TIDMBMN
RNS Number : 3051E
Bushveld Minerals Limited
17 October 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.
17 October 2018
Bushveld Minerals Limited
("Bushveld" or the "Company")
Lemur Q3 Operational Update
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated
primary vanadium producer, with ownership of high grade vanadium
assets, is pleased to provide an operational update in respect of
Lemur Holdings Limited ("Lemur"), the Company's coal and energy
subsidiary that is developing an integrated thermal coal mining and
independent power project ("Imaloto Power Project") in
Madagascar.
Q3 Highlights:
-- Social and Environmental Impact Assessment ("SEIA") fieldwork
ongoing, with more than 50 per cent of the community engagement
completed.
-- SEIA Terms of Reference submitted to Madagascar's Ministry of Environment.
-- Connection and Transmission Agreements signed with state
utility, Jiro sy Rano Malagasy ("JIRAMA") in Q3 2018.
-- Joint review and finalisation of Bankable Feasibility Study
("BFS") submitted by technical development partner, Sinohydro, in
June 2018 still ongoing.
-- Coal mine BFS initiated with completion expected in Q4 2018.
-- Received expression of interest ("EOI") for baseload power
offtake from global mining company in the Imaloto supply catchment
area.
-- Ongoing engagement with lenders for construction phase of the
Imaloto Power Project. Notably, received offer for project
preparation finance from regional development finance institution,
subject to due-diligence.
-- Financial model development completed, subject to finalization of BFS.
-- Overall, the Imaloto project is on track to deliver
electricity to south western Madagascar by 2021.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"We are pleased with the progress being made on the Imaloto
project, especially with respect to securing institutional lenders
for the construction-phase of the project, with a number of the
lenders concluding the initial due-diligence on the project. We
expect to advance discussions on terms of lending after the BFS is
completed in Q4 2018.
"Bushveld remains committed to delivering on the value of the
Imaloto Power Project by ensuring that all key milestones are
achieved according to schedule. This positions the project
favourably for the various strategic options the Company is
considering to ensure Lemur continues to receive the focussed
attention needed in terms of human resources and capital
requirements in order to reach financial close, and ultimately
deliver the much needed electricity to Madagascar while unlocking
value for Bushveld shareholders.
"Furthermore, with presidential elections set for November and
December 2018 we continue to monitor the political environment and
to engage with the government of Madagascar."
Details of Operational Update
Lemur's Madagascar subsidiary Imaloto Power Project SARL ("IPP")
concluded a connection and transmission agreement with state
utility, JIRAMA in Q3 2018. This agreement allows IPP to connect
its planned new transmission line to JIRAMA's system. It also
defines the operating relationship between IPP and JIRAMA.
Lemur is now in the final stages of reviewing the BFS for the
power project prepared by its technical development partner,
Sinohydro in June 2018.
Similarly, the BFS for the coal mine project which started in Q3
2018 is expected to be completed in Q4 2018. Some of the key
expected outputs of the mine BFS include a detailed mine plan and
the economic techno-financial model.
Both the power and the mine BFS are critical considerations for
lenders to assess the viability of the Imaloto project. Once the
BFS studies are completed, Lemur will proceed to the EPC
discussions, which will be a key focus area for the remainder of
2018.
With regards to the SEIA study, Lemur through its environmental
consultants, has conducted extensive environmental studies on both
the project site and impacted areas. In September 2018, Lemur's
SEIA consultants submitted the Terms of Reference of the SEIA study
to the Ministry of Environment of Madagascar. The SEIA fieldwork is
on track and is expected to be completed in Q4 2018. However, Lemur
has made an allowance to conduct specialised studies to include
rainy season impact scenarios, which may extend the completion of
the technical SEIA studies to Q1 2019.
