10,286,266 2,507,027
Restricted investment 18 3,844,454 -
Income tax receivable 862,162 -
Available-for-sale financial
assets 19 1,224,626 -
Cash and cash equivalents 20 7,218,820 131,155
Total Current assets 36,163,772 2,638,182
Total assets 119,072,528 63,144,821
=========== ===========
Equity and liabilities
Share capital 25 8,758,948 6,962,141
Share premium 25 51,306,449 60,923,922
Accumulated deficit (9,725,332) (8,771,794)
Warrant reserve 1,566,755 594,127
Foreign exchange translation
reserve 1,394,589 (11,607)
Fair value reserve (779,930) -
----------- -----------
Equity attributable to
owners of the parent 52,521,479 59,696,789
Non-controlling interests 26,969,295 2,032,925
Total Equity 79,490,774 61,729,714
Non-Current liabilities
Borrowings 21 5,815,092 -
Other financial liabilities 21 1,012,490 -
Post-retirement medical
liability 23 2,063,042 -
Environmental rehabilitation
liability 24 4,943,249 -
Deferred consideration 8,167,393 -
Total Non-Current liabilities 22,001,266 -
Current liabilities
Borrowings 21 - 128,767
Trade and other payables 22 15,007,199 1,286,340
Provisions 26 2,573,289 -
Total Current liabilities 17,580,488 1,415,107
Total Equity and liabilities 119,072,528 63,144,821
=========== ===========
The notes on pages 68 to 104 form part of these financial
statements.
The financial statements were authorised and approved for issue
by the Board of directors and authorised for issue on 28 June
2018.
G N SPROULE
Director 28 June 2018
Consolidated Statement of Changes in Equity
For the ten months ended 31 December 2017
Attributable to owners of the parent company
Foreign
exchange Non-
Share Share Accumulated Warrant translation Fair value controlling Total
capital premium deficit reserve reserve reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity at
29 February
2016 4,863,373 59,927,541 (7,320,313) 422,386 (2,500,957) - 55,392,030 1,349,513 56,741,543
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Loss for the
year - - (1,705,920) - - - (1,705,920) (14,147) (1,720,067)
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - 2,489,350 - 2,489,350 398,065 2,887,415
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Total
comprehensive
loss for the
year - - (1,705,920) - 2,489,350 - 783,430 383,918 1,167,348
Transactions
with
owners:
Grant of
warrants - - - 426,180 - - 426,180 - 426,180
Reserve transfer - - 254,439 (254,439) - - - - -
Issue of shares 2,098,768 996,381 - - - - 3,095,149 - 3,095,149
Non-controlling
interest - - - - - - - 299,494 299,494
Total equity at
28 February
2017 6,962,141 60,923,922 (8,771,794) 594,127 (11,607) - 59,696,789 2,032,925 61,729,714
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
(Loss)/profit
for
the period - - (953,538) - - - (953,538) 260,811 (692,727)
Other
comprehensive
income, net of
tax:
Fair value
movement
on investments - - - - - (779,930) (779,930) - (779,930)
Currency
translation
differences - - - - 1,406,196 - 1,406,196 (51,599) 1,354,597
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Total
comprehensive
income for the
period - - (953,538) - 1,406,196 (779,930) (327,272) 209,212 (118,060)
Transactions
with
owners:
Grant of
warrants - - - 972,628 - - 972,628 - 972,628
Exercise of
warrants 708,581 982,430 - - - - 1,691,011 - 1,691,011
Issue of shares 1,088,226 5,548,097 - - - - 6,636,323 - 6,636,323
Distribution of
capital on
de-merger - (16,148,000) - - - - (16,148,000) - (16,148,000)
Non-controlling
interest - - - - - - - 24,727,158 24,727,158
Total equity at
31 December
2017 8,758,948 51,306,449 (9,725,332) 1,566,755 1,394,589 (779,930) 52,521,479 26,969,295 79,490,774
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Consolidated Statement of Cash Flows
For the ten months ended 31 December 2017
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Note
Cash flows from operating
activities
Loss before taxation (692,727) (1,720,067)
Adjustments for:
Depreciation property, plant
and equipment 13 50,369 9,892
Impairment of property, plant
and equipment 13 - 138,708
Impairment loss on de-merger 12 547,472 -
Finance income 8 (107,045) (1,093)
Finance costs 9 863,035 202,518
Share of profit in associate (3,610,066) -
Changes in working capital (1,144,094) 1,414,304
Net cash (used in) / generated
from operating activities (4,093,056) 44,262
------------ ------------
Cash flows from investing
activities
Finance income 8 107,045 1,093
Purchase of exploration and
evaluation assets 12 (1,261,590) (821,937)
Purchase of property, plant
and equipment - (25,996)
Net cash impact of acquisition
of Bushveld Vametco Limited 32 4,412,912 -
Net cash generated from /
(used in) investing activities 3,258,367 (846,840)
------------ ------------
Cash flows from financing
activities
Finance costs - (528,400)
Net proceeds from issue of
shares and warrants 25 1,691,011 3,200,381
Proceeds from convertible
bond issue (net of repayments) 21 6,545,000 -
Net repayments of other borrowings 21 (128,767) (2,535,000)
Net cash generated from financing
activities 8,107,244 136,981
------------ ------------
Net increase / (decrease)
in cash and cash equivalents 7,272,555 (665,597)
Cash and cash equivalents
at the beginning of the year 131,155 478,619
Effect of foreign exchange
rates (184,890) 318,133
Cash and cash equivalents
at end of the year 7,218,820 131,155
============ ============
The notes on pages 68 to 104 form part of these 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 company changed its reporting date from 28 February to 31
December during the period. These financial statements are for the
ten months ended 31 December 2017 and the comparative figures are
for the year ended 28 February 2017.
The Bushveld Group comprises Bushveld Minerals Limited and its
subsidiaries as noted below.
During the year the Company acquired an effective 59.1% in
Vametco Holdings (Pty) Limited, an operational vanadium mining
company owned through the Company's 78.8% interest in Strategic
Minerals Corporation. Vametco Holdings Limited own a processing
plant and an operating open cast vanadium mine, situated about 6.5
km northeast of the town of Madibeng (formerly known as Brits)
which is in the Bojanala Platinum District in the North West
Province of the Republic of South Africa. Vametco Holdings Limited
has approximately 480 employees.
Bushveld Resources Limited ("BRL") is an investment holding
company formed to invest in resource-based vanadium and iron ore
exploration companies in South Africa. The South African
subsidiaries are Pamish Investments No. 39 (Proprietary) Limited
("Pamish 39") in which BRL holds a 64% equity interest, Amaraka
Investments No. 85 (Proprietary) Limited ("Amaraka 85") in which
BRL holds 68.5% equity interest and Frontier Platinum Resources
(Proprietary) Limited in which BRL holds 100% equity interest. The
minority shareholder in Pamish 39 is Izingwe Capital (Proprietary)
Limited and the minority shareholder in Amaraka 85 is Afro Multi
Minerals (Proprietary) Limited.
The Lemur subsidiaries are coal project development companies.
The Lemur subsidiaries are the holder of 11 concession blocks in
South West Madagascar covering the Imaloto Coal Basin, known as the
Imaloto Coal Project and Extension.
As at 31 December 2017, the Bushveld Group comprised of:
Company Equity holding Country Nature of
and voting of incorporation activities
rights
Bushveld Minerals N/A Guernsey Ultimate holding
Ltd company
Bushveld Resources 100% Guernsey Holding company
Ltd(1)
Pamish Investments 64% South Africa Vanadium &
39 (Pty) Ltd(2) Iron ore exploration
Amaraka Investments 68.50% South Africa Vanadium &
85 (Pty) Ltd(2) Iron ore exploration
Frontier Platinum 100% South Africa Group support
(Pty) Ltd(2) services
Bushveld Energy 84% Mauritius Holding company
Ltd(1)
Bushveld Energy 100% South Africa Energy Development
(Pty) Ltd(6)
Bushveld Vametco 100% Guernsey Holding company
Limited(1)
Strategic Minerals 78.8% United Investment
Corporation(9) States Holding company
Vametco Holdings 74% South Africa Holding company
(Pty) Ltd(10)
Vametco Alloys 100% South Africa Mining and
(Pty) Ltd(11) manufacturing
company
Vametco Properties 100% South Africa Property owning
(Pty) Ltd(12) company
Lemur Holdings 100% Mauritius Holding company
Ltd(1)
Lemur Investments 100% Mauritius Holding company
Ltd(5)
Coal Mining Madagascar 99% Madagascar Coal exploration
SARL(7)
Imaloto Power Ltd(5) 100% Mauritius Holding company
Imaloto Power Project 99% Mauritius Power generation
Company company
SARL(8)
1 Held directly by Bushveld Minerals Limited
2 Held by Bushveld Resources Limited
3 Held by Greenhills Resources Limited
4 Held by Mokopane Tin Company (Pty) Limited
5 Held by Lemur Holdings Limited
6 Held by Bushveld Energy Limited
7 Held by Lemur Investments Ltd
8 Held by Imaloto Power Ltd
9 Held by Bushveld Vametco Ltd
10 Held by Strategic Minerals Corporation
11 Held by Vametco Holdings (Pty) Ltd
12 Held by Vametco Alloys (Pty) Ltd
These financial statements are presented in Pound Sterling (GBP)
because that is the currency the Group has raised funding on the
AIM market in the United Kingdom.
