TIDMBMN
RNS Number : 6937V
Bushveld Minerals Limited
10 April 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.
10 April 2019
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Lemur Q1 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, for the quarter ended 31 March 2019.
Key Highlights
-- Lemur has signed a Project Preparation Finance ("PPF") facility agreement with the Development Bank of Southern
Africa ("DBSA") for an amount of US$1 million.
-- The facility will assist in funding the completion of the project development activities and advisory services
for the Imaloto Project, thereby enabling Lemur to reach financial close1.
-- Review and sign-off of the power bankable feasibility study ("BFS") has been completed by Sinohydro.
-- Review of opencast mine BFS completed. Optimisation exercise underway to consider the inclusion of underground
mining within the development plan.
-- Engineering, Procurement and Construction ("EPC") contract negotiations for the power plant are progressing.
-- Social and Environmental Impact Assessment ("SEIA") fieldwork ongoing and on track to be completed in Q2 CY2019.
-- Negotiations with potential lenders are progressing.
1. Financial close refers to the date on which Lemur secures
funding to implement the Imaloto Project pursuant to all finance
documents being entered into and all the conditions precedent being
fulfilled to the satisfaction of the funders.
Prince Nyati, CEO of Lemur Holdings Limited, commented:
"We are pleased that the Imaloto Project is progressing
according to plan. We are particularly delighted to receive support
from the DBSA. We believe that the funding will help us finalise
our objective of achieving financial close and providing reliable
base load power to southern Madagascar. DBSA participation in the
development of the Imaloto Project highlights the economic
potential of our project as well as the developmental benefits it
offers to southwestern Madagascar."
Details of DBSA Project Preparation Financing
According to the DBSA, the PPF has been created and is earmarked
for projects which the DBSA's financing divisions can include in
their pipeline. The funds are intended to be used for the
following:
-- Creating an environment for implementation of infrastructure projects in Southern Africa;
-- Conducting pre-feasibility studies;
-- Conducting bankable feasibility studies; and
-- Assisting with costs to reach financial close.
The funds are provided with the view that projects financed
through this stream will be funded through DBSA's lending
divisions.
Context for Lemur Holdings:
In December 2018, the DBSA board of directors approved the
funding of US$1 million in the PPF for Lemur.
The PPF is important to Lemur for the following primary
reasons:
-- Provides "at-risk" funding for Lemur so it can develop its Imaloto Project, complete feasibility and reach
financial close
-- Participating in a PPF with a lender accelerates the due-diligence and approval process for the eventual project
finance.
Subsequent to the approval of the DBSA board of directors, the
parties signed the facility agreement on 12 March 2019 at the DBSA
offices in South Africa. The following are the key points in the
US$1 million Facility Agreement:
-- All amounts advanced under the facility shall be applied only to cover eligible costs as part of project
preparation, such as the costs to be incurred by Lemur during the project preparation phase in relation to the
project development;
-- More specifically, the facility agreement specifically covers funding for the following project development
activities:
-- Completion of the Social and Environmental Impact Assessment
("SEIA"), including various specialist studies;
-- Technical support and advisory services; and
-- Legal, financial / transactional and other advisory
services;
-- Operating costs, purchase of equipment and land are not eligible;
-- A joint project steering committee between DBSA and Lemur has been appointed;
-- The project steering committee will be responsible for the
review and disbursement of payments for eligible project costs. The
committee will be made up of at least three representatives from
DBSA and two representatives from Lemur and will meet on a regular
basis.
Lemur will be able to draw down on the facility once South
African Reserve Bank approval has been received.
Mohale Ragkate, Group Executive of the Project Preparation
Division at DBSA, commented:
"Energy is central to any country's development, and the Imaloto
Project is well positioned to play an important role in providing
electricity to Madagascar. A reliable power supply would have
transformational developmental benefits for the country's southwest
region, which currently does not have any baseload or transmission
infrastructure. We believe that the conclusion of the project
preparation financing paves the way for advanced discussions
between DBSA and Lemur on project finance for the construction
phase of the project."
Other developments
-- Sinohydro has completed the review of Lemur's power BFS and signed-off on the final report.
-- Review of the opencast mine BFS has been completed. Lemur has begun to focus on optimising the mix of opencast
and underground mine output and an independent consultant, Bara Consulting, has been appointed to conduct the
underground mine BFS.
-- Negotiations on an EPC contract have reached an advanced stage. Lemur expects a contract to be signed by the end
of Q2 2019.
-- Fieldwork for the SEIA is ongoing and is on track to be completed by the end of Q2 2019, despite the excessive
rains encountered in March 2019. Submission to the Ministry of Energy is to follow.
-- Negotiations have progressed with various lenders to secure construction funding on a project finance basis.
2019 Project Objectives
Objective Current Status
Complete Mine BFS and optimisation Currently under final review
---------------------------------
Conclude the SEIA Study in Q2 2019 Field work ongoing
---------------------------------
Appoint EPC Contractor for power Legal advisors shortlisted
plant in Q2 2019
---------------------------------
Invite contractors for transmission Preparing expression of interest
and operation and maintenance of and request for proposal
information
---------------------------------
Conclude funding, credit and political Formal discussions ongoing
risk cover
---------------------------------
Update on Vametco mineral reserve and resource estimate:
Further to the update announced on 27 March 2019, the Vametco
Mineral reserve and resource estimate is currently undergoing final
stages of review and will be published as soon as it is available,
albeit this may now be after 15 April 2019.
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance Nominated Adviser +44 (0) 20 3470
LLP & Broker 0470
Ewan Leggat / Richard Morrison
Jonathan Williams / Richard
Parlons
Alternative Resource Capital Joint Broker
+44 (0) 20 7186
Rob Collins 9001
+44 (0) 20 7186
Alex Wood 9004
+44 (0) 20 7236
BMO Capital Markets Limited Joint Broker 1010
Jeffrey Couch / Tom Rider
Michael Rechsteiner / Neil
Elliot
+44 (0) 20 7920
Tavistock Financial PR 3150
Charles Vivian / Gareth Tredway
Financial PR (South +27 (0) 11 502
Brunswick Africa) 7300
Miyelani Shikwambana
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.
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
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