TIDMBMN
RNS Number : 0938O
Bushveld Minerals Limited
30 September 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.
30 September 2019
Bushveld Minerals Limited
("Bushveld Minerals", the "Group" or the "Company")
Unaudited Interim Results for the Six Months ended 30 June
2019
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated
primary vanadium producer, with ownership of high grade vanadium
assets, is pleased to announce its half year unaudited results for
the six months ended 30 June 2019.
Key Highlights
H1 2019 Group financial highlights
-- Revenue of US$78.0 million (H1 2018: US$83.7 million).
-- EBITDA(1) of US$41.0 million (H1 2018: US$42.8 million).
-- Profit after tax of US$30.8 million (H1 2018: US$28.5 million).
-- Free cash flow(2) of US$23.3 million (H1 2018: (US$16.4 million).
-- Net cash balance of US$66.1 million at 30 June 2019 (31 December 2018: US$42.0 million).
-- Earnings per share of 1.92 cents (H1 2018: 1.57 cents).
-- Ferrovanadium price averaged US$56.3/kgV in H1 2019 (H1 2018: US$65.5/kgV).
-- Year to date average ferrovanadium price of US$48.2/kgV(3)
(.)
1. EBITDA comprises operating profit plus depreciation and amortisation.
2. Free cash flow comprises net operating cash flows less net investing cash flows.
3. London Metal Bulletin year to date average as at 20 September 2019.
H1 2019 Group operating highlights
-- On 1 May 2019, the Company announced the conditional
acquisition of Vanchem for a consideration of US$68 million. The
transaction is expected to be completed on 31 October 2019.
H1 2019 Bushveld Vanadium operational highlights
Vametco
-- Transformation programme successfully delivering, with Q2
2019 production being the highest quarter for production in over
two years.
-- Production for H1 2019 was 1,392 mtV, a two per cent increase
relative to H1 2018 (H1 2018: 1,360 mtV).
-- On track to meet 2019 production guidance of 2,800 mtV to 2,900 mtV.
-- On track to meet 2019 unit cash cost guidance of US$18.90/kgV to US$19.50/kgV.
H1 2019 Bushveld Energy operational highlights
Electrolyte Plant
-- The Environmental Impact Assessment ("EIA") for the proposed
plant in East London, South Africa, has passed the public
participation stage and is on track to be completed this year.
-- The first batch of electrolyte was successfully produced
using Vametco's feedstock, with the samples being sent to vanadium
battery companies for testing.
Vanadium electrolyte rental model
-- Implementation of the first rental contract was announced
with Avalon Battery Corporation and its customer, Sandbar, in the
United States.
-- Negotiating larger rental agreements in Africa, Asia, Europe and North America.
-- Negotiations in progress with external commercial debt providers to support the structure.
Eskom Vanadium Redox Flow Battery project
-- The vanadium redox flow battery ("VRFB") installed with Eskom
was commissioned and now operating fully.
Vametco based Solar Mini-Grid Project
-- Commenced a number of activities including an Environmental
Assessment, a grid connection and geotechnical studies. Procurement
for the project commenced in Q3 2019.
Group events post 30 June 2019
Vametco
-- Successfully completed the wages and benefits negotiations
with the Association of Mineworkers and Construction Union ("AMCU")
for the three year period from 1 July 2019 to 30 June 2022.
Vanchem acquisition
-- On 28 August 2019, unconditional approval for the acquisition
was received from the Competition Commission of South Africa.
-- The transaction remains on track to be completed on 31
October 2019. The outstanding conditions precedent, namely, the
cession of specific commercial agreements and South African Reserve
Bank approval, are expected to be satisfied.
-- The Company is making good progress with local banks for debt
facilities and remains confident of completing the transaction
without relying on equity capital markets. Further updates will be
provided as appropriate.
Group Outlook
-- Execution of the transformation programme at Vametco to
increase production rates to 3,400 mtVp.a. during the course of
2020 and then to 4,200 mtVp.a. during 2022, remains on track.
-- Develop a production platform of more than 8,400 mtVp.a. with
a nameplate capacity of 10,000 mtVp.a within the next five
years.
-- On completion of the Vanchem acquisition, the Company will
offer a diverse product offering for the steel, chemicals and
energy storage markets.
-- Continue to reinforce Bushveld Energy's position as a leading
energy storage solutions provider.
-- Invest in the vanadium supply chain individually or through partnerships.
-- Progress workstreams for the Johannesburg Stock Exchange ("JSE") listing.
Appointment of joint broker
-- Appointment of Peel Hunt LLP as joint corporate broker to the Company with immediate effect.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"I am pleased to report that Bushveld Minerals has continued to
build on firm foundations in the first half of 2019, enjoying
progress across the Group and establishing new platforms for
further future growth.
"The Group's EBITDA of US$41million and free cash flow
generation of US$23 million achieved in the period highlights the
mine's robust nature as a low-cost, highly cash generative
operation, and was achieved in a period of weaker vanadium prices,
which averaged 14 per cent less than a year earlier. Even with this
strong result, we will be focusing our efforts at Vametco on
further refining processes to maintain cost control.
"Operational performance has been improved through our
transformation programme at Vametco, which we started to implement
at the beginning of the year. Execution of the transformation
programme is ongoing throughout the rest of this year and into
2020, during which we will reach a steady state of production of
3,400 mtV per annum.
"In August, we were pleased to receive approval from the
Competition Commission of South Africa to acquire the Vanchem
assets, without conditions, which was a key milestone in closing
the transaction on 31 October 2019. We now look forward to
completing the remaining conditions precedent and completing this
important transaction for the Group.
"At Bushveld Energy, the first half of 2019 has seen a broader
and improved understanding of its innovative business model. The
combination of the electrolyte rental product and the current
vanadium price is increasing confidence that VRFBs will become a
long-term feature of energy grids both in Africa and globally. We
expect these events to increase vanadium consumption from VRFBs
during second half of 2019 and beyond."
