TIDMBMN
RNS Number : 5645A
Bushveld Minerals Limited
30 September 2020
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 2020
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Unaudited Interim Results for the Six Months ended 30 June
2020
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer and energy storage provider, with
ownership of high-grade assets in South Africa, ("Bushveld"), is
pleased to announce its half year unaudited results for the six
months ended 30 June 2020.
Key Highlights
Financial highlights
-- Revenue of US$43.1 million (H1 2019: US$78.0 million),
impacted by the continuing lower pricing environment as well as
lost production due to the Covid-19 pandemic.
- Total lost revenue due to Covid-19 of US$9.2 million(1) , and
costs of US$0.4 million associated with hygiene, screening,
protective and preventative measurements in place.
-- Net cash used in investing activities reduced to US$5.0
million (H1 2019: US$11.4 million), in order to conserve cash
during a period of supressed vanadium prices and uncertainty
surrounding the impact of Covid-19.
-- Cash and cash equivalent of US$24.6 million as at 30 June
2020, included revolving credit facility of ZAR125 million and term
loan of ZAR250 million (31 December 2019: US$34.0 million included
term loan of ZAR250 million).
-- The London Metal Bulletin ("LMB") Ferrovanadium price
averaged US$25.70/kgV in H1 2020, 54 per cent lower than H1 2019
(H1 2019: US$56.30/kgV) and four per cent below H2 2019 (H2 2019:
US$26.90/kgV). H2 2020 year to date average LMB Ferrovanadium price
of US$25.19/kgV, as at 25 September 2020. The LMB spot price at 25
September 2020 is US$24.73/kgV.
1. Total revenue loss of US$9.2 million estimated as 380mtV
multiplied by the Group's average realised sales price of
US$24.20.
Table 1: Group financial and operational highlights
In US$ million unless otherwise specified. Six Months Ended
--------------------------------------------
June 30, June 30, %
2020 2019 change
-------------------------------------------- --------- --------- --------
FINANCIAL HIGHLIGHTS
Revenue 43.1 78.0 -45%
EBITDA (1.0) 41.0 -102%
Depreciation (8.9) (3.5) 154%
Operating (Loss) / Profit (9.9) 37.5 -126%
(Loss) / Profit Before Tax (10.7) 44.7 -124%
Basic (Loss) / Earning per share (US
cents) (0.92) 1.92 -148%
Net cash (used in) / from operating
activities (2.7) 34.7 -108%
Net cash used in investing activities (5.0) (11.4) -56%
-------------------------------------------- --------- --------- --------
OPERATIONAL HIGHLIGHTS
Group Production (mtV) 1,649 1,392 18%
Group Sales (mtV) 1,765 1,115 58%
Sales to China (%) 18.0 3.0 500%
Group average realised sales price
(US$/kgV) 24.20 70.00 -65%
L.M.B. average Ferrovanadium price
(US$/kgV) 25.70 56.30 -54%
Operational highlights
-- Vametco and Vanchem recorded zero fatalities.
-- Vametco's Total Injury Frequency Rate ("TIFR") of 18.80, is
an 11 per cent improvement relative to H1 2019 (H1 2019: 21.16).
Vanchem recorded a TIFR of 0.009 for the period.
-- As at 30 August 2020 the Group had 36 Covid-19 positive
cases, all of whom have recovered and successfully returned to
work.
-- No Covid-19 related stoppages since ramping up to
pre-lockdown production levels in May 2020, demonstrating the
effectiveness of our stringent Covid-19 protocols within the
operations.
Bushveld Vanadium
-- Group production for H1 2020 of 1,649 mtV (100 per cent
basis) was 18 per cent higher than H1 2019 (H1 2019: 1,392 mtV), as
a result of the inclusion of the production from Vanchem.
- Estimated production losses of approximately 380 mtV were
directly related to the Covid-19 nationwide lockdown.
- Vametco production of 1,218 mtV (H1 2019: 1,392 mtV) and
production cash cost (C1)(1) US$17.20/kgV (H1 2019:
US$19.30/kgV).
- Vanchem production of 431 mtV and production cash cost (C1)(1)
US$16.40/kgV. Vanchem achieved a record monthly production of 119
mtV in May 2020 and 97 mtV in June 2020.
-- Group sales of 1,765 mtV was 58 per cent higher than H1 2019
(H1 2019: 1,115 mtV), as a result of higher sales at Vametco and
the inclusion of sales from Vanchem.
-- Robust vanadium demand and higher buying price from China
resulted in sales to China increasing to 18 per cent of Group sales
(H1 2019: 3 per cent).
1. Excludes depreciation, royalties and selling, general &
administrative expenses and cost associated with Covid-19.
Bushveld Energy
-- Electrolyte
- Received environmental authorisation for construction of the
vanadium electrolyte production facility, in partnership with the
Industrial Development Corporation ("IDC").