Prince Nyati, CEO of Lemur Holdings Limited, commented:
"The BFS and SEIA studies have been our key focus areas in Q3
2018. Notwithstanding, we are pleased to announce the conclusion of
the Transmission and Connection agreement with JIRAMA. This is a
significant development because the agreement not only addresses
the critical aspects of how IPP will connect to the JIRAMA network,
but it also provides clarity on the link between the provisions of
the concession agreement and the PPA.
"Our focus for the remainder of 2018 is to complete both the
mine and power BFS studies, which we expect to finalise in Q4 2018.
We will also be progressing project funding discussions and related
due-diligence activities as well as initiating EPC
discussions."
Summary of 2018 Project Objectives:
Table 1: Status of 2018 Project Objectives
Objective Current Status (Q3)
Obtain Project
Concession * 30-year Concession Agreement with the government
executed
-------------------------------------------------------------
Complete BFS with
Sinohydro during * Draft BFS completed by Sinohydro
H2 CY18
* Lemur currently reviewing BFS via an independent
consultant
-------------------------------------------------------------
Conclude the SEIA
Study by Q4 2018 * Site inception visit completed
* Field work initiated and over 50% of community
engagement completed
* Terms of reference for SEIA submitted to Ministry of
Environment
-------------------------------------------------------------
Secure additional
offtakes above * PPA with JIRAMA amended to increase up to 25MW
the current demand
from JIRAMA covered
under the PPA * EOI for offtake of baseload power from the Imaloto
project received from an international mining company
in the Imaloto supply catchment area
* Discussions with other private large power offtakers
in the area ongoing
-------------------------------------------------------------
Pursue funding
and credit enhancement * Multiple discussions with various lenders at
options for the different stages - most advanced currently conducting
Project a due-diligence on the project
* Received the third EOI from a major development
financial agency
-------------------------------------------------------------
Other Objectives for 2018:
-- Seek to conclude coal offtakes with third parties - 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
-- Explore strategic partnerships for the project (technical, commercial and financial)
Enquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo
Chief Executive Officer
Chika Edeh
Head of Investor Relations
Lemur Holdings Limited +27 (0) 11 268 6555
Prince Nyati
Chief Executive Officer,
Lemur Holdings Limited
SP Angel Corporate Finance
LLP Nominated Adviser & Broker +44 (0) 20 3470 0470
Ewan Leggat
Richard Morrison
Alternative Resource Capital Joint Broker
Rob Collins +44 (0) 207 186 9001
Alex Wood +44 (0) 207 186 9004
Tavistock Financial PR
Charles Vivian / Gareth Tredway +44 (0) 207 920 3150
Lifa Communications Financial PR (South Africa)
Gabriella von Ille +27 (0) 711 121 907
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low cost, integrated, primary vanadium
producer, with ownership of high grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; the Mokopane
Vanadium Project and the Brits Vanadium Project.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through 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 coal platform comprises the wholly-owned Imaloto Power
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.
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 Lemur Holdings
Lemur Holdings is a wholly owned subsidiary of Bushveld Minerals
and is the company's coal and power platform. The Imaloto Power
Project is located in the southwest of Madagascar and consists of a
136 million tonne coal resource (90 per cent of which is of JORC
compliant Measured and Indicated). The Project also includes a
30-year Concession for an initial 60MW mine mouth coal power plant
as well as over 250km of new transmission lines, developed in
parallel as one of Madagascar's leading independent power
producers. Imaloto also has a secured 30-year electricity off-take
with JIRAMA, the State Utility.
The initial phase of the Imaloto Power Project will potentially
increase Madagascar's baseload capacity by approximately 15 per
cent and almost double the transmission lines in the country. This
is particularly important as the southwest region is mostly rural
and about 95 per cent of the population does not have access to
electricity. In terms of the in economic impact on southwest
Madagascar, the Imaloto Power Project is set to contribute close to
US$200 million in foreign direct investment into Madagascar and
will create about 1,650 direct jobs and approximately US$1 billion
dollars in revenue for the government of Madagascar over its useful
life.
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END
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