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
Abigail Wayne / Richard Parlons
+44 (0) 20 7236
BMO Capital Markets Limited Joint Broker 1010
Jeffrey Couch / Tom Rider
Michael Rechsteiner / Neil
Elliot
+44 (0) 20 7418
Peel Hunt LLP Joint Broker 8900
Ross Allister / James Bavister
David McKeown
Tavistock Financial PR
+44 (0) 207 920
Charles Vivian / Gareth Tredway 3150
Brunswick Financial PR (South
Africa)
+27 (0) 11 502
Miyelani Shikwambana 7300
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, 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 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(TM) , 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 mixplant and
finally into the shaft furnaces to produce Nitrovan(TM) .
About Bushveld Energy Limited
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that
electricity in Africa intersects paramount potential for social
transformation with an immense commercial opportunity.
Launched in 2016, Bushveld Energy is focused on developing and
promoting the role of vanadium in the growing global energy storage
market through application in vanadium redox flow batteries. Its
near term strategy is to deploy several VRFB systems as part of its
longer term vision to become a significant electricity storage
provider in Africa by 2020, meeting the demand for utility scale
energy storage in Africa by leveraging South Africa-mined and
beneficiated vanadium.
http://www.bushveldenergy.com
Chief Executive Report
Dear Shareholder,
I am pleased to report back on a successful first half of the
2019 financial year. The Company is on track with its strategic
initiatives to deliver a truly integrated and leading low-cost
vanadium platform characterised by large high-grade vanadium
deposits and mines; scalable, low-cost, cash generating vanadium
primary processing assets and a downstream energy storage business,
positioned to play a leading role in the growing stationary energy
storage market.
VANADIUM PRODUCTION OPERATIONS
Bushveld has one of the largest high-grade primary vanadium
resource base in the world. The Company's vanadium resource base
currently consists of three mineral assets, Vametco, Brits and
Mokopane. Bushveld's processing facilities consist of Vametco and
Vanchem (conditional acquisition). The Company's mineral resources
and processing facilities are situated within the Bushveld Complex
in South Africa.
Vametco (74% ownership)
At the core of this strategy is Vametco, located in Brits,
Northwest Province. Vametco is a low cost primary vanadium mining
and processing company which produces a trademark vanadium product,
Nitrovan(TM) , as well as Modified Vanadium Oxide.
On 22 May 2019, following a significant amount of exploration
work, including a 2018 drilling campaign comprising 13 drill holes
over a total of 1,506m, the Company announced a doubling of its Ore
Resources and a significant increase in the total mineral resource.
Vametco has a 186.7 Mt JORC compliant resource averaging 1.98 per
cent V(2) O(5) in magnetite grades (including 48.4 Mt in reserves),
and a life of mine of 27 years.
Table 1: Vametco operational and financial overview
Unit H1 2019 H1 2018 Variance
Vanadium produced (mtV) 1,392 1,360 2.4%
---------------- -------- -------- ---------
Vanadium sold (mtV) 1,115 1,403 -20.5%
---------------- -------- -------- ---------
LMB Prices w.a. US$/ kgV 56.3 65.5 -13.9%
---------------- -------- -------- ---------
Revenue USD (millions) 74.3 81.2 -8.6%
---------------- -------- -------- ---------
EBITDA USD (millions) 42.3 42.4 0%
---------------- -------- -------- ---------
Production cash
costs USD/ kgV 19.2 20.2 -5%
---------------- -------- -------- ---------
While Vametco had a stellar financial performance in 2018
(Revenue of US$183 million and EBITDA of US$108 million), the
Company recognised that continued success requires improvement on
several fronts, not least, lowering Vametco's already low
production costs even further, by increasing throughputs and thus
production volumes, while also, ensuring a conducive working
environment with a motivated workforce.
Following a diagnostic exercise in Q4 2018, the Company
successfully implemented its operational improvement programme,
which is starting to bear fruit. This transformation programme will
complement the Company's capacity expansion project to increase
vanadium production at Vametco to more than 4,200 mtVp.a. The
diagnostic review undertaken in Q4 2018 identified a number of
initiatives to improve operational performance focusing on
stabilising and improving production, cost and capital efficiencies
and improving overall organisational health.
During this half the Company made several changes to the
management structure, which were designed to build greater depth in
the leadership team, improve coordination with the greater Bushveld
Group and create dedicated capacity to coordinate the development
and implementation of the many initiatives forming part of the
transformation programme. These changes included the appointment of
Ms Bertina Symonds into the role of General Manager, created from
combining the CEO and COO roles into one. Bertina brings over 20
years of mining and beneficiation experience, strong leadership and
a solid production and commercial background. William Steinberg,
former Vametco's Works Manager, was appointed Chief Transformation
officer, to drive the Operations Transformation programme, while Mr
Taff Williams, former Vametco's COO, was appointed Group Vanadium
Specialist to provide technical support to the Group's global
vanadium sales as well as supporting integration efforts for
Vanchem.
As a result of the initiatives undertaken in the first half of
2019, the Company has already seen improvements in all key areas,
being: a) production scheduling; b) vanadium grade in the kiln
feed; c) the hourly feed rate to the kiln; and d) recoveries, all
contributing to improved throughput at higher grades. This resulted
in material improvements in production, where the 742 mtV
Nitrovan(TM) produced in Q2 2019 was up 14 per cent on Q1 2019 and
up 18 per cent on the comparable quarter last year. The Company is
therefore pleased to report that Vametco remains on target to meet
its production guidance for this year of 2,800 mtV to 2,900
mtV.
Vametco sold 1,115 mtV Nitrovan (TM) , generating revenues of
US$74.3 million in the first half. Vametco's realised price is
based on the prior month's average price, which is higher than the
quoted LMB weighted average price for the period of US$56.3/kgV.
These higher realised prices offset the lower sales in the
period.
Vametco is in the lowest quartile on the cost curve for global
vanadium producers and, therefore, enjoys robust economics and
remains highly profitable even in weaker price environments. The
Company is pleased to report that Vametco generated an EBITDA of
US$42.3 million achieving an EBITDA margin of 57 per cent.
The Company had previously reported a first half unit cash cost
of US$17.40/kgV and an EBITDA of US$48.6 million for Vametco. These
figures have subsequently changed to US$19.20/kgV and US$42.3
million, as a result of intercompany costs introduced from January
2019 which should have been eliminated, however they were instead
incorrectly capitalised to the cost of inventory. The impact of the
adjustment increased the value of cost of sales as well as the
reduction in the inventory value of work in progress and finished
goods. Vametco's 2019 cash cost guidance remains unchanged at
US$18.90/kgV to US$19.50/kgV.