- Appointed an Engineering, Procurement, and Construction
("EPC") company, which commenced the engineering phase of the
vanadium electrolyte plant.
- The South African Department of Trade Industry and Competition
("DTIC") approved the electrolyte plant project.
-- Investments
- Acquired an 8.71 per cent shareholding in Invinity Energy
Systems plc ("Invinity") the entity created by the merger of Avalon
Battery Corporation ("Avalon") and redT energy plc ("redT"), in
line with its strategy of partnering with Vanadium Redox Flow
Batteries ("VRFB") companies.
-- Deployment
- Signed a surface sublease agreement and the power purchase
agreement ("PPA") for the Vametco mini-grid, and obtained a debt
financing term-sheet from a French Development Bank, to be
underwritten by a South African institution.
Outlook and Guidance
-- In our H1 Operational Update, announced in early September
2020, we revised 2020 Group production guidance to between 3,660
mtV and 3,950 mtV, subject to no further Covid-19 related
disruptions. This production guidance is between 25 per cent and 35
per cent higher than 2019 Group production (2019: 2,931 mtV).
- Vametco guidance is between 2,700 mtV and 2,850 mtV and
production cash cost (C1) guidance is between ZAR295/kgV and
ZAR300/kgV (US$17.50/kgV and US$17.90/kgV).
- Vanchem is expected to meet the lower end of its previously
announced production guidance of between 960 mtV and 1,100 mtV and
the higher end of its production cash cost guidance of between
ZAR310/kgV and ZAR320/kgV (US$18.40/kgV and US$19.00/kgV).
-- The Kiln-Off Gas Project was commissioned in September. This
will enable Vametco to comply with environmental regulations and
enable the increase in kiln feed throughput.
-- Demand from China for vanadium has recovered as result of
increased infrastructure spending and compliance with rebar
standards. Demand from Europe is expected to increase as a result
of stimulus programmes. Outlook for the rest of the year remains
uncertain due to the muted vanadium price, uncertainty surrounding
the global economic recovery, longer lead time for delivery to
customers, and increased number of non-Chinese producers shipping
excess production to China in order to benefit from the higher spot
prices.
Events since 30 June 2020
-- Today, in a separate release, Bushveld Minerals announced a
conditional long-term production financing agreement ("PFA") of
US$30 million with mining-focused investment business Orion Mine
Finance ("Orion"), primarily to finance the Vametco phase III
expansion project and debt repayment. Drawdown is subject to
certain conditions precedent, as set out in this morning's
announcement.
-- Under a separate investment agreement, Orion has also
conditionally agreed to subscribe for a minimum of US$10 million,
and a maximum of US$20 million of convertible loan notes under a
US$35 million convertible loan notes instrument (the "Instrument").
The Company intends to seek other subscribers for the balance of
the total. The Instrument's proceeds will go towards the first
phase of Vanchem's critical refurbishment programme and debt
repayment.
-- Since both the PFA and the Instrument, require the prior
written consent of Nedbank Limited ("Nedbank"), the Company and
Bushveld Vametco Alloys (Proprietary) Limited, are in discussions
with Nedbank on the outstanding term loan and revolving credit
facilities, including discussions on the potential pre-payment of
the outstanding debt facilities on completion of the PFA. The
outstanding balance of the Nedbank facilities is ZAR375 million
(circa US$21.9 million), plus accrued interest of US$0.3
million.
-- In addition, the Company announced that the previous owner of
Vanchem, Duferco Participations Holding S.A. ("Duferco"), has
agreed to accept an early repayment of US$11.5 million of their
US$23 million convertible loan notes issued in accordance with the
terms of acquisition announced on 23 October 2019.
-- The financing will enable Bushveld Minerals to recommence the
growth initiatives which were under review as part of the Group's
cash preservation and capital allocation measures implemented to
manage the near-term uncertain operating conditions as a result of
the Covid-19 pandemic.
-- The financing and refinancing will allow the Group to reduce
its gearing levels and strengthen its balance sheet.
-- On 3 August 2020 Bushveld Minerals, announced that Bushveld
Energy (an 84 per cent subsidiary of Bushveld Minerals) had
completed the investment in Austrian-based Enerox GmbH ("Enerox")
as part of a consortium.
Fortune Mojapelo, CEO of Bushveld Minerals, commented:
"During these difficult times we continued to support our
employees while meeting our customers' orders. In addition, we have
carried on playing a supportive role in our local communities by
supplying water and sanitisers to local hospitals, police stations,
and care homes. Along with our peers in the industry, we halted
production at Vametco and Vanchem for almost a full month under the
South African government's lockdown measures imposed in late March
2020, followed by a ramp up towards previous production levels.
Unfortunately, the spread of the virus has continued
post-lockdown, resulting in a limited number of positive cases at
our own operations. Whilst all of those cases have successfully
recovered and returned to work, this has necessitated operational
adjustments to accommodate social distancing, Covid-19 protocols
and altered shifts for the implementation of certain projects.