2 Adoption of new and revised standards
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:
Amendments to 1 January Amendments to provide requirements
IFRS 2: Classification 2018 on the accounting for the
and Measurement effects of vesting and
of Share-based non-vesting conditions
Payment Transactions* on the measurement of cash-settled
share-based payments, share-based
payment transactions with
a net settlement feature
for withholding tax obligations,
and a modification to the
terms and conditions of
a share-based payment that
changes the classification
of the transaction from
cash-settled to equity-settled.
--------------------------- --------- --------------------------------------
IFRIC 22 Foreign 1 January Provides requirements about
Currency Transactions 2018 which exchange rate to
and Advance Consideration* use in reporting foreign
currency transactions (such
as revenue transactions)
when payment is made or
received in advance.
--------------------------- --------- --------------------------------------
IFRS 9 Financial 1 January Replacement to IAS 39 and
Instruments 2018 is built on a logical,
single classification and
measurement approach for
financial assets which
reflects both the business
model in which they are
operated and their cash
flow characteristics. Also
addresses the so--called
'own credit' issue and
includes an improved hedge
accounting model to better
link the economics of risk
management with its accounting
treatment. It is a change
from incurred to expected
loss model.
--------------------------- --------- --------------------------------------
IFRS 15 Revenue 1 January Introduces requirements
from Contracts 2018 for companies to recognise
with Customers revenue to depict the transfer
(IFRS 15 clarifications of goods or services to
not EU-endorsed) customers in amounts that
reflect the consideration
to which the company expects
to be entitled in exchange
for those goods or services.
Also results in enhanced
disclosure about revenue
and provides or improves
guidance for transactions
that were not previously
addressed comprehensively
and for multiple--element
arrangements.
--------------------------- --------- --------------------------------------
IFRS 16 Leases* 1 January The new standard recognises
2019 a leased asset and a lease
liability for almost all
leases and requires them
to be accounted for in
a consistent manner. This
introduces a single lessee
accounting model and eliminates
the previous distinction
between an operating lease
and a finance lease.
--------------------------- --------- --------------------------------------
IFRS 17 Insurance 1 January The new standard requires
Contracts 2019 insurance liabilities to
be measured at a current
fulfillment value and provides
a more uniform measurement
and presentation approach
for all insurance contracts.
These requirements are
designed to achieve the
goal of a consistent, principle-based
accounting for insurance
contracts.
--------------------------- --------- --------------------------------------
IFRIC 23 Uncertainty 1 January The interpretation addresses
over 2019 the determination of taxable
Income Tax Treatments profit (tax loss), tax
bases, unused tax losses,
unused tax credits and
tax rates, when there is
uncertainty over income
tax treatments under IAS
12.
--------------------------- --------- --------------------------------------
*not yet endorsed by the EU
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the financial statements of the Group, subject to any future
business combinations.
3. Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards Board ("IASB") as
adopted by the European Union ("EU adopted IFRS").
The consolidated financial statements have been prepared under
the historical cost basis, except for the revaluation of certain
financial instruments. 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
The directors have considered the current financial position of
the group and the likely future cash flows for the period of 12
months following the approval of these financial statements for the
10 months to 31 December 2017.
A capital raising was undertaken in March 2018 realising a net
amount GBP15,108,742. The proceeds have been utilised to redeem the
convertible bonds raised in September and December 2017.
The funding will also be utilised to develop the groups assets
and for working capital requirements. Further cash flows will be
available in due course from the operating subsidiary in the
group.
The directors have considered the current financial position of
the group and the likely future cash flows for the period of 12
months following the approval of these financial statements in
preparing these financial statements. The directors consider that
the company has sufficient funds for the next twelve months.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities)
over which the group has control. The group controls an entity when
the group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the
group. They are deconsolidated from the date that control
ceases.
The group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of acquiree's identifiable net
assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the
acquisition date carrying value of the acquirer's previously held
equity interest in the acquiree is re-measured to fair value at the
acquisition date; any gains or losses arising from such
re-measurement are recognised in profit or loss.
3 Significant accounting policies (continued)
Any contingent consideration to be transferred by the group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability is recognised in accordance with
IAS 39 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not re-measured, and its subsequent settlement is
accounted for within equity.
Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated. When necessary amounts reported by
subsidiaries have been adjusted to conform to the group's
accounting policies.
Disposal of subsidiaries
When the group ceases to have control any retained interest in
the entity is re-measured to its fair value at the date when
control is lost, with the change in carrying amount recognised in
profit or loss. The fair value is the initial carrying amount for
the purposes of subsequently accounting for the retained interest
as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Non-controlling interests
Non-controlling interests in subsidiaries are identified
separately from the group's equity therein. Those interests of
non-controlling shareholders that present ownership interests
entitling their holders to a proportionate share of the net assets
upon liquidation are initially measured at fair value. Subsequent
to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the
non-controlling interests' share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests
having a deficit balance.
Black Economic Empowerment ("BEE") interests are accounted for
as non-controlling interests on the basis that the group does not
control these entities.
Associates
Associates are all entities over which the group has significant
influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. Investments in associates
are accounted for using the equity method of accounting. Under the
equity method, the investment is initially recognised at cost, and
the carrying amount is increased or decreased to recognise the
investor's share of the profit or loss of the investee after the
date of acquisition. The group's investment in associates includes
goodwill identified on acquisition.
If the ownership interest in an associate is reduced but
significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is
reclassified to profit or loss where appropriate.
The group's share of post-acquisition profit or loss is
recognised in the income statement, and its share of
post-acquisition movements in other comprehensive income is
recognised in other comprehensive income with a corresponding
adjustment to the carrying amount of the investment. When the
group's share of losses in an associate equals or exceeds its
interest in the associate, including any other unsecured
receivables, the group does not recognise further losses, unless it
has incurred legal or constructive obligations or made payments on
behalf of the associate.
The group determines at each reporting date whether there is any
objective evidence that the investment in the associate is
impaired. If this is the case, the group calculates the amount of
impairment as the difference between the recoverable amount of the
associate and its carrying value and recognises the amount adjacent
to share of profit/(loss) of associates in the income
statement.
Profits and losses resulting from upstream and downstream
transactions between the group and its associate are recognised in
the group's financial statements only to the extent of unrelated
investor's interests in the associates.
Unrealised losses are eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting
policies of associates have been changed where necessary to ensure
consistency with the policies adopted by the group.
Dilution gains and losses arising in investments in associates
are recognised in the income statement.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the board of directors that makes
strategic decisions.
Foreign currencies
Functional and presentational currency
The individual financial statements of each group company are
prepared in the currency of the primary economic environment in
which they operate (its functional currency). For the purpose of
the consolidated financial statements, the results and financial
position of each group company are expressed in Pound Sterling,
which is the functional currency of the Company, and the
presentation currency for the consolidated financial
statements.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are re-measured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies
are recognised in the income statement.
Group companies
The results and financial position of all the group entities
(none of which has the currency of a hyper-inflationary economy)
that have a functional currency different from the presentation
currency are translated into the presentation currency as
follows:
a) assets and liabilities for each statement of financial
position presented are translated at the closing rate;
b) income and expenses for each income statement are translated
at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
c) all resulting exchange differences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate. Exchange
differences arising are recognised in other comprehensive
income.
