TIDMBMN
RNS Number : 8798P
Bushveld Minerals Limited
13 February 2019
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
13 February 2019
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Lemur Q4 Operational Update
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated
primary vanadium producer, with ownership of high grade vanadium
assets in South Africa, 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 (the "Imaloto Project") in
Madagascar.
Key Highlights
-- Review completed of the Bankable Feasibility Study ("BFS")
for the power aspect of the Imaloto Project.
-- Review process initiated for the final draft of the BFS for
the coal mine portion of the Project.
-- Issued a Request for Proposals ("RFP") for Legal Advisory
Services to draft and negotiate EPC (Engineering, Procurement and
Construction) Contract(s) for the power project.
-- Continued progress on the Social and Environmental Impact
Assessment Study ("SEIA") fieldwork.
-- Concluded the due diligence for the project preparation
finance with one lender and continued engagement with all lenders
on project financing.
-- Advanced discussions with export credit insurance provider
for credit and political risk insurance cover.
Prince Nyati, CEO of Lemur Holdings Limited, commented:
"The completion and review of the Bankable Feasibility Study for
the power component of the Imaloto Project represents a key
milestone achieved as we press ahead in ensuring Lemur delivers on
the potential of the Imaloto Project. The Project's bankable
feasibility study shows that the Imaloto Project is feasible and
can deliver significant economic returns. More importantly, the
Imaloto power project is the most advanced Independent Power
Project ("IPP") baseload project in Madagascar. It will have
transformational developmental benefits for the country's southwest
region, where the government has already implemented significant
road infrastructure expansion. The coal reserve and transmission
line is capable to support the generation capacity in excess of
60MW in the medium to long term as suppressed demand is unlocked in
the region.
Furthermore, the peaceful democratic elections in Madagascar
held in December 2018 are a welcome development and positive
indication for projects in the country. With our development
partner, Sinohydro,and advanced funding discussions with financial
institutions, the Imaloto project remains on track to supply
electricity to south western Madagascar."
Details of Operational Update
1. Power BFS:
In Q4 2018, Lemur and its technical advisors completed the
review of the power BFS that was prepared by Sinohydro. The BFS was
prepared on the basis of the agreement signed between Lemur and
Sinohydro in March 2017. The Study contains the technical
specifications for the generation and transmission aspects of the
project:
The main findings from the BFS are summarized as follows:
-- Plant site: This project is located in the Owner's mining
area of Imaloto area, which is near the town of Benenitra in
Toliara Province, Madagascar. Water and coal source assessment
determines that identified sources on site from the Imaloto mine
and the Imaloto-Onilahy rivers confluence meet project
requirements.
-- Installed capacity: Phase-1 installed capacity will be 30MW.
The site expansion is reserved in the design for additional 30MW in
Phase-2, to bring the total capacity to 60MW as prescribed by the
concession agreement with the government of Madagascar.
-- The plant will utilize Circulating Fluidized Bed Combustion
("CFB") technology and Electrostatic Precipitators ("ESP") will be
equipped for emission control.
-- New transmission lines will interconnect the Imaloto power
station, Ilakaka, Toliara and Ambalavao. The initial distance of
the transmission line will be 250km. Post Phase-2, the Imaloto
project transmission network will cover an addressable market
stretching approximately 500km - and will connect Toliara in the
west to Fainaranstoa in the east for the first time.
-- The selected transmission voltage level is 138 kV, which
matches the voltage level currently adopted by JIRAMA.
-- Supporting projects include 3 fully automatic controlled
substations at Toliara substation, Ambalavao substation and Ilakaka
as well as an access road between Ilakaka and the Imaloto power
plant site.
-- The BFS also includes a Staffing plan as well as buildings and other structure design.
-- Design codes and standards: The BFS is performed based on
international standard practices; IFC Environmental, Health, and
Safety General Guidelines; and the relevant provisions of the law
in Madagascar.
Overall, Sinohydro's conclusion of the BFS is that with the
analysis of the project from the aspect of construction condition,
technical scheme, environmental protection, economic benefits and
technical and economic risks, the project is feasible. Therefore,
it is recommended that Lemur progressively develops the Imaloto
Power Plant along with a transmission network project.
2. The final draft of the BFS for the opencast mine has been
completed and is currently undergoing an independent final
review.
3. Fieldwork under the SEIA study has advanced with the final
output expected in Q2 2019, to allow for the completion of the wet
season studies which are expected to commence at the end of March
2019.
4. With the BFS for the power aspect completed and signed-off,
the company is focussing on progressing the EPC discussions for
both the power station and the transmission line. In order to
achieve this, Lemur issued an RFP for legal advisory services in
December 2018 to enable the engagement of EPC partners for the
generation and transmission. It is likely that the engagement of
the EPC partners may be tendered to the market.
5. Since early 2018, Lemur has been in discussions with a number
of financial institutions regarding project financing for the
Imaloto project, with one of these parties completing its
due-diligence in Q4 2018. Once all the parties have concluded their
due-diligence, they will progress to finalise a term sheet on a
syndicated project financing basis.
6. In October 2018, Lemur was granted an extension on an
expression of interest for credit and political risk cover for the
Imaloto project. This was followed by a due-diligence process that
is currently ongoing. The institution involved has shared key terms
with Lemur, however, this aspect of the project will be carried out
together with lender discussions. Therefore, the timelines for the
conclusion of the risk cover terms will be aligned with lender
agreements.
Table 1: Project Objectives: 2019
Objective Current Status
Complete Mine BFS
* Currently under final review
-----------------------------------------
Conclude the SEIA Study - Q2 2019 * Field work ongoing
-----------------------------------------
Appoint EPC Contractor - Q2 2019 * Legal advisors shortlisted
-----------------------------------------
Conclude funding, credit and political * Formal discussions ongoing
risk cover
-----------------------------------------
Enquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo, Chief Executive
Officer
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Relations
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Gabriella von Ille
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low cost, integrated, primary vanadium
producer, with ownership of high grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; the Mokopane
Vanadium Project and the Brits Vanadium Project.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through owning high grade
assets. This incorporates development and promotion of the role of
vanadium in the growing global energy storage market through
Bushveld Energy Ltd, the Company's energy storage solutions
provider. Whilst the demand for vanadium remains largely anchored
in the steel industry, Bushveld believes there is strong potential
for an imminent and significant global vanadium demand surge from
the fast-growing energy storage market, particularly through the
use and adoption of Vanadium Redox Flow Batteries.
While the Company's focus is on vanadium operations and the
development and promotion of VRFBs, it has additional investments
in coal, power and tin.
The 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.
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 over 1,000 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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