Among those impacted was timing of the commissioning of the
Kiln-Off Gas project at Vametco, which was a key part of our
ability to catch up on the lost month of production earlier in the
year and meet our original guidance for 2020. As a result, and
after an extensive review, in early September 2020 we reduced
annual guidance.
Vanchem, the brownfield processing business we acquired at the
end of 2019, continues to perform well, from both a cost and
production perspective, and we are excited by the opportunity we
have there, in terms of growth, in the years to come.
Bushveld Energy continues to go from strength to strength. Our
VRFB Investment Platform has seen us invest in two of the most
exciting and developed VRFB storage businesses, and at the same
time we have made positive progress on our own projects in South
Africa. The electrolyte plant received approval from the South
African Department of Trade Industry and Competition and the
engineering phase of the plant has commenced.
Vanadium demand has recovered in China post lockdown, but this
is not yet the case in Europe and the US. As a result, we have
redirected more product to China in order to take advantage of the
higher prices. The outlook for the remainder of the year continues
to be challenging, as a result of the lower vanadium price and
longer delivery period to customers. However, Bushveld is now in a
stronger position to execute its growth plans to expand production
as demand recovers as a result of global stimulus programmes. We
continue to operate our plants safely in accordance with Covid-19
protocols, and our prime responsibility remains to our employees
and the communities in which we operate - we thank them for their
hard work over the past six months.
We started 2020 on a strong financial footing and accessed our
financial facilities to weather the coming storm. With US$24.6
million in cash at the end of June, we entered H2 2020 in a solid
financial position.
Today, we separately announced a long-term PFA of US$30 million
with Orion. Under a separate agreement, Orion has also
conditionally agreed to subscribe for a minimum of US$10 million,
and a maximum of US$20 million of convertible loan notes under a
US$35 million Instrument with the remaining balance of US$15
million of convertible loan notes to be offered by the Company, to
interested third party investors. This funding will provide us with
flexibility around the expansion of Vametco and the first phase of
the refurbishment of Vanchem."
Conference call
Bushveld Minerals Chief Executive Officer, Fortune Mojapelo, and
Finance Director, Tanya Chikanza will host a conference call at
9:30am BST (10:30am SAST) today to discuss the announcement with
analysts. Participants may join the call by dialling:
Tel: United Kingdom: +44 (0) 330 336 9127; South Africa: +27 11 844 6054
Toll Free: United Kingdom: 0800 358 6377; South Africa: 0800 998 654
Pin: 2792652
Webcast link https://webcasting.brrmedia.co.uk/broadcast/5f6e055667e6d719f1fc1362
A replay of the conference call will be available on the
Company's website post-call.
Chief Executive's Report
Dear Shareholders,
There is no doubt the past six months will go down in history as
one of the most challenging periods in our generation of modern
society.
Having said that, and while the pandemic continues to spread,
the world is in a much better position to tackle this virus now
than in the early days of the outbreak; evidenced by a much lower
mortality rate, increased testing, and the implementation of
protocols around social distancing and other preventative measures
that are now a part of our everyday life.
From Bushveld's perspective, we continue to believe the South
African government's lockdown measures in March 2020 were the best
course of action to stop the rapid spread of the virus. There is no
doubt this action saved countless lives.
Fundamentals for the vanadium market remain robust, supported by
the recovery in demand from China, which was a net vanadium
importer in June and July and the European Union's EUR1.8 trillion
(circa US$2.1 trillion) budget and corona virus recovery fund to
stimulate the European economy, which is expected to include
significant infrastructure spending. Bushveld Minerals is well
positioned to take advantage of future increases in global vanadium
demand.
Despite the unprecedented challenges that we have faced in the
first half of the financial year, the Company remains committed to
delivering on 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,
vanadium primary processing assets and a downstream energy storage
business, positioned to play a leading role in the growing
stationary energy storage market.
Safety and Covid-19
Health and safety remain a top priority for the Company, and we
are committed to providing a safe environment for our employees.
During these difficult times we have supported our local
communities by supplying water and sanitisers to local hospitals,
police stations and old age homes. As at 30 August 2020 we had 36
Covid-19 positive cases, I am glad to announce that all individuals
have recovered and returned to work.
Furthermore, I am pleased to report that there were no
fatalities. Vametco recorded an 11 per cent improvement in TIFR to
18.80 relative to the corresponding prior period (H1 2019: 21.16)
and Vanchem recorded a TIFR of 0.009.
Operations
Bushveld has one of the largest, high-grade primary vanadium
resource bases 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. The Company's mineral resources and processing facilities
are situated in South Africa.