Revenue recognition
Sale of goods/products
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
provided in the normal course of business, net of discounts,
rebates and value added tax. Revenue from the sale of products is
recognised when the significant risks and rewards of ownership of
the product have transferred to the buyer, costs can be measured
reliably, and receipt of the future economic benefits is probable.
Significant risks and rewards of ownership pass when the title has
passed to the customer and the goods have been delivered to a
contractually agreed location.
Finance income
Interest revenue is recognised when it is probable that economic
benefits will flow to the group and the amount of revenue can be
measured reliably. Interest revenue is accrued on a time basis, by
reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the
financial asset to that asset's net carrying amount on initial
recognition.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax charge is based on taxable profit for the year. The
group's liability for current tax is calculated by using tax rates
that have been enacted or substantively enacted by the reporting
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
"balance sheet liability" method.
Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to
apply to the year when the asset is realised or the liability is
settled based upon rates enacted and substantively enacted at the
reporting date. Deferred tax is charged or credited to profit or
loss, except when it relates to items credited or charged to other
comprehensive income, in which case the deferred tax is also dealt
with in other comprehensive income.
Intangible exploration and evaluation assets
All costs associated with mineral exploration and evaluation
including the costs of acquiring prospecting licences; mineral
production licences and annual licences fees; rights to explore;
topographical, geological, geochemical and geophysical studies;
exploratory drilling; trenching, sampling and activities to
evaluate the technical feasibility and commercial viability of
extracting a mineral resource; are capitalised as intangible
exploration and evaluation assets and subsequently measured at
cost.
If an exploration project is successful, the related
expenditures will be transferred at cost to property, plant and
equipment and amortised over the estimated life of the commercial
ore reserves on a unit of production basis (with this charge being
taken through profit or loss). Where a project does not lead to the
discovery of commercially viable quantities of mineral resources
and is relinquished, abandoned, or is considered to be of no
further commercial value to the group, the related costs are
recognised in profit or loss.
The recoverability of deferred exploration costs is dependent
upon the discovery of economically viable ore reserves, the ability
of the group to obtain necessary financing to complete the
development of ore reserves and future profitable production or
proceeds from the extraction or disposal thereof.
Impairment of exploration and evaluation assets
Whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, the asset is
reviewed for impairment. Assets are also reviewed for impairment at
each reporting date in accordance with IFRS 6. An asset's carrying
value is written down to its estimated recoverable amount (being
the higher of the fair value less costs to sell and value in use)
if that is less than the asset's carrying value. Impairment losses
are recognised in profit or loss.
An impairment review is undertaken when indicators of impairment
arise but typically when one of the following circumstances
applies:
-- unexpected geological occurrences that render the resources uneconomic; or
-- title to the asset is compromised; or
-- variations in mineral prices that render the project uneconomic; or
-- variations in the foreign currency rates; or
-- the group determines that it no longer wishes to continue to evaluate or develop the field.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation, except for Residential properties which
is carried at fair value. Depreciation is calculated on the
straight line method to write off the cost of each asset (less
residual value) over its estimated useful life as follows:
Buildings and other improvements 20-25 years
Plant and machinery 15-20 years
Motor vehicles, furniture and equipment 4-10 years
Decommissioning asset Life of mine
Investment property
Investment property is initially measured at cost and
subsequently at fair value with any change therein recognised in
profit or loss.
Any gain or loss on disposal of investment property (calculated
as the difference between the net proceeds from disposal and the
carrying amount of the item) is recognised in profit or loss.
Repairs and maintenance is generally charged against income
during the financial period in which it is incurred. However
renovations are capitalised and included in the carrying amount of
the asset when it is probable that future economic benefits will
flow to the group. Major renovations are depreciated over the
remaining useful life of the related asset.
An item of property, plant and equipment is derecognised upon
disposal or when no future benefits are expected from its use or
disposal. Any gain or loss arising from de-recognition of the asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the income
statement in the year the asset is derecognised.
Impairment of property, plant and equipment
At each statement of financial position date, the group reviews
the carrying amounts of its tangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Where there has been a change in economic conditions that
indicate a possible impairment in a cash-generating unit, the
recoverability of the net book value relating to that field is
assessed by comparison with the estimated discounted future cash
flows based on management's expectations of future oil prices and
future costs.
The recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
Where conditions giving rise to impairment subsequently reverse,
the effect of the impairment charge is also reversed as a credit to
the income statement, net of any depreciation that would have been
charged since the impairment.
Inventories
Inventories are valued at the lower of cost or estimated net
realisable value. Cost is determined on the following basis:
Raw materials weighted average cost
Consumable stores weighted average cost
Work in progress weighted average cost
Finished product weighted average cost
The cost of finished product and work in progress comprises of
raw materials, direct labour, other direct costs, and related
production overheads (based on normal operating capacity) but
excludes borrowing costs.
Net realisable value is the estimated selling price in the
ordinary course of business, less costs of completion and selling
expenses.
Financial assets and liabilities
Financial assets and financial liabilities are recognised in the
group's statement of financial position when the group becomes a
party to the contractual provisions of the instrument. Financial
instruments are classified into specified categories dependent upon
the nature and purpose of the instruments at the time of initial
recognition. All financial assets are recognised as loans and
receivables or available for sale investments and all financial
liabilities are recognised as other financial liabilities.
Trade and other receivables
Trade and other receivables are stated initially recognised at
the fair value of the consideration receivable less any impairment.
Impairment provisions are recognised when there is objective
evidence that the group will be unable to collect all of the
amounts due under the terms of the receivable, the amount of such a
provision being the difference
between the carrying amount and the present value of the future
expected cash flows associated with the impaired receivable.
Trade and other receivables are subsequently measured at
amortised cost, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on
a term of not greater than three months.
Trade and other payables
Trade and other payables are initially recognised at fair value.
They are subsequently measured at amortised cost using the
effective interest rate method.
Available for sale financial assets
Listed shares held by the group that are traded in an active
market are classified as being available for sale and are stated at
fair value. The fair value of such investments is determined by
reference to quoted market prices.
Gains and losses arising from changes in fair value are
recognised in other comprehensive income and accumulated in the
fair value reserve with the exception of impairment losses. Where
the investment is disposed of or is determined to be impaired, the
cumulative gain or loss previously recognised in the investments
revaluation reserve is reclassified to profit or loss.
Dividends on available for sale equity instruments are
recognised in profit or loss when the group's right to receive the
dividends is established.
Financial liabilities and equity
Financial liabilities (including loans and advances due to
related parties) and equity instruments are classified according to
the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual
interest in the assets of the group after deducting all of its
liabilities. When the terms of a financial liability are negotiated
with the creditor and settlement occurs through the issue of the
Company's equity instruments, the equity instruments are measured
at fair value and treated as consideration for the extinguishment
of the liability. Any difference between the carrying amount of the
liability and the fair value of the equity instruments issued is
recognised in profit or loss.
Convertible loans
Interest-bearing loans are recorded initially at their fair
value, net of direct transaction costs. Such instruments are
subsequently carried at their amortised cost and finance charges,
including premiums payable on settlement, redemption or conversion,
are recognised in profit or loss over the term of the instrument
using the effective rate of interest.
Instruments where the holder has the option to redeem for cash
or convert into a pre-determined quantity of equity shares are
classified as compound instruments and presented partly as a
liability and partly as equity.
Instruments where the holder has the option to redeem for cash
or convert into a variable quantity of equity shares are classified
separately as a loan and a derivative liability.
Where conversion results in a fixed number of equity shares, the
fair value of the liability component at the date of issue is
estimated using the prevailing market interest rate for a similar
non-convertible instrument. The difference between the proceeds of
issue and the fair value assigned to the liability component,
representing the embedded option to convert the liability into
equity of the group, is included in equity. Where conversion is
likely to result in a variable quantity of equity shares the
related derivative liability is valued and included in
liabilities.
The interest expense on the liability component is calculated by
applying the prevailing market interest rate for similar
nonconvertible debt to the instrument. The difference between this
amount and the interest paid is added to the carrying value of the
convertible loan note.
Derivative liabilities are revalued at fair value at the
reporting date, and changes in the valuation amounts are credited
or charged to the profit or loss.