Looking forward, the continued implementation of initiatives
identified in the diagnostic review will support Vametco in
achieving a steady state production of 3,400 mtVp.a. during
2020.
The Phase III expansion programme, to be undertaken after the
above initiatives are completed, will focus on improving kiln
availability and increasing kiln and leach recoveries targeting
steady state production of 4,200 mtVp.a during 2022.
Health and safety
Health and safety remain a top priority for the Company. I am
pleased to report that Vametco recorded 5.376 million Fatality Free
Shifts by the end of June 2019.
Employee relations
Good relationships between management, the Company's employees
and the local communities in which we operate are an essential part
of any successful mining business. The Company is delighted to have
successfully completed wages and benefits negotiations with AMCU,
which represents approximately 70 per cent of Vametco's workforce.
The resulting three year agreement is an important step in
bolstering the Company's corporate social responsibility and
maintaining operational excellence. Pleasingly, the costs of the
agreement do not necessitate a revision to Vametco's 2019
production cost guidance.
Furthermore, the Company has embarked upon and progressed a
number of initiatives, including negotiating an Employee Share
Ownership Scheme ("ESOP") which is aimed at closely aligning the
interests of Vametco's workforce with its operational targets, as
well as an Employees' Financial Wellness Programme. Pending the
implementation of the ESOP, expected in 2020, Vametco will pay
during 2019 a special ESOP bonus calculated on the same basis as
the ESOP payment made for the period 1 July 2018 to 31 December
2018.
Environmental
Bushveld Minerals takes its environmental obligations and
responsibilities seriously. Several environmental initiatives
underway include construction of a new tailings dam to prevent
groundwater contamination, rehabilitation of current tailings dams
to eliminate fall-out dust. Furthermore, during the first half of
the year, Vametco embarked on the installation of an off-gas
scrubber to reduce dust emissions. The Company's environmental
objectives are to align the Company's Environmental Management
Systems with international standards, including those of the
International Finance Corporation and ISO 14001:2015 (an
international standard for environmental management systems). The
Company is targeting ISO 14001 certification by Q3 2020.
Brits (62.5% ownership)
The Brits Project is located in Portion 3 of the farm
Uitvalgrond 431 JQ, near the town of Brits in the North West
Province of South Africa and is directly along strike from the
Bushveld Vametco Alloys Mine (Bushveld-Vametco). The Company
announced a maiden JORC Mineral Resource on 21 June 2019 which
incorporated data from the 2018 drilling campaign comprising 26
drill holes over a total of 2,967m of diamond drilling.
Brits has an Indicated and Inferred Resource of 66.8 Mt (100 per
cent Gross Basis) at an average grade of 1.58 per cent V(2) O(5) in
magnetite for 175,400 tonnes of contained vanadium across the three
seams. Pleasingly, the Indicated Mineral Resource tonnages account
for 67 per cent of the total combined Mineral Resource and stand at
44.9Mt with an average grade of 1.59 per cent V(2) O(5) in
magnetite for 115,600 tonnes of contained vanadium across the three
seams. Brits provides the optionality for additional ore feed for
the Vametco plant, and, if required, feed for the Vanchem
plant.
Vanchem (conditional acquisition)
Meanwhile, Bushveld's strategy of growing its production
platform through targeted brownfield processing assets is also
bearing fruit. On 01 May 2019, the Company announced the
conditional acquisition of Vanchem, a primary vanadium processing
plant that includes three kilns, two ferrovanadium converters. Post
completion of a US$45 million refurbishment programme, Vanchem has
the potential to produce more than 4,200 mtVp.a. in the form of
vanadium pentoxide, vanadium trioxide, vanadium chemicals and
ferrovanadium. This acquisition, in addition to Vametco, sets the
platform for Bushveld to increase its overall vanadium production
to more than 8,400 mtVp.a. with a name plate capacity in excess of
10,000 mtVp.a.
The Company is delighted to have received unconditional approval
of the transaction by the Competition Commission of South Africa
and now look forward to completing the transaction on 31 October
2019, following the fulfilment of remaining conditions
precedent.
As communicated to the market, the Company expects to fund the
acquisition from its strong cash position as well as debt
facilities that it is in negotiations for.
Mokopane (64% ownership)
Mokopane is one of the world's largest primary vanadium
resources, with a 298 Mt JORC compliant resource and a weighted
average V(2) O(5) grade of 1.41 per cent in-situ and 1.75 per cent
in magnetite.
Mokopane is positioned to become a primary source of feedstock
for Vanchem, creating a fully integrated vanadium producing
business in a shorter time frame and at a lower cost, as opposed to
a standalone operation. The Company engaged MSA to undertake a
definitive feasibility study in September 2019 for the development
of the Mokopane mine. The expedited Mokopane development, as a
possible primary feedstock supply to Vanchem, does not remove the
optionality of supplying ore to other primary or secondary
producers worldwide, and/or to develop Mokopane into an integrated
mine and processing plant.
BUSHVELD ENERGY (86% ownership)
This sound, scalable and low cost production base gives Bushveld
a solid platform to implement its vertically integrated business
model, through the development of a downstream vanadium-based
energy storage business, Bushveld Energy. Bushveld Energy was
created to establish a significant position for VRFBs in the
stationary energy storage industry thereby achieving the twin
objectives of a) diversifying and strengthening the vanadium demand
profile and b) capturing a compelling commercial opportunity in a
multi-billion dollar industry.
During the first half of 2019, Bushveld Energy made significant
progress across all its key areas of focus - development of
electrolyte production capacity, deployment of its electrolyte
rental model, which is expected to play an important role in
promoting deployment of VRFBs, development of energy storage
mandates and developing a sound partnership model for VRFB
assembly/manufacturing.
The Company is encouraged to see greater coverage and a broader
and improved understanding by the market of stationary energy
storage and the Bushveld Energy business model. Moreover, the
combination of the Company's electrolyte rental model and
Bushveld's ability to scale up vanadium production will support
VRFBs becoming a long-term feature of energy grids globally.