While Bushveld Vanadium was initially operating at the run-rate
required to meet its Group 2020 guidance of between 3,960 mtV and
4,300 mtV, this was interrupted on 23 March 2020 when the South
African Government issued a directive imposing 21 days nationwide
lockdown effective from midnight on 26 March 2020, for all
citizens, to minimise movement of non-essential businesses and
activities. On 9 April, the Government announced a two-week
extension of the lockdown period to 30 April 2020.
As per the Amended Disaster Regulations announced by the South
African Government on 16 April 2020, mining operations were allowed
to re-open and operate at a reduced capacity of 50 per cent of
normal production levels. Vametco recommenced processing activities
in April at a reduced capacity of approximately 50 per cent of
production manning levels, in accordance with the Government's
directive. Open pit and processing plant were permitted to return
to 100 per cent production levels from 1 May 2020. Both Vametco and
Vanchem commenced ramp-up and returned to pre-lockdown production
levels in May 2020.
Vametco integrated mine and processing facility (74%
ownership)
Table 2: Vametco operational overview (on a 100% basis)(1)
Description H1 2020 H1 2019 H1 2020
Unit vs
H1 2019
Vanadium (Nitrovan
plus FeV) produced mtV(2) 1,218 1,392 -12.5%
--------- -------- -------- ---------
Vanadium sold(3) mtV(2) 1,777 1,115 59.4%
--------- -------- -------- ---------
Average realised
price US$/kgV 24.60 70.00 -64.9
--------- -------- -------- ---------
Production cash
cost (C1)(4) ZAR/kgV 285.90 274.30 4.2%
--------- -------- -------- ---------
Production cash
cost (C1)(4) US$/kgV 17.20 19.30 -10.9%
--------- -------- -------- ---------
Total cash cost(5) US$/kgV 23.90 28.80 -17.0%
--------- -------- -------- ---------
1. Based on provisional, unaudited figures. Bushveld's net
attributable interest of the above figures is approximately 74 per
cent.
2. mtV = metric tonnes of vanadium.
3. Sales of 1,777 mtV includes intercompany sales of 281 mtV. Of
the 281 mtV of intercompany sales, 251 mtV have been converted into
sales to external customers during Q3 2020.
4. Excludes depreciation, royalties, movement in finished goods
inventories, sales commissions, selling, general &
administrative expenses, social expenses, sustaining capex and cost
associated with Covid-19.
5. Excludes depreciation, movements in finished goods inventories and sales commissions.
Production for H1 2020 was 1,218 mtV (100 per cent basis) in the
form of Nitrovan and Ferrovanadium. Production was 13 per cent
below H1 2019 production (H1 2019: 1,392 mtV) as Vametco lost 300
mtV of production due to the Covid-19 nationwide lockdown. Vametco
sold 1,777 mtV, (includes intercompany sales of 281 mtV, of which
251 mtV have been converted into sales to external customers during
Q3 2020), 59 per cent more than a year earlier. Production cash
cost (C1) in the period was US$17.20/kgV, 11 per cent below H1
2019, supported by a weaker ZAR:USD. Total cash cost was
US$23.90/kgV.
A Kiln-Off Gas project was initiated in 2018 to comply with
environmental regulations relating to air emissions and further
increase kiln feed throughput. Commissioning of the Kiln-Off Gas
project was planned to be completed during the first half of 2020.
As previously communicated, due to the Covid-19 lockdown, increase
in social distancing measures and a Covid-19 outbreak at the
manufacturer's facility, commissioning was postponed to the end of
Q3 2020. Kiln-Off Gas was commissioned in September 2020, the total
capital expenditure of the project for 2020 was US$2.3 million.
As announced in the H1 Operational Update, the impact on
operating conditions due to an increase in positive Covid-19 cases
and a delay in the commissioning of the Kiln-Off Gas project led to
Vametco's guidance being revised to between 2,700 mtV and 2,850 mtV
(previously between 3,000 mtV and 3,200 mtV) and production cash
cost (C1) guidance to between ZAR295/kgV and ZAR300/kgV
(US$17.50/kgV and US$17.90/kgV).
Vanchem processing facility (100% ownership)
Table 3: Operational highlights for Vanchem
Description H1 CY20
Unit
Chemicals mtV(1) 69
--------- --------
Flake mtV (1) 200
--------- --------
FeV mtV (1) 162
--------- --------
Total production mtV (1) 431
--------- --------
Chemicals mtV(1) 24
--------- --------
Flake mtV (1) 97
--------- --------
FeV mtV (1) 147
--------- --------
Total sales mtV 269
--------- --------
Average realised
price US$/kgV 23.80
--------- --------
Weighted average
production cash cost
(C1)(2) ZAR/kgV 272.30
--------- --------
Weighted average
production cash cost
(C1)(2) US$/kgV 16.40
--------- --------
Total cash cost(3) US$/kgV 22.50
--------- --------
1. mtV = metric tonnes of vanadium.
2. Excludes depreciation, royalties, movement in finished goods
inventories, sales commissions, selling, general &
administrative expenses, social expenses, sustaining capex and cost
associated with Covid-19.