Warrants
The warrants issued by the company are recorded at fair value on
initial recognition net of transaction costs. The fair value of
warrants granted is recognised as an expense or as share issue
costs, with a corresponding increase in equity. The fair value of
the warrants granted is measured using the Black Scholes valuation
model for options without market conditions and using the binomial
method for those with market conditions, taking into account the
terms and conditions under which the options were granted. The
amount recognised as an expense is adjusted to reflect the actual
number of warrants that vest.
Leases
The determination of whether an arrangement is, or contains a
lease is based on the substance of the arrangement at inception
date and whether the fulfilment of the arrangement is dependent on
the use of a specific asset or assets or the arrangement conveys a
right to use the asset.
Provisions
General
Provisions are recognised when the group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where the
group expects some or all of a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is
presented in the statement or comprehensive income, provisions are
discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting
is used the increase in the provision due to the passage of time is
recognised as a finance cost.
i. Environmental rehabilitation liability
The group is exposed to environmental liabilities relating to
its operations. Full provision for the cost of environmental and
other remedial work such as reclamation costs, close down and
restoration costs and pollution control is made based on the
estimated cost as per the Environmental Management Program Report.
Annual increases in the provisions relating to change in the net
present value of the provision and inflationary increases are shown
separately in the statement of comprehensive income as a finance
cost. Changes in estimates of the provision are accounted for in
the year the change in estimate occurs, and is charged to either
the statement of comprehensive income or the decommissioning asset
in property, plant and equipment, depending on the nature of the
liability.
ii. Post-retirement medical liability
The liability in respect of the defined benefit medical plan is
the present value of the defined benefit obligation at the
reporting date together with adjustments for actuarial
gains/losses. Any actuarial gains or losses are accounted for in
other comprehensive income. The defined benefit obligation is
calculated annually by independent actuaries using the projected
unit of credit method.
iii. Provident fund contributions
The group's contributions to the defined contribution plan are
charged to the statement of comprehensive income in the year to
which they relate.
Use of estimates and judgements
In the application of the group's accounting policies, the
directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates. In particular, information about
significant areas of estimation uncertainty considered by
management in preparing the financial statements is described
below:
i. Acquisition accounting
Management's critical estimates and judgements in preparing the
financial statements relate to the fair value of the consideration
payable and net assets acquired on acquisition of the Vametco Group
(see note 32).
ii. Decommissioning and rehabilitation obligations
Estimating the future costs of environmental and rehabilitation
obligations is complex and requires management to make estimates
and judgements as most of the obligations will be fulfilled in the
future and contracts and laws are often not clear regarding what is
required. The resulting provisions (see note 24) are further
influenced by changing technologies, political, environmental,
safety, business and statutory considerations.
iii. Asset lives and residual values
Property, plant and equipment are depreciated over its useful
life taking into account residual values, where appropriate. The
actual lives of the assets and residual values are assessed
annually and may vary depending on a number of factors. In
reassessing asset lives, factors such as technological innovation,
product life cycles and maintenance programmes are taken into
account. Residual value assessments consider issues such as future
market conditions, the remaining life of the asset and projected
disposal values.
iv. Post-retirement employee benefits
Post-retirement medical aid liabilities are provided for certain
existing employees (see note 23). Actuarial valuations are based on
assumptions which include employee turnover, mortality rates, the
discount rate, health care inflation costs and rates of increase in
costs.
v. Surface rights liabilities
The group has provided for surface lease costs that would accrue
to the owners of the land on which the mine is built (see note 26).
The quantum of the amounts due post implementation of the MPRDA and
the granting of the new order mining right to the group is somewhat
uncertain and need to be negotiated with such owners. The group has
conservatively accrued for possible costs in this regard, but the
actual obligation may be materially different when negotiations
with the relevant parties are completed.
vi. Impairment of exploration and evaluation assets
Determining whether an exploration and evaluation asset is
impaired requires an assessment of whether there are any indicators
of impairment, including by reference to specific impairment
indicators prescribed in IFRS 6 - Exploration for and Evaluation of
Mineral Resources. If there is any indication of potential
impairment, an impairment test is required based on value in use of
the asset. The valuation of intangible exploration assets is
dependent upon the discovery of economically recoverable deposits
which, in turn, is dependent on future iron ore and tin prices,
future capital expenditures and environmental and regulatory
restrictions. The directors have concluded that there are no
indications of impairment in respect of the carrying value of
intangible assets at 31 December 2017 based on planned future
development of the projects and current and forecast commodity
prices. See note 12 for details of exploration and evaluation
assets.
4 Segmental reporting
The reporting segments are identified by the directors of the
group (who are considered to be the chief operating decision
makers) by the way that group's operations are organised. As at 31
December 2017 the group operated within three operating segments,
mineral exploration activities for iron ore and vanadium, vanadium
mining and production and coal. Activities take place in South
Africa (iron ore and vanadium) and Madagascar (coal).
Segment revenue and results
The following is an analysis of the group's revenue and results
by reportable segment.
Vanadium Coal Vanadium
and iron exploration mining Total
ore exploration and
production
GBP GBP GBP GBP
Period ended
31 December
2017
Results
Revenue - - 2,210,430 2,210,430
Associated costs (606,369) (488,402) (957,106) (2,051,877)
Segmental profit
/ (loss) (606,369) (488,402) 1,253,324 158,553
================= =================== ================== ==================
In the prior period, the vanadium mining and production segment
was not present, but tin exploration was a reported segment prior
to the de-merger (note 12).
Vanadium Coal Tin exploration
and exploration Total
iron
ore
exploration
GBP GBP GBP GBP
Period ended
28 February
2017
Results
Revenue - - - -
Operating segmental
loss (50,516) (256,932) (239,225) (546,673)
Segmental loss (50,516) (256,932) (239,225) (546,673)
--------------- ------------------- ---------------------- ----------------
The reconciliation of segmental gross loss to the group's loss
before tax is as follows:
10 months 12months
ended ended
31 December 28 February
2017 2017
GBP GBP
Segmental profit / (loss) 158,553 (546,673)
Unallocated costs (3,176,740) (971,969)
Share of results of associate 3,610,066 -
Impairment - de-merger of tin assets (547,472) -
Finance income 107,045 1,093
Finance costs (836,035) (202,518)
Loss before tax (684,583) (1,720,067)
=================== ===================
Other segmental information
Segmental assets and liabilities disclosed in the reports to the
Board of directors, for the purpose of resource allocation and
assessment of segmental performance, consist of the amounts
capitalised as intangible exploration expenditure. All other assets
and liabilities are classified as unallocated.
Vanadium Vanadium
and Iron mining Total
ore exploration and
production
GBP GBP GBP
31 December
2017
Intangible
assets - exploration
and evaluation 45,110,207 - 45,110,207
----------------- ------------ -------------
Total reportable
segmental net
(liabilities)/assets 45,110,207 49,823,089 94,933,296
----------------- ------------ -------------
Unallocated
net liabilities (15,442,522)
Total consolidated
net assets 79,490,774
=============
Vanadium Tin Coal
and exploration exploration Total
Iron
ore
exploration
GBP GBP GBP GBP
28 February
2017
Intangible
assets - exploration
and evaluation 41,933,596 18,268,133 - 60,201,729
Total reportable
segmental net
(liabilities)/assets (78,383) 627,499 (14,144) 534,972
Unallocated
net assets - - - 992,473
Total consolidated
net assets 61,729,174
=============
5. Revenue
10 months ended 12 months ended
31 December 2017 28 February 2017
GBP GBP
Revenue comprises 2,210,430 -
the invoiced amount
of goods to customers,
net of value added
tax - sale of goods
6. Administrative expenses by nature
10 months ended 12 months
31 December ended
2017 28 February
GBP 2017
GBP
The loss for the year has been arrived at after
charging:
Staff costs 999,526 422,634
Commission paid 421,545 114,250
Depreciation of PPE 50,369 9,892
Impairment of investment - 138,708
Professional fees 758,932 216,422
Acquisition expenses 744,000 621,610
Foreign exchange 588,235 -
loss
Other 177,951 26,571
3,740,558 1,550,087
================= ==============
7. Staff costs
Key management personnel have been identified as the Board of
directors. The remuneration of directors is disclosed in the
Remuneration Report on page 58.
Included in staff costs above, are emoluments of GBP91,667
(February 2017: GBP108,333) in respect of the highest paid
Director.
No pension contributions were made on behalf of the Directors
and other staff members.