GROWTH STRATEGY
Strategic acquisitions are a key part of the Company's growth
plans, as demonstrated by the successful acquisition of Vametco and
soon to be completed acquisition of Vanchem.
Following the acquisition of Vanchem, Bushveld's growth strategy
will focus on realising the potential of its assets, focusing on
production throughput, cost control and realising the downstream
opportunities under development through Bushveld Energy. These
opportunities will see the Company continue investing across the
vanadium supply chain individually or through partnerships.
As previously communicated, the Company's investment proposition
remains primarily capital growth on the back of the Company
delivering on its ambitious growth targets. The Company is
nevertheless confident that when fully implemented, its vertically
integrated platform will generate sufficient cash to return some to
its shareholders through dividends.
VANADIUM MARKET
The Company believes that the vanadium market fundamentals
remain attractive. Demand in steel making is expected to continue
growing, notwithstanding a subdued steel market outlook in the
medium term. This demand increase is driven by growing intensity of
use of vanadium in steel, which is in turn driven largely by new
regulations introduced in China. Meanwhile the momentum behind
energy storage applications of vanadium continues to grow as the
energy transition towards cleaner energy sources takes root.
Vanadium prices have seen a 50 per cent fall during the first
half of 2019. The Company believes that the price fall has been
heavily influenced by largely temporary factors and retains its
positive outlook on the vanadium market going forward. These
factors include:
China's rebar standard
The new rebar standards introduced in China in November 2018
were expected, when fully complemented, to see an uplift in Chinese
vanadium demand of approximately 30 per cent. This uplift has,
however, not been realised, mostly due to a lacklustre enforcement
regime for the standards which effectively provided a "tolerance
window" for the mills in relation to the new standard. A
nation-wide inspection launched in July and expected to be
completed in September is anticipated to drive greater compliance
with the new standards and in turn support demand growth going
forward.
Substitution
Increased niobium imports into China suggest greater
substitution of vanadium in rebar when vanadium prices were over
US$100/kgV. The majority of the substitution is price elastic. At
current vanadium prices the incentive to substitute niobium with
ferrovanadium is significantly diminished, as vanadium continues to
have several advantages over niobium in steel applications.
Opportunistic producers
Abnormally high vanadium prices such as those seen in November
2018, will always encourage new supply, particularly opportunistic
swing supply, such as secondary production or stone coal production
in China. Furthermore, the increased global steel production during
2019, and the return of near US$100/t prices for iron ore amid a
tight iron ore supply/demand balance as a result of the supply
disruptions in Brazil, brought back to life previously marginal
magnetite mines from China, increasing vanadium supply via
co-production. As steel margins normalise and iron ore market
returns to a balance, the Company excepts a reduction in vanadium
production from co-producers.
The medium term outlook for supply, however, remains
constrained. This outlook is informed by the significant hurdles to
greenfield vanadium supply growth, while co-producers capacity is
capped resulting in a modest outlook for sustainable new supply
growth going forward.
Outlook
While the medium to long term outlook for vanadium remains
positive, the Company's low cost curve position means that it is
well positioned to address the recent weakness in commodity prices.
Bushveld Minerals' high-grade, long-life and low cost assets put
the Company in a strong position throughout the commodity cycle
(year to date average ferrovanadium price of US$48.2/kgV[1]).
Moreover, the Company's vertical integration strategy provides a
natural hedge to vanadium price volatility as well as a diversified
revenue stream. The normalisation of the vanadium price is
increasing confidence that VRFBs will become a long-term global
feature of energy grids.
[1]London Metal Bulletin year to date average as at 20 September
2019.
FINANCIAL PERFORMANCE
In this report, Bushveld Minerals is pleased to report a strong
set of financial results for the first half of the year,
underpinned by operational improvements and effective cost control
initiatives.
The Group generated revenue of US$78.0 million (H1 2018: US$83.7
million), representing a decrease of seven per cent from the prior
corresponding period. The lower revenue reflects lower sales
volumes.
The Group generated an EBITDA of US$41.0 million (H1 2018:
US$42.8 million), representing a decrease of four per cent from the
prior corresponding period, however the EBITDA margin was higher at
53 per cent (H1 2018: 51 per cent), as a result of the Group
reducing its operating costs at Vametco.
Cash generated by the operating activities of the business was
US$34.7 million (H1 2018 US$21.4 million). The investing activities
of the business resulted in an outflow of US$11.4 million, with the
majority relating to the initial US$6.8 million paid as part of the
aggregate cash consideration of US$68 million for the Vanchem
acquisition. The cash and cash equivalent balance for the six
months ended 30 June 2019 is US$66.1 million (31 December 2018:
US$42.0 million).
ORGANISATIONAL AND ADVISER CHANGES
The Company is pleased to announce the appointment of Peel Hunt
LLP as joint corporate broker to the Company with immediate effect.
SP Angel Corporate Finance LLP remains the Company's nominated
adviser and joint corporate broker, along with BMO Capital Markets
Limited, which remains joint corporate broker.
Finally, I would like to make a special mention of Geoff
Sproule, Bushveld's long serving finance director, who will be
stepping down with effect from 30 September 2019 and will
simultaneously resign from the board of directors of the Company.
Geoff has been an integral part of the team that has helped
Bushveld Minerals achieve so much since starting out as a junior
explorer and rapidly transforming into the significant vanadium
player it is now. I wish him all the best.
The Company will be announcing the new finance director this
week, the management team and the board strongly believe fulfils
all the criteria that Bushveld Minerals requires for the next phase
of its growth.
It has been a productive year to date and the Company is
steadily executing its strategy to grow its low-cost production
base and build up the Bushveld Energy business. I look forward to
the second half during which Bushveld Minerals will keep
strengthening its position as a leading primary vanadium producer,
offering a diverse range of products for the steel, chemicals and
energy storage markets.
I thank you for all of your support.