3. Excludes depreciation, movements in finished goods inventories and sales commissions.
Having acquired Vanchem at the end of 2019, we are pleased with
the operational performance of the facility to date and its
contribution to the Group, despite a challenging six-month period
dealing with the Covid-19 pandemic and Eskom's power rationing.
During the period, Vanchem produced a total of 431 mtV. We estimate
that Vanchem suffered a loss of 80 mtV due to the Covid-19
nationwide lockdown in H1 2020. Vanchem sold 269 mtV of vanadium
products in the first half year under Bushveld's ownership.
Production cash cost in the period was US$16.40/kgV, and total cash
cost of US$22.50/kgV.
Processing activities recommenced at the end of April 2020 and
ramped-up to pre-lockdown levels during May 2020 in accordance with
the Government's "risk-adjusted strategy for economic activity". We
were particularly pleased that during May 2020 and June 2020
Vanchem achieved record monthly production of 119 mtV and 97 mtV
respectively.
As a result of the rise in Covid-19 cases in South Africa in Q2
2020 and the impact on operating conditions, Vanchem now expects to
meet the lower end of its production guidance of between 960 mtV
and 1,100 mtV and the higher end of its production cash cost (C1)
guidance of between ZAR310/kgV and ZAR320/kgV (US$18.40/kgV and
US$19.0/kgV).
Vanchem has sufficient stockpiled ore supply to support current
levels of production until H1 2021, after which the Group has the
optionality to supply magnetite concentrates from Vametco to
Vanchem.
Brits resource (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's interest in the asset ranges between 51 per cent
and 74 per cent through three different companies, one of which is
Caber Trade Mining and Invest 1 (Pty) Ltd ("Caber Trade"), the
mining right applicant, and in which the Company holds an interest
of 51 per cent.
The Caber Trade mining right application was recently refused by
the DMRE due to not fulfilling certain conditions that had been set
out in the 2012 letter of acceptance. Caber Trade has subsequently
lodged an appeal against the decision on the grounds that the
process followed in taking the refusal decision was
administratively flawed.
A JORC compliant Competent Person's Report ("CPR") for the
Maiden Mineral Resource was published on the Company's website on
30 January 2020. It is noted that the Caber Trade properties were
not included in the CPR and the mining right refusal therefore has
no impact.
Brits has an Indicated and Inferred Resource of 66.8 Mt (100 per
cent Gross Basis) at an average grade of 1.6 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 1.6 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.
Mokopane project (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 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.
A definitive feasibility study ("DFS") to mine the Main
Magnetite Layer, to provide a resources and reserves assessment
with a focus on Mokopane as a primary feedstock supplier to Vanchem
has been deferred by a year as part of the Group's cash
preservation measures to manage near-term liquidity. When
restarted, we estimate the study will take between nine to12 months
to complete.
The deferral of the DFS does not affect Vanchem's processing
ability as it has sufficient ore supply to support current levels
of production until H1 2021 and the Company retains the optionality
to supply magnetite concentrates from Vametco to the Vanchem
Plant.
Bushveld Energy (86% ownership)
Bushveld Energy, launched in 2016, is focused on developing and
promoting the role of vanadium in the growing global energy storage
market through the application of VRFBs. Bushveld Energy brings the
energy storage value chain to South Africa by leveraging the
Company's South African-mined and beneficiated vanadium.
Our business model embraces a number of activities along the
VRFB value chain, including: electrolyte manufacturing, investment
in VRFB manufacturing, battery deployment and project
development.
Manufacturing
During the period, AR Process Projects ("ARPP"), a South African
EPC company, was awarded the EPC contract for the electrolyte
plant. ARPP is an engineering contracting company comprising sales,
engineering, project management, project services, quality and
commercial services. Since its inception in 1973, the company has
delivered over 150 chemical projects, including evaporators,
crystallisers, polymer, distillation, drying and effluent treatment
plants. An EPC Agreement was finalised and signed during the second
quarter.
ARPP has since commenced on the engineering phase of the EPC
contract.
In Q2 2020, the DTIC approved the electrolyte plant project,
allocating funding to the East London Industrial Development Zone
to construct the building and civil works to house the electrolyte
plant.
Investment
On 1 April 2020, redT merged with Avalon, the merged entity, in
which Bushveld took an 8.71 per cent stake, was named Invinity.
Bushveld entered into a Joint Venture agreement with redT on 9
March 2020 to form a Vanadium Financing Partnership to supply
vanadium electrolyte to be used in third party owned VRFBs projects
developed by redT. The Joint Venture agreement was transferred to
Invinity.
Invinity appointed Rajat Kohli, as a Non-Executive Director in
June 2020, as Bushveld's nominated director according to the
agreement announced between the companies on 1 November 2019.