8. Finance income
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Bank interest 107,045 1,093
============= =============
9. Finance costs
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Interest on convertible 233,610 -
bonds
Other finance costs 629,425 202,518
------------- -------------
863,035 202,518
============= =============
8.
10. Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
10 months ended 12 months ended
31 December 2017 28 February 2017
Factors affecting tax for the period / year: GBP GBP
Loss before taxation (684,583) (1,720,067)
Loss before taxation multiplied by Guernsey corporation tax rate of 0% as - -
explained below
Tax assessed for the year - South Africa 8,114 -
Taxation expense for the period 8,114 -
================== ==================
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.
11. Loss per share
From continuing operations
The calculation of a basic loss per share of 0.12 pence
(February 2017: 0.28 pence loss), is calculated using the loss for
the year attributable to the owners of the company of GBP953,538
(February 2017: GBP1,705,920) and the weighted average number of
shares in issue during the year of 789,578,440 (February 2017:
601,801,830). The dilutive effect of other shares in issue would be
immaterial to the profit per share.
12. Intangible exploration and evaluation assets
Vanadium
and Iron Tin Total
ore GBP GBP
GBP
As at 1 March
2016 38,649,101 17,737,393 56,386,494
Exchange differences 1,633,034 530,740 2,163,774
Additions 1,651,461 - 1,651,461
As at 28 February
2017 41,933,596 18,268,133 60,201,729
---------------------- ----------- ------------- -------------
As at 1 March
2017 41,933,596 18,268,133 60,201,729
Exchange differences 1,915,021 (1,572,661) 342,360
Impairment /
loss on disposal - (16,695,472) (16,695,472)
Additions 1,261,590 - 1,261,590
As at 31 December
2017 45,110,207 - 45,110,207
---------------------- ----------- ------------- -------------
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").
Under the agreements to acquire the licences within Bushveld
Resources, the group is required to fully fund the exploration
activities up to the issue of the corresponding mining licences. As
the non-controlling interest party retains their equity interest,
the funding of their interest is accounted as deemed purchase
consideration and is included in the additions in the year to
exploration activities. A corresponding increase is credited to
non-controlling interest.
Brits Vanadium Project
The Company is in a process to secure regulatory approval in
terms of section 11 of the Mineral and Petroleum Resources
Development Act (MPRDA) for change of control in respect of the
acquired Sable Metals & Mining Ltd's subsidiaries. Following
approval, Bushveld Minerals will commence with activities to
delineate the shallow resource on the Uitvalgrond farm portion.
-- NW 30/5/1/1/2/11069 PR - held through Great Line 1 (Pty) Ltd
-- NW 30/5/1/1/2/11124 PR - held through Great Line 1 (Pty) Ltd
-- GP 30/5/1/1/02/10142 PR - held through Gemsbok Magnetite (Pty) Ltd
Disposal of Tin assets
The principal tin assets of the Bushveld Group as at 28 February
2017, were the Mokopane Tin Project, the Zaaiplaat Tin Tailings
Project, and its interest in the Uis Tin Project in Namibia.
The Directors believe that the tin assets now represent an
attractive stand-alone platform with a strong and dedicated
management team in place to deliver long-term shareholder value.
The Directors also believe that these assets represent a
significant value opportunity that is not being fully exploited
within Bushveld Minerals.
For this reason, the Tin assets were demerged from the group
effective 9 November 2017.
As described in the Company's circular to shareholders dated 2
October 2017 (the "Circular"), the demerger constituted a
sub-division of ordinary shares in the Company into ordinary shares
and redeemable shares representing 85% of the deemed value of
Greenhills Resources Limited ("Greenhills"), with the redeemable
shares being redeemed for such deemed value in return for the
Company transferring 85% of Greenhills to AfriTin Mining Limited
("AfriTin Mining"), and AfriTin Mining issuing Bushveld
Shareholders with new AfriTin Shares.
The company retained an interest in these assets through its
investment in shares (see note 19). A loss of GBP547,000 has been
recognised in the consolidated income statement in respect of the
de-merger .
13. Property, plant and equipment
Buildings and Motor vehicles
other Plant and Furniture
and Decommissioning Assets under
improvements machinery Equipment assets construction Total
GBP GBP GBP GBP GBP GBP
Cost
As at 1 March 2016 - 538,735 - - - 538,735
Additions - 25,996 - - - 25,996
Exchange differences - 186,190 - - - 186,190
At 28 February
2017 - 750,921 - - - 750,921
------- ---------- -------------- --------------- ------------ ----------
Disposals - (301,185) - - - (301,185)
Exchange differences - 182,448 - - - 182,448
Additions due to
acquisition 452,703 30,606,619 21,249 1,116,965 692,541 32,890,077
At 31 December
2017 452,703 31,238,803 21,249 1,116,965 692,541 33,522,261
======= ========== ============== =============== ============ ==========
Depreciation
As 1 March 2016 - 217,529 - - - 217,529
Impairment charge - 138,708 - - - 138,708
Depreciation charge
for the year - 9,892 - - - 9,892
Exchange differences - 79,882 - - - 79,882
At 28 February
2017 - 446,011 - - - 446,011
------- ---------- ------ --------- -------- ----------
Depreciation charge
for the year - 50,369 - - - 50,369
Exchange differences - 103,276 - - - 103,276
At 31 December
2017 - 599,656 - - - 599,656
------- ---------- ------ --------- -------- ----------
Net Book Value - - - - - -
At 31 December
2017 452,703 30,639,147 21,249 1,116,965 692,541 32,922,605
======= ========== ====== ========= ======== ==========
At 28 February
2017 - 304,910 - - - 304,910
======= ========== ====== ========= ======== ==========
14. Investment properties
31 December
2017
GBP
Fair value at -
1 March
Acquisition (note
32) 2,448,489
-------------
Fair value at
end of the year 2,448,489
=============
Land and buildings 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 Mr WJ van Aardt, an
accredited independent valuer, as at 31 December 2017. Mr W J van
Aardt, is a Professional Associated Valuer (South Africa) with
registration number F139714. The fair value represents the amount
at which the assets could be exchanged between a knowledgeable,
willing buyer and a knowledgeable, willing seller in an arms'
length transaction.
The following valuation techniques and key inputs were used in
the valuation of the investment properties:
i. Physical inspection of each property;
ii. Consultation with estate agencies to discuss current sales market trends; and
iii. Comparative sales reports for locations where properties
are situated were obtained from South Africa.
15. Deferred tax
31 December 28 February
2017 2017
GBP GBP
As at 1 March - -
2017
Arising on acquisition 2,427,455 -
(note 32)
As at 31 December 2,427,455 -
2017
============ ============
16. Inventories
31 December 28 February GBP
2017 2017
GBP GBP
Finished goods 4,800,578 -
Work in progress 3,255,013 -
Raw materials 1,198,704 -
Consumable stores 3,473,149 -
------------
Inventories 12,727,444 -
============ =======================
The amount of write-down of inventories due to net realisable
value provision requirement is nil.
17. Trade and other receivables
31 December 28 February
2017 2017
GBP GBP
Trade receivables 6,136,121 192,937
Other receivables 4,150,145 2,314,090
Trade and other receivables 10,286,266 2,507,027
============ ============
Trade receivables are non-interest bearing and are generally on
15-90 day terms. There were no indicators of impairment at the year
end. At 31 December 2017 the group had one customer which accounted
for approximately 90% of trade receivables.
The directors consider that the carrying amount of trade and
other receivables approximates to their fair value due to their
short- term nature. As at the year end, no receivables are past
their due date, hence no allowance for doubtful receivables is
provided.
The total trade and other receivables denominated in South
African Rand amount to GBP5,537,710 (February 2017: GBP464,041) and
denominated in Australian Dollars amount to GBPnil (February 2017:
GBP1,237).
18. Restricted investment
31 December
2017
GBP
Rehabilitation
trust fund
As at 1 March -
2017
Acquisition (note
32) 2,120,425
As at 31 December
2017 2,120,425
--------------------
Rehabilitation
insurance fund
As at 1 March -
2017
Acquisition (note
32) 1,724,029
As at 31 December
2017 1,724,029
--------------------
Total restricted
investment 3,844,454
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 (note 23).