Fortune Mojapelo
Consolidated Income Statement
For the six months ended 30 June 2019
6 Months ended 6 Months ended Year ended
30 June 2019 30 June 2018 31 December
2018
(unaudited) (unaudited) (audited)
$ $ $
Continuing operations
Revenue 78,001,182 83,744,182 192,089,845
Cost of sales (22,879,458) (32,421,693) (65,273,543)
Gross profit 55,121,724 51,322,489 126,816,302
Other operating income 412,905 4,648,360 7,420,109
Selling and distribution
costs (8,451,397) (5,168,892) (10,661,706)
Other mine operating costs (1,565,719) (1,098,381) (2,508,971)
Idle plant costs (284,266) (546,623) (2,688,422)
Administration expenses (7,687,433) (6,969,320) (23,202,234)
Operating profit 37,545,814 42,187,632 95,175,078
Finance income 2,679,963 1,097,335 1,987,333
(1,448,801) (1,819,397) (1,233,406)
Finance costs - (3,232,425)
Share based payment economic
empowerment transaction -
Movement in earnout estimate 5,912,435 (6,091,514)
Profit before tax 44,689,411 41,465,580 86,605,066
Taxation (13,877,341) (12,936,872) (37,604,907)
Profit after taxation 30,812,070 28,528,709 49,000,159
Attributable to:
Owners of the parent 21,542,145 15,108,930 30,215,509
Non-controlling interests 9,269,925 13,419,779 18,784,650
============== ============== ============
Profit per ordinary share (note
4)
Basic and diluted profit per share
(in cents) 1.92 1.57 2.9
All results relate to continuing activities.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2019
6 Months ended 6 Months ended Year ended
30 June 2019 30 June 2018 31 December
2018
$ $ $
(unaudited) (unaudited) (audited)
Profit for the period
/ year 30,812,070 28,528,709 49,000,159
Other comprehensive
income, net of tax:
Items that may be subsequently
reclassified to profit
or loss:
Currency translation
differences 3,687,039 (10,787,074) (13,715,270)
Available-for-sale financial
assets - net change
in fair value (2,679) - 659,007
Other fair value movements - 276,781 21,796
Total comprehensive
income for the period
/ year 34,496,430 18,018,416 35,965,692
=============== =================== =================
Attributable to:
Owners of the parent 24,267,874 10,648,883 21,941,346
Non-controlling interests 10,228,556 7,369,533 14,024,346
Total comprehensive
income for the period
/ year 34,496,430 18,018,416 35,965,692
=============== =================== =================
Consolidated Statement of Financial Position
As at 30 June 2019
Company number: 54506
30 June 31 December
2018
2019 $
Note $
(unaudited) (audited)
Assets
Non-current assets
Intangible
assets:
exploration and
evaluation 5 60,629,669 57,150,425
Property, plant and
equipment 6 58,647,894 47,881,162
Investment
properties 2,868,332 2,816,007
Deferred tax asset 3,646,004 3,004,141
Total Non-Current
assets 125,791,899 110,851,735
Current assets
Inventories 7 24,358,804 17,193,018
Trade and other
receivables 8 17,274,273 32,586,185
Restricted
investment 6,200,384 5,388,953
Income tax
receivable 2,538,283 251,382
Available-for-sale
financial assets 2,308,594 2,311,272
Cash and cash
equivalents 9 66,130,719 42,019,123
Total Current
assets 118,811,057 99,749,933
Total assets 244,602,956 210,601,668
=========== ===========
Equity and
liabilities
Share capital 12 14,921,079 14,921,079
Share premium 12 101,003,256 101,003,256
Accumulated profit 42,989,282 21,447,137
Foreign exchange
translation
reserve (4,344,979) (7,073,387)
Fair value reserve (374,158) (371,479)
----------- -----------
Equity
attributable
to owners of the
parent 154,194,480 129,926,606
Non-controlling
interests 39,941,002 29,712,446
Total Equity 194,135,482 159,639,052
Non-Current
liabilities
Post-retirement
medical
liability 2,440,278 2,377,737
Environmental
rehabilitation
liability 6,918,762 6,632,60
Deferred
consideration 11,441,175 17,427,512
Borrowings - -
Lease liability -
IFRS 16 11 4,524,958 -
Total Non-Current
liabilities 25,325,173 26,437,856
Current liabilities
Trade and other
payables 10 20,543,207 20,203,795
Provisions 3,734,243 4,320,965
Leases liability -
IFRS 16 11 864,851 -
Total Current
liabilities 25,142,301 24,524,760
Total Equity and
liabilities 244,602,956 210,601,668
=========== ===========
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2019 Attributable to owners of
the parent company
Foreign
Warrant exchange Non-
Share Share Accumulated reserve translation Fair value controlling Total
capital premium deficit reserve reserve Total interests equity
$ $ $ $ $ $ $ $ $
Total equity at 1 January
2018 (audited) 11,817,573 69,222,661 (13,121,418) 2,113,866 1,881,579 (1,052,282) 70,861,979 36,371,168 107,233,147
---------------------------- ---------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ------------
Profit for the period - - 15,108,93 - - - 15,108,930 13,419,779 28,528,709
Other comprehensive income:
Fair value movements on
investments 276,782 276,782 276,782
Currency translation
differences - - - - (4,736,828) - (4,736,828) (6,050,246) (10,787,074)
Total comprehensive income
for the period - - 15,108,930 - (4,736,828) 276,782 10,648,883 7,369,533 18,081,416
Transactions with owners:
Grant of warrants - - - 849,220 - - 849,220 - 849,220
Issue of shares 2,700,150 23,714,999 - - - - 26,415,149 - 26,415,149
Share issue expenses - (1,080,161) - - - - (1,080,161) - (1,080,161)
Non-controlling interest - - - - - - - - -
Total equity at 30 June
2018 (unaudited) 14,517,723 91,857,499 1,987,512 2,963,086 (2,855,249) (775,500) 107,695,071 43,740,701 151,435,771
---------------------------- ---------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ------------
Profit for the period - - 15,106,579 - - - 15,106,579 5,364,871 20,471,450
Other comprehensive income:
Fair value movement on
investments - - - - - 404,021 404,021 - 404,021
Currency translation
differences - - - - (4,218,138) - (4,218,138) 1,289,942 (2,928,196)
---------------------------- ---------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ------------
Total comprehensive income
for the period - - 15,106,579 - (4,218,138) 404,021 11,292,463 6,654,813 17,947,276
Transactions with owners: - - - - - - -
Grant of warrants - - - (849,220) - - (849,220) - (849,220)
Exercise of warrants 547,453 4,232,445 - - - - 4,779,898 - 4,779,898
Issue of shares (144,097) 4,913,312 - - - - 4,769,215 - 4,769,215
Reserve transfer - - 2,113,866 (2,113,866) - - - - -
Change in non-controlling
interest - - 2,239,180 - - - 2,239,180 (19,739,180) (17,500,000)
Dividends paid to
non-controlling
interest - - - - - - - (943,888) (943,888)