In addition, post period the Company announced the acquisition
by Enerox Holdings Limited ("EHL") of a further 65.1 per cent of
the share capital of Enerox, as anticipated in its announcement on
19 December 2019. EHL is a newly incorporated investment vehicle
formed by a consortium of investors, including Bushveld Energy
Limited.
Deployment
Bushveld Energy's project development team continues to advance
the Vametco solar PV and VRFB mini-grid project. During the
quarter, key achievements included signing of the surface sublease
agreement, the power purchase agreement ("PPA") and obtaining a
term-sheet to provide debt financing for the project. The team is
finalising a turnkey EPC Agreement for the project, which should be
completed in the coming quarter.
In addition to the initial mini-grid project at Vametco,
Bushveld Energy has been tasked with devising self-generation
options for all of Bushveld's existing and future electrical energy
needs at its operations in South Africa. With current aggregate
loads of 21MW that are expected to increase to over 50MW after the
expansion and refurbishment programmes, this need has the potential
of more than 125MW of solar PV and 180MWh of battery energy storage
systems within Bushveld's facilities.
As previously announced, the UniEnergy Technology ("UET") system
at Eskom completed site acceptance testing in May 2019. As UET
shifted its strategy to a new, modular VRFB product, it was no
longer able to continue monitoring and servicing the system. As a
result, UET shut down the system in October 2019 and an agreement
was reached among Bushveld, IDC, UET and Rongke Power Integration
Co., Ltd ("RPI"), UET's sister company in China, to supply a
replacement system that would be manufactured and maintained by
RPI. The RPI battery of similar power and energy capability was
delivered in Q1 2020; however, due to the Covid-19 pandemic
lockdowns, first in China and then South Africa, the system is yet
to be commissioned.
Board appointment
In March 2020 we announced the appointment of Ms Dolly Mokgatle
as an Independent Non-Executive Director of the Company.
Ms Mokgatle is an established business leader in South Africa
who has held various significant leadership positions within
several of South Africa's state-owned enterprises, as well as
within the private sector. Her leadership roles in the state-owned
enterprises sector has seen her accumulate extensive commercial and
policy-making experience in the Energy Sector. As a senior advisor
to the government on electricity-related matters, Ms Mokgatle has
made contributions that have shaped the country's energy
policy.
Vanadium market
At the start of the year the vanadium price started to recover
from the lows seen in 2019, however, the global Covid-19 pandemic
resulted in the price contracting and flattening. Due to the
pandemic, global steel demand in H1 2020 fell by six per cent to
873 Mt (H1 2019: 928 Mt). The global contraction in steel
production (excluding China) was offset by an increase in Chinese
steel production during the period to 499 Mt, 1.4 per cent higher
than H1 2019 (H1:2019 492Mt). The increase in Chinese steel
production was a result of the fiscal levers that the government
introduced in late March to stimulate and fast-track an economic
recovery. These measures included increased infrastructure spending
via a RMB3.75 trillion (approximately US$500 billion) plan to
encourage infrastructure investments.
China has emerged from the lockdown ahead of most countries.
China's official Purchase Managers' Index of the month of August
came in at 51.0, showing that the policy stimulus is helping in its
domestic recovery from the pandemic, with August marking the fourth
straight month of expansion, although export demand remains
constrained.
Other major countries had gradually started to reopen their
respective economies by the end of Q2 2020 and announced
substantial stimulus to support growth. For example, the European
Union agreed a EUR1.8 trillion (approximately US$2.1 trillion)
budget and coronavirus recovery fund in July 2020, to aid a post
pandemic economic recovery, expected to include significant
infrastructure spend.
The increased infrastructure spending in China has resulted in
higher steel production, supporting vanadium demand, with China
been a net vanadium importer during the months of June and July.
The boost in vanadium demand from China has resulted in a price
premium relative to rest of the world. Robust demand from China is
expected for the rest of the year albeit prices may soften due to
more non-Chinese producers redirecting excess production to China
in order to benefit from the greater spot liquidity and higher
prices, thereby weighing down domestic prices.
Vanadium demand from the North American and European steel and
aerospace industries declined during the period due to the pandemic
and associated plant shutdowns. Demand from these regions is
expected to remain constrained for the rest of the year due to the
economic slowdown.
The Group has taken advantage of the robust vanadium demand and
higher price from China compared to other jurisdictions and
increased its sales to the region. As at the end of H1 2020,
Bushveld Minerals sales to China made up 18 per cent of the group
total, compared to just 3 per cent in H1 2019. However, The
Covid-19 pandemic has increased the delivery period to customers
due to logistics constraints at ports. The increase in transit time
has affected overall sales volumes during the H1 2020 and is
expected to continue for the rest of the year.
Increased deployment of VRFBs and demand is likely to rise as
governments focus on accelerating the energy transition to a
low-carbon energy future, which will increase vanadium demand. In
addition, large, multinational power companies are starting to
deploy VRFB technology in their projects, including ENEL in Spain
and EDF in Oxford, United Kingdom.