19. Available-for-sale financial asset
31 December
2017
GBP
AIM listed shares
As at 1 March -
2017
Additions 2,004,556
Fair value movement (779,930)
As at 31 December
2017 1,224,626
--------------------
The Group measures the fair value of an instrument using the
quoted price in an active market for that instrument (a level 1
valuation technique). 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.
20. Cash and cash equivalents
31 December 28 February
2017 2017
GBP GBP
Cash at hand and in bank 7,218,820 131,155
===========
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. The
directors consider that the carrying amount of cash and cash
equivalents approximates their fair value.
The total cash and cash equivalents denominated in South African
Rand amount to GBP4,810,123 (February 2017: GBP92,913), denominated
in Australian Dollars GBPnil (February 2017: GBP3,154) and
denominated US Dollars GBP543,473 (February 2017: GBPnil).
21. Borrowings and other financial liabilities
31 December 28 February
2017 2017
GBP GBP
Short-term loans - 128,767
Convertible loan notes 5,815,092 -
Other financial liabilities 1,012,490
6,827,582 128,767
During the year the company completed a fundraising of GBP8.0
million through the creation and issuance of convertible bonds,
with denomination of GBP25,000 each, which bear a coupon of 7.5 per
cent per annum and have a maturity date of two years from the date
of issuance (the "Maturity Date") (the "Convertible Bonds"). The
Convertible Bonds were issued at 98 per cent of face value in two
tranches, the first tranche of GBP4,500,000 and the second tranche
of GBP3,500,000.
The Convertible Bonds are convertible into BMN ordinary shares
at a price equal to the average of five days volume weighted
average price (as published by Bloomberg) determined over the ten
trading days immediately prior to receipt of a conversion notice by
the Company from the Investor.
A total of 11,111,111 warrants over BMN ordinary shares were
issued. The warrants have a three-year term, a strike price of
14.4p and are exercisable at any time (see note 25). The fair value
of the warrants have been treated as issue costs and included in
the effective interest rate calculation.
The company has the option to redeem the Convertible Bonds prior
to the Maturity Date at 105 per cent of the face value of the
outstanding Convertible Bonds to be redeemed. All bonds have been
redeemed or settled since the year end (see note 31).
Other financial liabilities include the fair value of the
conversion option in the loan notes, determined based on
discounting the loan note face value using a rate of 7% based on
similar instruments without a conversion option.
The effective interest rate used to amortise the convertible
bonds is 21.5%.
22. Trade and other payables
31 December 28 February
2017 2017
GBP GBP
Trade payables 8,059,604 254,574
Other payables 4,729,604 109,137
Accruals 2,217,991 922,629
15,007,199 1,286,340
============ ============
Trade and other payables principally comprise amounts
outstanding for trade purchases and on-going costs. The average
credit year 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 GBP7,647,159 (February 2017: GBP312,756), GBPnil
(February 2017: GBP18,535) is denominated in Australian Dollars and
GBP3,531,958 is denominated in US Dollars (February 2017:
GBPnil).
23. Post-retirement medical liability
The following tables summarise the components of the net benefit
expense recognised in the statement of comprehensive income and the
amounts recognised in the statement of financial position.
31 December 2017 28 February
2017
GBP GBP
Benefit liability
As at 31 March - -
2017
Acquisition (note 2,063,042 -
32)
Actuarial changes - -
arising from
changes in financial
assumption
-------------------------- ----------------------
2,063,042 -
========================== ----------------------
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
2014.
The main assumptions in the valuation are:
Discount rate 10.10%
Health care cost inflation 8.80%
Average retirement age 76.3 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%: GBP2.2 million; Less 1%: GBP1.85
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%: GBP0.2 million; Less 1%: GBP1.8 million.
24. Environmental rehabilitation liability
31 December 28 February
2017 2017
GBP GBP
As at 1 March - -
2017
Arising on acquisition 4,943,249 -
(note 32)
As at 31 December 4,943,249 -
2017
============ ============
Provision for future environmental rehabilitation costs are made
on a progressive basis. Estimates are based on costs that are
regularly reviewed and adjusted as appropriate for new
circumstances.
The rehabilitation provision represents the present value of
rehabilitation costs relating to the mine sites, which are expected
to be incurred up to 2037, which is when the producing mine
properties are expected to cease operations. The provisions are
based on management's estimates and assumptions based on the
current economic environment. Actual rehabilitation costs will
ultimately depend upon future market prices for the necessary
rehabilitation works and timing of when the mine ceases
operation.
The discount rate used in the calculation of the provision as at
31 December 2017 was 9.79%.
25. Share capital and share premium
Number Nominal Share premium Total share capital
of shares value of and premium
issued shares
and fully of 1 pence GBP GBP
paid each
GBP
Balance at 1 March 2016 486,337,438 4,863,373 59,927,541 64,790,914
Shares issued for warrants exercised 12,305,401 123,054 172,276 295,330
Other issues 197,571,432 1,975,714 1,250,286 3,226,000
Share issue costs - - (426,180) (426,180)
Balance at 28 February 2017 696,214,271 6,962,141 60,923,922 67,886,063
------------ ----------- ------------- -------------------
Balance at 28 February 2017 696,214,271 6,962,141 60,923,922 67,886,063
Shares issued for warrants exercised 70,858,086 708,581 982,430 1,691,011
Shares issued in respect of convertible
bonds 13,056,184 130,562 919,438 1,050,000
Other issues - Dawnmin 41,000,000 410,000 240,000 650,000
Distribution of capital on de-merger - - (16,148,000) (16,148,000)
Shares issued on acquisition 54,766,364 547,664 4,388,659 4,936,323
Balance at 31 December 2017 875,894,905 8,758,948 51,306,449 60,065,397
------------ ----------- ------------- -------------------
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 2017 the Company owns 670,000 (February
2017: 670,000) treasury shares with a nominal value of 1 pence.
Dawnmin
On 15 June 2017, Greenhills Resources Limited ("Greenhills")
acquired a 49.5% interest in Dawnmin Africa Investments Limited
("Dawnmin") from a consortium of Namibian shareholders. In
accordance with the terms of the SSCA, 41 million ordinary shares
of 1 pence each in Bushveld ("Consideration Shares") were issued to
the Sellers.
Capital reduction on de-merger of Greenhills
As explained in note 12, on 9 November 2017, the group completed
a de-merger of Greenhills Resources.
Upon Admission of AfriTin, the following occurred:
-- the sub-division of the Company's share capital into Ordinary
Shares and Redeemable Shares (on a one for one basis);
-- 85% of the issued share capital of Greenhills Resources was
transferred by the Company to AfriTin at the Deemed Value;
-- AfriTin issued the Demerger Shares to the Bushveld Shareholders; and
-- the Company redeemed the Redeemable Shares, at an aggregate
redemption price equal to the Deemed Value, which will be deemed to
have been satisfied by the Company effecting the transfer of 85% of
the Greenhills Shares to AfriTin and procuring the issue by AfriTin
of the Demerger Shares to the holders of the Redeemable Shares in
accordance with the Demerger Agreement.
The Demerger constituted a reduction of capital by Bushveld
Minerals and an indirect distribution to Bushveld Shareholders of
85% of their indirect interest in Greenhills Resources.
26. Provisions
Leave Performance Surface Other Total
pay and bonus lease
bonus GBP GBP GBP GBP
GBP
Balance at - - - -
1 March 2017
Acquired during
the period 688,945 958,655 851,558 74,131 2,573,289
--------- ------------
Balance at
31 December
2017 688,945 958,655 851,558 74,131 2,573,289
--------- ------------ ========= ======== ==========
Leave pay and 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.