---------------------------- ---------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ------------
Total equity at 31 December
2018
(audited) 14,921,079 101,003,256 21,447,137 - (7,073,387) (371,479) 129,926,606 29,712,446 159,639,052
Profit for the period - - 21,542,145 - - - 21,542,145 9,269,925 30,812,070
Other comprehensive income:
Fair value movement on
investments - - - - - (2,679) (2,679) - (2,679)
Currency translation
differences - - - - 2,728,407 - 2,728,407 958,630 3,687,037
Total comprehensive income
for the period - - 21,542,145 - 2,728,407 (2,679) 24,267,873 10,228,556 34,496,429
Transactions with owners:
Issue of shares - - - - - - - - -
Share issue costs - - - - - - - - -
Non-controlling interest - - - - - - - - -
Total equity at 30 June
2019 (unaudited) 14,921,079 101,003,256 42,989,282 - (4,344,979) (374,158) 154,194,480 39,941,002 194,135,482
---------------------------- ---------- ----------- ------------ ----------- ----------- ----------- ----------- ------------ ------------
Consolidated Statement of Cash Flows
For the six months ended 30 June 2019
6 Months ended 6 Months ended Year ended
30 June 2019 30 June 2018 31 December
2018
$ $ $
(unaudited) (unaudited) (audited)
Profit before taxation 44,689,412 41,465,580 86,605,066
Adjustments for:
Depreciation
property, plant
and equipment 3,483,155 624,093 6,039,339
Fair value
economic
empowerment
transaction - - 3,232,425
Movement in
earnout estimate (5,912,435) - 6,091,514
Finance income (2,679,963) (1,097,335) (1,987,333)
Finance costs 1,448,801 1,819,387 1,233,406
Changes in
working capital 4,803,162 (8,457,041) (25,350,569)
Income taxes paid (11,147,542) (12,936,871) (30,923,733)
Net cash
generated from
operating
activities 34,684,591 21,417,813 44,940,115
------------------ ----------------------- ---------------------
Cash flows from investing
activities
Finance income 2,679,963 1,097,335 1,987,333
Purchase of exploration
and evaluation assets (895,402) (20,567) (1,553,219)
Purchase of property,
plant
and equipment (5,807,169) (6,055,346) (11,205,702)
Acquisition of
non-controlling
interest - - (17,500,000)
Payment of Deferred
Consideration (600,000) - -
Payment in advance for
acquisition
of Vanchem (6,800,000) - -
Net cash (used
in)/generated
from investing activities (11,422,608) (4,978,578) (28,271,588)
------------------ ----------------------- ---------------------
Cash flows from financing
activities
Finance costs (1,448,801) (1,819,387) -
Lease payments (305,688) - -
Net proceeds of capital
raise - 20,615,493 19,006,177
Net proceeds from issue
of shares and warrants - 1,578,851 4,139,825
Net repayments of other
borrowings - (6,902,380) (6,907,035)
------------------ ----------------------- ---------------------
Net cash (used
in)/generated
from financing activities (1,754,489) 13,472,577 16,238,967
------------------ ----------------------- ---------------------
Net increase in cash and
cash equivalents 21,507,494 29,911,812 32,907,494
Cash and cash equivalents
at the beginning of the
period 42,019,123 9,739,632 9,739,632
Effect of foreign
exchange
rates 2,604,102 (4,333 831) (628,003)
Cash and cash
equivalents
at end of the
period 66,130,719 35,317,613 42,019,123
================== ======================= =================
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's reporting date is 31 December. These unaudited
interim financial statements are for the six months ended 30 June
2019 with comparatives to 30 June 2018. The twelve months to 31
December 2018 are audited.
2. Basis of preparation
The results presented in this report are unaudited and they have
been prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards ('IFRS")
as adopted by the EU that are expected to be applicable to the next
set of financial statements and on the basis of the accounting
policies to be used in those financial statements.
The interim financial information does not include all of the
information required for full annual financial statements and
accordingly, whilst the interim financial information has been
prepared in accordance with the recognition and measurement
principles of IFRS, it cannot be construed as being in full
compliance with IFRS. The financial information contained in this
announcement does not constitute statutory accounts as defined by
the Companies (Guernsey) Law 2008.
On the instructions of the directors, the Group's auditor has
performed specific procedures in accordance with International
Standard on Related Services ('ISRS') 4400 'Engagements to Perform
Agreed-upon Procedures Regarding Financial Information', on the
financial information, solely for the purpose of providing a report
of factual findings in respect of the financial information to the
directors. The specific procedures performed do not constitute
either an audit or a review.
The audited financial information for the period ended 31
December 2018 is based on the statutory accounts for the financial
period ended 31 December 2018 The auditors reported on those
accounts: their report was unqualified and did not contain
statements where the auditor is required to report by
exception.
IFRS 16 has been adopted in the interim financial statements and
the impact is disclosed in note 11.
3. 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. 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 are further influenced by
changing technologies, political, environmental, safety, business
and statutory considerations.
ii. 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.
iii. Post-retirement employee benefits
Post-retirement medical aid liabilities are provided for certain
existing employees. 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.
iv. 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. 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.
v. Revaluation of investment properties
The group carries its residential investment properties at fair
value. The group engaged an independent valuation specialist to
assess the fair value as at 31 December 2018 for residential
properties. For residential properties, it measures land and
buildings at revalued amounts with changes in fair value being
recognised in other comprehensive income. Land and buildings were
valued by reference to market-based evidence, using comparable
prices adjusted for specific market factors such as nature,
location and condition of the property.
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 30 June 2019 based on planned future
development of the projects and current and forecast commodity
prices.