Vanadium's unique characteristics as a key element of rebar
production and energy storage technology ensure it will form part
of stimulus plans that countries announce in order to revive their
respective economies in a post-Covid-19 world and accelerate the
transition to a low-carbon energy future.
Financial performance
The results reflect a period of weak vanadium prices of during
the first half the year as well as lost production due to the
Covid-19 pandemic. The London Metal Bulletin Ferrovanadium price
averaged US$25.70/kgV in H1 2020, 54 per cent lower than H1 2019
(H1 2019: US$56.30/kgV).
Income statement
Revenue
Bushveld Minerals generated a revenue of US$43.1 million,
representing a decrease of 45 per cent relative to the prior
corresponding period, due to a 65 per cent decline in the average
realised sales price (H1 2020: US$24.20/kgV vs H1 2019:
US$70.0/kgV). The decline was partly offset by a 58 per cent
increase in Group sales as a result of higher sales from Vametco as
well as the inclusion of sales from Vanchem.
Vametco sold a total of 1,777 mtV which includes intercompany
sales of 281 mtV. Of the 281 intercompany sales have 251 mtV been
converted into sales to customers during Q3 2020. Vanchem sold a
total of 269 mtV.
Cost of sales
Group cost of sales for the period was US$39.0 million (H1 2019:
U$$22.9 million), the increase is primarily due to the inclusion of
Vanchem and the additional sales units for the H1 2020 compared to
prior year. The cost of sales also includes depreciation on the
Vanchem assets, the fair value of which includes an excess of
US$60.5 million over the amount paid which amounted to additional
depreciation of US$4.0 million when compared to prior period of
nil.
Table 4: Production and cash costs
H1 costs
Vametco production cash
cost (C1)(1) US$/KgV 17.20
--------- ------
Vametco total cash cost(2) US$/KgV 23.90
--------- ------
Vanchem production cash
cost (C1)(1) US$/KgV 16.40
--------- ------
Vanchem total cash cost(2) US$/KgV 22.50
--------- ------
1. Excludes depreciation, royalties, movement in finished goods
inventories, sales commissions, selling, general &
administrative expenses, social expenses, sustaining capex and cost
associated with Covid-19.
2. Excludes depreciation, movements in finished goods inventories and sales commissions.
Selling and distribution costs
Selling and distribution costs for the period were US$2.5
million (H1 2019: US8.5 million). The decrease is due to reduced
sales commission costs as a result of the lower realised price at
Vametco of US$24.60/kg, relative to the corresponding prior period
of US$70.00/kgV.
Idle plant costs
Idle plant costs for the period were US$3.1 million (H12019:
US$284,266). The increase is due to the Covid-19 nationwide
lockdown during the months of March 2020 and April 2020.
Administrative expenses
Administrative expenses were US$7.6 million, in line with the
corresponding prior period (H12019: US$ 7.7 million), despite the
inclusion of Vanchem as well as the additional Covid-19 monitoring
and control costs which were unplanned. Administrative expenses
included: US$3.7 million in employee costs, US$2 million in
professional fees, approximately US$1 million in administrative
costs.
Balance sheet
As at 30 June 2020 the carrying value of property plant and
equipment was US$154.6 million, an increase of US$96 million from
30 June 2019, as a result of the inclusion of the Vanchem assets,
which were acquired in November 2019. This is however, a reduction
from the balance recognised in December 2019 of US$185.3 million,
mainly as a result of the weaker ZAR at 30 June 2020 on conversion
of the ZAR based balance sheet to USD. The ZAR:USD exchange rate as
at 30 June 2020 devalued by almost 20 per cent when compared to the
exchange rate as at 31 December 2019.
As at 30 June 2020 total non-current and current liabilities
were US$71.8 million (31 December 2019: US$73.7 million) and
US$19.3 million (31 December 2019: US$19.9 million) respectively.
The non-current liabilities include the Nedbank debt facilities of
ZAR375 million (US$21.9 million) and the Duferco convertible loan
notes of US$23.7 million. Further details can be found in Note
11.
The Group's cash and cash equivalent as at 30 June 2020 was
US$24.6 million, relative to US$34.0 million as at 31 December
2019.
As at 30 June 2020 the environmental rehabilitation liability
was US$14.7 million, relative to US$6.9 million as at 30 June 2019
and US$17.8 million as at 31 December 2019. The increase relative
to 30 June 2019 was due to the inclusion of Vanchem's environmental
rehabilitation liability which was recognised at the end of 2019.
The decrease relative to 31 December 2019 was due to the weaker ZAR
as at 30 June 2020 on conversion of the ZAR based balance sheet to
USD. The ZAR USD exchange rate as at 30 June 2020 devalued by
almost 20 per cent when compared to the exchange rate as at 31
December 2019.