27. Warrants
The following warrants were granted during the 10 months ended
31 December 2017:
Warrants granted
---------------------- ----------- ----------- ----------------------
Date of grant 07/04/2017 15/09/2017 18/12/2017
Number granted 15,197,368 6,332,236 4,925,073
Contractual life 3 years 3 years 3 years
Estimated fair value GBP0.04 GBP0.03 GBP0.02
per warrant
----------------------- ----------- ----------- ----------------------
The following warrants were granted during the year ended 28
February 2017:
Warrants granted
---------------------- ----------- ----------- ----------- -----------
Date of grant 27/10/2016 01/09/2016 01/09/2016 07/06/2016
Number granted 5,357,143 3,866,667 19,333,334 24,166,667
Contractual life 3 years 5 years 2 years 2 years
Estimated fair value GBP0.004 GBP0.007 GBP0.003 GBP0.005
per warrant
---------------------- ----------- ----------- ----------- -----------
Date of grant 07/06/2016 07/06/2016 02/06/2016 07/06/2016
Number granted 434,000 652,000 4,833,333 25,000,000
Contractual life 4 years 4 years 5 years 2 years
Estimated fair value GBP0.003 GBP0.005 GBP0.01 GBP0.05
per warrant
---------------------- ----------- ----------- ----------- -----------
The estimated fair values were calculated by applying the Black
Scholes pricing model. The model inputs were:
Warrants scheme
---------------------- ----------- ----------- -----------
Date of grant 07/04/2017 15/09/2017 18/12/2017
Share price at grant
date 8p 9p 8p
Exercise price 6.9p 14.2p 14.2p
Expected life 12 months 12 months 2 years
Expected volatility 66% 66% 66%
Expected dividends Nil Nil Nil
Risk-free interest
rate 3.00% 3.00% 3.00%
The warrants in issue during the year are as follows:
Number of Weighted
warrants average
exercise
price
GBP
-------------------------------- ------------- ----------
Outstanding at 1 March 2017 81,865,718 0.03
Granted during the 10 months
to 31 December 2017 26,454,677 0.09
Exercised during the 10 months
to 31 December 2017 (83,193,487) 0.02
Outstanding at 31 December
2017 25,156,980 0.08
Exercisable at 30 December
2017 25,156,980 0.08
-------------------------------- ------------- ----------
The warrants outstanding at the year-end have a weighted average
exercise price of GBP0.08, with a weighted average remaining
contractual life of 2.2 years.
The group has recognised a charge amounting to GBP972,628 during
the 10 months (year to February 2017: GBP426,180).
28. 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
GBP6,827,582 which have been fully settled post year end.
The capital structure of the group consists of cash and cash
equivalents and equity, comprising issued capital and retained
losses. 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 in listed shares
Categories of financial instruments
The group holds the following financial assets:
31 December 28 February
2017 2017
GBP GBP
Loans and receivables
Trade and other receivables 10,286,266 2,507,027
Restricted investment 3,844,454 -
Cash and cash equivalents 7,218,820 131,155
Available for sale 1,224,626 -
financial assets
Total financial assets 22,574,166 2,638,182
============ ============
The group holds the following financial liabilities:
31 December 28 February
2017 2017
GBP GBP
Other financial liabilities
Trade and other payables 15,007,199 1,286,340
Borrowings 5,676,927 128,767
------------ ------------
Total financial liabilities 20,684,126 1,415,107
============ ============
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 polices 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:
Credit risk
Credit risk arises principally from the group's cash balances
with further risk arising due to its other receivables and
available-for-sale investments. Credit risk is the risk that the
counterparty fails to repay its obligation to the group in respect
of the amounts owed. The group gives careful consideration to which
organisations it uses for its banking services in order to minimise
credit risk.
It is the group's policy that all customers and 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:
31 December 28 February
2017 2017
Currency GBP GBP
Sterling 1,996,281 35,088
South African Rand 4,810,123 92,913
United States Dollar 412,416 3,154
------------ ------------
7,218,820 131,155
============ ============
At 31 December 2017, 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 2017, 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.
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 2017, the group had
GBP7,218,820 (February 2017: GBP131,155) of cash reserves.
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
With the exception of cash and cash equivalents, the group's
only interest-bearing assets or liabilities were the convertible
loan notes issued during the year (see note 21), which carry a
fixed rate of interest and have been redeemed or settled in full
subsequent to the reporting date. The group was therefore exposed
to minimal interest rate risk during the year. For this reason, no
sensitivity analysis has been performed regarding interest rate
risk.
Foreign exchange risk
As highlighted earlier in these financial statements, the
functional currency of the group is Pound Sterling. The group also
has foreign currency denominated assets and liabilities. Exposures
to exchange rate fluctuations therefore arise. The carrying amount
of the group's foreign currency denominated monetary assets and
liabilities, all in Pound Sterling, are shown below:
31 December 28 February
2017 2017
GBP GBP
Cash and cash equivalents 5,277,171 96,067
Other receivables 4,150,145 465,278
Trade and other payables (15,007,199) (331,291)
------------- ------------
(5,579,883) 230,054
============= ============
The group is exposed to a level of foreign currency risk. Due to
the minimal level of foreign transactions; the directors currently
believe that foreign currency risk is at an acceptable level.
The group does not enter into any derivative financial
instruments to manage its exposure to foreign currency risk.
The following table details the group's sensitivity to a 10%
increase and decrease in Pound Sterling against the Rand and the US
Dollar. 10% is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents
management's assessment of the reasonable possible change in
foreign exchange rates. The sensitivity analysis includes only
outstanding foreign currency denominated monetary items and adjusts
their translation at the year end for a 10% change in foreign
currency rates. The table below shows the effect of a 10% weakening
and strengthening of Pound Sterling against the Rand:
Rand currency Rand currency
impact strengthening impact weakening
10 months to 31 December 2017 GBP GBP
Assets 15,913,715 19,450,096
Liabilities (15,982,262) (19,533,876)
----------------------- -------------------
(68,547) (83,780)
================================== ======================= ===================
US$ US$
10 months to 31 December 2017 impact strengthening impact weakening
GBP GBP
Assets 1,218,602 (1,489,402)
Liabilities (23,262) 28,431
------------------------ --------------------
1,195,340 (1,460,971)
================================== ======================== ====================
29. Operating lease commitments
The group had total commitments at the reporting date under
non-cancellable operating leases falling due as follows:
31 December 28 February
2017 2017
Land and Land and
buildings buildings
GBP GBP
Within one year 142,782 135,730
Between one and two
years 284,760 145,255
427,542 280,985
============ ============
30. Contingent liabilities
As required by the Minerals and Petroleum Resources Act (South
Africa), a guarantee amounting to GBP4,862,328 before tax and
GBP3,500,896 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 Guardrisk Insurance Company Ltd with restricted use by
the Group, as per the below:
The restricted cash disclosed as a current asset consist of
GBP2,112,835 (2016: GBPnil) paid to lnvestec Bank Limited and
GBP1,731,619 (2016: GBPnil) paid to Guardrisk Insurance Company
Ltd, to enable Guard risk Insurance Company Ltd to issue a
guarantee to the Department of Mineral Resources for the mine's
environmental rehabilitation obligation. The insurance company
deposited this balance in a Money Market account and interest at a
rate of 5.75% is earned on the net credit balance. The guarantee is
valid for three years, commencing on 1 April 2015 and the funds are
only available if the agreement is terminated with a three months'
notice period. The contract will be renewed on 1 April 2018.
31. Capital commitments
31 December 28 February
2017 2017
GBP GBP
Authorised and contracted 2,172,737 -
for
Authorised but not 1,143,463 -
contracted for
3,316,200 -
============ ============
32. Acquisition of subsidiary
On 21 December 2017, the group completed the acquisition of 55
per cent of Bushveld Vametco, being all the ordinary shares in
Bushveld Vametco not currently owned by the Company
("Acquisition"). The Acquisition constituted a reverse takeover
under the AIM Rules and was therefore subject to shareholder
approval and re-admission of the Enlarged group to trading on AIM
("Admission"). Following the Acquisition, the Company holds 100 per
cent. of the issued share capital of Bushveld Vametco Limited
("BVL") and, through BVL, owns a 78.8 per cent. economic interest
in Strategic Minerals Corporation. Strategic Minerals Corporation
("SMC"), in turn holds a 75 per cent. interest in Vametco Holdings
Limited, which has a 100 per cent. interest in the Vametco vanadium
mine, a high quality, low cost mine and plant producing a trademark
protected vanadium product and a global vanadium customer base.