4. Profit/Loss per share
From continuing operations
The calculation of a basic profit per share of 1.92 cents (year
ended 31 December 2018: 2.9 cents), is calculated using the total
profit for the six months attributable to the owners of the company
of $21,542,145 (year ended 31 December 2018: $30,215,509) and the
weighted average number of shares in issue during the six months of
1,119,727,953 (June 2018: 1,043,907,922). The dilutive effect of
other shares in issue would be immaterial to the profit per
share.
5. Intangible exploration and evaluation assets
Vanadium
and Iron Coal Total
ore $ $
$
As at 1 January 2018 60,862,691 - 60,862,691
Exchange differences (5,265,485) - (5,265,485)
Additions 41,861 1,511,358 1,553,219
As at 31 December 2018
(audited) 55,639,067 1,511,358 57,150,425
Additions to at June 2019 741,867 153,535 895,402
Exchange differences 2,583,842 - 2,583,842
-------------------------------- ------------ ------------ ------------
As at 30 June 2019 (unaudited) 58,964,776 1,664,893 60,629,669
-------------------------------- ------------ ------------ ------------
Vanadium and iron ore
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 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
Coal
Coal Exploration licences have been issued to Coal Mining
Madagascar SARL a 99% subsidiary of Lemur Investments Limited.
The exploration is in South West Madagascar covering 11
concession blocks in the Imaloto Coal basin known as the Imaloto
Coal Project and Extension.
6. Property, plant and equipment
Buildings Plant and Motor Decommissioning Assets under Right Total
and other machinery vehicles assets construction of use
improvements furniture assets
and
equipment
$ $ $ $ $ $ $
Cost at 1
January 2018 610,789 42,147,393 28,670 1,507,013 934,379 - 45,228,234
Disposals - (1,180,001) (30,017) - - - (1,210,018)
Additions - - - 271,518 10,934,184 - 11,205,702
Asset under
construction
capitalised 730,388 3,310,376 246,498 - (4,287,262) - -
Exchange
differences (82,128) (1,398,908) (3,856) (202,636) (125,639) - (1,813,167)
----------------------- -------------------- -------------------- -------------------------- ----------------------- ----------------- -----------------------------------
At 31
December
2018
(audited) 1,259,049 42,878,860 241,295 1,575,895 7,455,662 - 53,410,751
======================= ==================== ==================== ========================== ======================= ================= ===================================
Additions to
30 June
2019 - 26,991 65,056 - 5,715,122 5,396,776 11,203,944
Disposals - - (1,337) - - - (1,337)
Assets under - - - - - - -
construction
capitalised
Exchange
differences 64,761 2,205,544 12,411 81,059 384,773 298,721 3,047,270
======================= ==================== ==================== ========================== ======================= ================= ===================================
At 30 June
2019
(unaudited) 1,323,810 45,111,395 317,425 1,656,954 13,555,557 5,695,497 67,660,638
======================= ==================== ==================== ========================== ======================= ================= ===================================
Depreciation
1 January
2018 - 809,055 - - - - 809,055
Depreciation
charge for
the year 237,758 5,508,585 209,890 83,106 - - 6,039,339
Disposals - (1,180,001) (30,017) - - - (1,210,018)
Exchange
differences - (108,787) - - - - (108,787)
----------------------- -------------------- -------------------- -------------------------- ----------------------- ----------------- -----------------------------------
At 31
December
2018
(audited) 237,758 5,028,852 179,873 83,106 - - 5,529,589
======================= ==================== ==================== ========================== ======================= ================= ===================================
Charge for
the six
months
to 30 June
2019 282,011 2,842,373 53,083 - - 305,688 3,483,155
Exchange - - - - - - -
differences
----------------------- -------------------- -------------------- -------------------------- ----------------------- ----------------- -----------------------------------
At 30 June
2019
(unaudited) 519,769 7,871,225 232,956 83,106 - 305,688 9,012,744
======================= ==================== ==================== ========================== ======================= ================= ===================================
Net book
value 31
December
2018
(audited) 1,021,291 37,850,008 61,422 1,492,789 7,455,662 - 47,881,162
======================= ==================== ==================== ========================== ======================= ================= ===================================
Net book
value 30
June
2019
(unaudited) 804,041 37,240,170 84,469 1,573,848 13,555,557 5,389,809 58,647,894
======================= ==================== ==================== ========================== ======================= ================= ===================================
7. Inventories
30 June 2019 31 December
2018
$ $
Unaudited Audited
Finished goods 11,617,574 6,094,274
Work in progress 6,149,775 4,489,189
Raw materials 1,888,247 2,157,296
Consumable stores 4,703,208 4,452,259
----------------- ----------------
Inventories 24,358,804 17,193,018
================= ==================
The amount of write-down of inventories due to net realisable
value provision requirement is nil.
8. Trade and other receivables
30 June 2019 31 December 2018
$ $
Unaudited Audited
Trade receivables 7,971,371 27,454,540
Other receivables 9,302,902 5,131,645
--------------------- ---------------------
Trade and other
receivables 17,274,273 32,586,185
===================== =====================
Trade receivables are non-interest bearing and are generally on
15 - 90-day terms. At 30 June 2019 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 on the basis that expected credit losses are nil
9. Cash and cash equivalents
30 June 2019 31 December
2018
$ $
(unaudited) (audited)
Cash at hand and
in bank 66,130,719 42,019,123
===================== ================
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.
10. Trade and other payables
30 June 2019 31 December 2018
$ $
(unaudited) (audited)
Trade payables 19,903,313 12,140,084
Accruals 639,894 8,063,711
20,543,207 20,203,795
================= =====================
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.
11. IFRS 16 - Leases
The Group has applied IFRS 16 for the first time in the period.
IFRS 16 introduces new or amended requirements with respect to
lease accounting. It introduces significant changes to lessee
accounting by removing the distinction between operating and
finance leases and requiring the recognition of a right-of-use
asset and a lease liability at the lease commencement for all
leases, except for short-term leases and leases of low value
assets.
This note explains the impact of the adoption of IFRS 16
'Leases' on the Group's condensed consolidated interim report and
discloses the new accounting policies that have been applied from 1
January 2019. The Group has adopted IFRS 16 using the modified
retrospective approach from 1 January 2019 and has not restated
comparatives for the 2018 reporting period, as permitted under the
specific transitional provisions in the standard. The
reclassifications and adjustments arising from the new leasing
rules are therefore recognised in the opening balance sheet on 1
January 2019.
Applying IFRS 16, for all leases (except as noted below), the
Group:
a) recognises right-of-use assets and lease liabilities in the
Statement of Financial Position, initially measured at the present
value of future lease payments;
b) recognises depreciation of right-of-use assets and interest
on lease liabilities in the Income Statement; and
c) separates the total amount of cash paid into a principal
portion (presented within financing activities) and interest
(presented within operating activities) in the Statement of Cash
Flows.
Lease incentives (e.g. free rent period) are recognised as part
of the measurement of the right-of-use assets and lease liabilities
whereas under IAS 17 they resulted in the recognition of a lease
incentive liability, amortised as a reduction of rental expense on
a straight-line basis. Under IFRS 16, right-of-use assets are
tested for impairment in accordance with IAS 36 Impairment of
Assets. This replaces the previous requirement to recognise a
provision for onerous lease contracts. For short--term leases
(lease term of 12 months or less) and leases of low-value assets
(such as personal computers and office furniture), the Group has
opted to recognise a lease expense on a straight-line basis as
permitted by IFRS 16. This expense is presented within net
operating expenses in the Income Statement.
The Group assesses whether a contract is or contains a lease, at
inception of a contract. The Group recognises a right-of-use asset
and a corresponding lease liability with respect to all lease
agreements in which it is the lessee, except for short-term leases
(defined as leases with a lease term of 12 months or less) and
leases of low value assets. For these leases, the Group recognises
the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits from
the leased asset are consumed.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the Group uses its incremental
borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
-- fixed lease payments (including in-substance fixed payments),
less any lease incentives;
-- variable lease payments that depend on an index or rate,
initially measured using the index or rate at the commencement
date;
-- the amount expected to be payable by the lessee under
residual value guarantees;
-- the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
-- payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the lease.
The lease liability is presented as a separate line in the
Statement of Financial Position. The lease liability is
subsequently measured by increasing the carrying amount to reflect
interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease
payments made.
The Group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
-- the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
-- the lease payments change due to changes in an index or rate
or a change in expected payment under a guaranteed residual value,
in which cases the lease liability is remeasured by discounting the
revised lease payments using the initial discount rate (unless the
lease payments change is due to a change in a floating interest
rate, in which case a revised discount rate is used).
-- a lease contract is modified and the lease modification is
not accounted for as a separate lease, in which case the lease
liability is remeasured by discounting the revised lease payments
using a revised discount rate.
The Group did not make any such adjustments during the periods
presented.
The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before the
commencement day and any initial direct costs.
They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle
and remove a leased asset, restore the site on which it is located
or restore the underlying asset to the condition required by the
terms and conditions of the lease, a provision is recognised and
measured under IAS 37. The costs are included in the related
right-of-use asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over
the useful life of the underlying asset. The depreciation starts at
the commencement date of the lease. The right-of-use assets are
presented as a separate line in the Statement of Financial
Position. The Group applies IAS 36 Impairment of Assets to
determine whether a right-of-use asset is impaired and accounts for
any identified impairment loss.
A reconciliation of total operating lease commitments to the
IFRS 16 lease liability at 30 June 2019 is as follows:
$
Operating lease commitments disclosed at 31 December 2018
10,709,178
Less: short term leases recognised on a straight-line basis as
expense (191,010)
Less: discount effect using incremental borrowing rate
(5,121,392)
Lease liability recognised at 1 January 2019 5,396,776
Of which:
Current lease liabilities 724,944
Non-current lease liabilities 4,671,832
Total 5,396,776
In addition to the recognition of right-of-use assets, lease
liabilities and adjustments to net operating expenses for operating
lease costs and depreciation coupled with adjustments to finance
expenses and have been remeasured under the new standard.
12. Share capital and share premium
Share Number Share Capital Share Total share
premium capital and
$ $ premium
$
Balance brought down 1 January 2018
(Audited) 875,894,905 11,817,573 69,222,661 81,040,234
Conversion of convertible bonds 32,499,147 413,649 2,991,090 3,404,739
Warrants exercised 33,737,419 429,409 3,710,416 4,139,825
Shares issued 152,749,172 1,944,191 18,080,981 20,025,172
Shares issued to directors and staff 24,847,310 316,257 8,017,103 8,333,360
Share issue expenses - - (1,018,995) (1,018,995)
Balance at 31 December 2018 (Audited) 1,119,727,953 14,921,079 101,003,256 115,924,335
-------------- --------------- ----------- -------------
Balance brought down 1 January 2019
(Audited) 1,119,727,953 14,921,079 101,003,256 115,924,335
Balance at 30 June 2019 (unaudited) 1,119,727,953 14,921,079 101,003,256 115,924,335
------------- ---------- ----------- -----------
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 30 June 2019 the Company owns 670,000 (31 December
2018: 670,000) treasury shares with a nominal value of 1 penny.
13. Events after the reporting period
On 1 May 2019, Bushveld announced a conditional agreement to
acquire the primary vanadium processing assets of Vanchem Vanadium
plant, the ferrovanadium production business of SAJV as a going
concern, and a 100 per cent of the outstanding shares of Ivanti
Resources (Pty) Limited, a subsidiary of Duferco Participations
Holding S.A, (collectively "Vanchem").
On 28 August 2019, it received approval from the Competition
Commission of South Africa to acquire the Vanchem assets, without
conditions. The transaction remains on track to be completed on 31
October 2019 and we expect the outstanding conditions precedent,
being the cession of specific commercial agreements and South
African Reserve Bank approval, to be satisfied.
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
IR EASNEDDENEEF
(END) Dow Jones Newswires
September 30, 2019 02:03 ET (06:03 GMT)
Bushveld Minerals (AQSE:BMN.GB)
Historical Stock Chart
From May 2024 to Jun 2024
Bushveld Minerals (AQSE:BMN.GB)
Historical Stock Chart
From Jun 2023 to Jun 2024