The Acquisition increased the Company's indirect interest in
Vametco Holdings from 26.6 per cent. to 59.1 per cent and resulted
in the group obtaining control, thus enabling it to fully
consolidate the SMC group in its financial statements from the date
of Acquisition. The Directors believe that the Acquisition benefits
the Company and its shareholders as follows:
-- Increased exposure to vanadium, a commodity with a robust and
growing demand profile amid a constrained and concentrated supply
environment resulting in a sustained structural deficit with no
significant new supply anticipated in the near future;
-- Bushveld owns a majority shareholding in a high grade,
low-cost open-cast and simple mining proposition with access to
brownfield processing infrastructure that is being acquired for
considerably less than its replacement cost;
-- Vametco enjoys a significant c.3 per cent. share of the global vanadium market;
-- The vanadium price has enjoyed a strong performance in 2017
with prices increasing by 54% (source: Metal Bulletin) and the
trading price being in excess of US$40/kgV (at the end of December
2017);
-- The production base is planned to expand to over 5,000 mtV
per annum by 2020, supported by one of the largest primary vanadium
resource bases in the world (under the ownership of Bushveld);
-- Productivity initiatives targeting further production cost efficiencies;
-- Vametco has the potential to diversify its product range
beyond its Nitrovan(R) product; and
-- The Acquisition is further aligned with the Company's
aspirations in the global energy storage space by providing
capacity for potential electrolyte manufacturing.
32. Acquisition of subsidiary (continued)
A. Consideration transferred
The following table summarises the acquisition date fair value
of each major class of consideration transferred.
Note GBP
================================ ====== ===========
Cash 3,336,744
---------------------------------------- -----------
Equity instruments (54,766,364
ordinary shares) I 4,936,425
-------------------------------- ------ -----------
Deferred consideration II 739,391
-------------------------------- ------ -----------
EBITDA earn out III 3,717,286
-------------------------------- ------ -----------
12,729,846
--------------------------------------- -----------
I. Equity instrument issued
The fair value of the ordinary shares issued was based on the
listed share price of the Company of 9 pence per share at the time
of acquisition.
II. Deferred consideration
The group has agreed to pay the selling shareholder 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. The
consideration has been discounted at a rate of 12.5%.
III. EBITDA earn out
A final payment is payable on publication of the Vametco
Holdings Limited accounts for the year ended 31 December 2020, to
be calculated by reference to the EBITDA of Vametco Holdings
Limited for the period covered by its 2020 accounts. The
consideration has been calculated based on forecast 2020 EBITDA and
has been discounted at a rate of 12.5%.
Acquisition related costs
The group incurred acquisition-related costs of GBP744,000.
These costs have been included in 'administration expenses'.
32. Acquisition of subsidiary (continued)
B. Identifiable assets and liabilities acquired
The following table summarises the recognised amounts of assets
acquired, and liabilities assumed at the date of acquisition.
GBP
Fair value
============================== =============
Property, plant and
equipment 32,820,006
-------------------------------- -------------
Residential properties 2,401,073
-------------------------------- -------------
Deferred tax asset 3,058,677
-------------------------------- -------------
Inventories 12,480,971
-------------------------------- -------------
Trade and other receivables 7,241,259
-------------------------------- -------------
Restricted investment 3,770,005
-------------------------------- -------------
Income tax receivable
/ payable (708,116)
-------------------------------- -------------
Cash and cash equivalents 4,749,656
-------------------------------- -------------
Deferred tax liability (533,009)
-------------------------------- -------------
Deferred consideration
/ earn-out (3,739,716)
-------------------------------- -------------
Post-retirement medical
liability (2,023,090)
-------------------------------- -------------
Environmental rehabilitation
liability (4,847,521)
-------------------------------- -------------
Trade and other payables (11,967,302)
-------------------------------- -------------
Provisions (2,523,456)
================================ =============
Total identifiable
net assets acquired 40,179,437
================================ =============
I. Measurement of fair values
The valuation techniques used for measuring the fair value of
material assets acquired were as follows:
Assets acquired Valuation technique
================ =====================================
Property, plant The fair value of Property,
and equipment Plant and Equipment has been
calculated based on the fair
value of total consideration
paid in an arm's length transaction
between knowledgeable market
participants.
================ =====================================
C. Accounting for the step acquisition
The step acquisition has been accounted for as follows:
The fair value of associates was re-measured on date of
acquisition as GBP10,419,517, with no gain or loss arising from
this re-measurement.
Goodwill was calculated as follows:
GBP
=============================== =============
Fair value of consideration 12,729,846
-------------------------------- -------------
Fair value of non-controlling
interests 17,030,074
-------------------------------- -------------
Fair value of previously
held investment 10,419,517
-------------------------------- -------------
Fair value of net assets
acquired (40,179,437)
-------------------------------- -------------
Goodwill / (gain on -
bargain purchase)
-------------------------------- -------------
D. Other information
Since acquisition, the Vametco group has contributed GBP2.2
million of revenue and GBP637,680 of profit. Had the acquisition
taken place at the start of the period, the Vametco group would
have contributed approximately ZAR 877m (GBP52m) of revenue and ZAR
146m (GBP9m) of profit before tax from the Vametco operations,
based on 10 months pro-rating of the audited results of Bushveld
Vametco Holdings for the period.
33. Related party transactions
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 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. At
the year end, the group owed VM Investments Ltd GBPnil (2017:
GBP39,712).
The remuneration of the directors, who are the key management
personnel of the group, is set out below. Further information about
the remuneration of individual directors is provided in the
Directors' remuneration report.
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Fees for services
as directors 48,750 65,000
Short-term employee
benefits 249,167 346,466
-------------
297,917 411,466
============= =============
Included within the above figure of short-term employee benefits
is an amount of GBP75,000 (February 2017: GBP240,224) which has
been capitalised as part of intangible exploration expenditure.
34. Post balance sheet events
Settlement of convertible bonds
Since year-end the outstanding convertible bonds balance was
reduced by the following conversions:
-- GBP250,000 of convertible bonds converted into 3,078,817
ordinary shares of 1 pence each of the Company at a conversion
price of 8.12 pence each on 18 January 2018. Following the
exercise, Atlas held a total of GBP6,700,000 Convertible Bonds;
-- GBP700,000 of convertible bonds converted into 8,620,689
ordinary shares of 1 pence each of the Company at a conversion
price of 8.12 pence each on 23 January 2018. Following the
exercise, Atlas held a total of GBP6,000,000 Convertible Bonds;
-- GBP1,000,000 of convertible bonds converted into 11,990,407
ordinary shares of 1 pence each of the Company at a conversion
price of 8.34 pence each on 19 February 2018. Following the
exercise, Atlas held a total of GBP5,000,000 Convertible Bonds;
-- GBP725,000 of convertible bonds converted into 8,809,234
ordinary shares of 1 pence each of the Company at a conversion
price of 8.23 pence each 14 March 2018. Following this exercise,
Atlas held a total of GBP4,275,000 Convertible Bonds.
On 14 June 2018, Bushveld fully redeemed the issued Convertible
Bonds. The Convertible Bonds were settled in full for a final
aggregate cash payment of GBP5.116 million, including interest and
early redemption charges.
Equity placing
On 26 March 2018, the Company raised approximately US$22.2
million (GBP15.7 million) (before expenses) by way of an
oversubscribed placing of 152,749,172 new ordinary shares of 1
penny each at a price of 10.3 pence per share with leading
institutional and mining investors (the "Placing"). The price was
calculated as the 5 day volume weighted average price (as published
by Bloomberg) at close of trading Monday 19 March 2018. The Placing
shares represented approximately 14.4% of the Company's issued
share capital on admission.
The planned use of the net proceeds of the Placing, being
approximately US$20.9 million (GBP14.9 million), was to:
-- Redeem the outstanding Atlas Capital Convertible Bond (US$6.3m) (GBP4.5 million);
-- Simplify Bushveld's organisational and corporate structure to
improve Bushveld's exposure to the underlying cash flows of its
assets (US$9.0m) (GBP6.4 million); and
-- Support Bushveld's vanadium expansion programme: Expansion of
the vanadium reserves and resources at the Vametco mine and Brits
Project for future production and support Vametco's expansion plans
to increase production to more than 5,000mtV and beyond (US$5.6m)
(GBP4.0 million).
AfriTin demerger
Following the de-merger of Greenhills Resources Limited,
Bushveld Minerals retained a 17.48 per cent shareholding in
AIM-listed AfriTin Mining Limited from the 17(th) of November 2017.
Post-year end, on the 20(th) of June 2018, AfriTin successfully
completed a private placement of new ordinary shares, with the
result that Bushveld Minerals was diluted from 17.48 per cent to
10.04 per cent. As Bushveld Minerals does not exercise significant
influence over AfriTin, the investment has since been accounted for
as a financial asset available for sale.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR KMGZVKLRGRZG
(END) Dow Jones Newswires
June 29, 2018 02:01 ET (06:01 GMT)
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