As announced, we are in discussion with Nedbank, on the
outstanding term loan and revolving credit facilities, including
discussions on the potential pre-payment of the outstanding debt
facilities on completion of the PFA. The outstanding balance of the
Nedbank facilities is ZAR375 million approximately US$21.9
million.
In addition, Duferco, the previous owner of Vanchem, has agreed
to accept an early repayment of US$11.5 million of their US$23
million convertible loan notes. US$6.5 million will be repaid
through the issue of new Bushveld shares and the remaining balance
of US$5 million of the loan notes, plus interest of US$1.15 million
will be settled as a cash payment.
Cash flow
Due to a subdued price environment the net cash outflow from
operating activities was (US$2.7 million), relative to an inflow of
US$34.7 million from the corresponding prior period.
The investing activities of the business resulted in an outflow
of US$5.0 million, a reduction of US$6.4 million relative to the
corresponding prior period (H1 2019: US$11.4 million). This is in
line with the Group's cash preservation measures, to prioritise
critical and regulatory capital expenditure during this uncertain
operating conditions and subdued price environment.
Capital expenditure
The Company will continue to adhere to the cash preservation
measures through its capital prioritisation framework, implemented
at the beginning of the year, in light of the uncertain market
conditions due to the Covid-19 pandemic. The Group's 2020 capital
expenditure guidance remains unchanged to ZAR135 million of which
ZAR96 million is allocated as sustaining capital, ZAR35 million as
regulatory capital and ZAR4 million as growth capital.
Vametco
Phase III expansion project
In Q4 2020, we will commence a pre-feasibility study, estimated
to cost ZAR4 million (circa US$240,000) for phase III of the
expansion for Vametco to achieve a steady state production run-rate
of 4,200 mtV per annum. The preliminary capital expenditure for
phase III is estimated at approximately ZAR430 million (circa US$26
million), with most of the cost being Rand-denominated. The capital
expenditure and production profile will be finalised after
prefeasibility and feasibility studies are concluded.
Vanchem
Phase I of the critical refurbishment programme
Tenders for pre-feasibility studies for the prioritised
refurbishment programme projects have been issued with closing
dates towards the end of September 2020. The 2020 capital
expenditure is estimated to be less than ZAR85 million (circa US$5
million) of critical refurbishment, focused on extending the
calcine dump and commence the upgrade of the electrical
reticulation system and the storm water treatment. Construction and
site supervision contracts for the Waste Disposal Facility
extension project were finalised in August 2020 and site work
commenced at the end of August 2020. This project is now expected
to be completed during H1 2021, with part of the associated capital
expenditure now falling into the associated financial year, the
delay, will not compromise the expected production for 2021.
Outlook
Operational
The Group will continue to prioritise operational performance,
cost efficiencies and synergies across Vametco and Vanchem, and
will maintain a disciplined approach towards managing capital
expenditure and optimising operating margins. As announced in the
H1 2020 Operational Update, Due to the Covid-19 nationwide lockdown
we have restated the Group production guidance to between 3,660 mtV
and 3,950 mtV, previously between 3,960 mtV and 4,300 mtV. The
revised guidance is subject to no further Covid-19 related
disruption for the rest of the year, while continuing to monitor
the situation in light of the Covid-19 virus driven risks and their
potential resultant impact on our operations.
On 21 September 2020, the South African government moved the
lockdown status to a level 1, under such, the majority of the
economy will be allowed to operate with minimal restrictions. The
Group will continue to monitor the economic outlook as it moves
towards recovery.
Financial
The Group manages liquidity risk by ensuring that it has
sufficient funds to facilitate all ongoing operations. As part of
the annual budgeting and long-term planning process, the Group's
budget and cashflow forecasting is reviewed and approved by the
Board. The cashflow forecast is amended in line with any material
changes identified during the year. Equally, where funding
requirements are identified from the cashflow forecast, appropriate
measures are taken to ensure these requirements can be satisfied.
In particular, a capital allocation framework is applied which
prioritises maintenance, critical and regulatory capital funding
requirements.
The Group also closely monitors its liquidity risk. It regularly
produces cash forecasts and analyses sensitivities for different
scenarios, including, but not limited to, changes in commodity
prices and different production profiles from the Group's producing
assets.
The impact of Covid-19 has been assessed by the Group and,
although the operations are producing again, near-term operating
conditions remain uncertain. Management continues to run various
scenarios and sensitivities to provide the Board with possible
outcomes to direct the strategy in the best interest of the
business and its shareholders.
Consequently, the Group continues to take a prudent and
proactive approach towards managing liquidity and taking cash
preservation measures necessary to navigate this uncertain and
unprecedented period.
The US$30 million PFA and the convertible loan notes of up to
US$35 million, will allow the Group to recommence its growth
initiatives which were under review as part of the Group's cash
preservation measures implemented to manage the near-term
uncertainty. Furthermore, it will allow the Group to repay part of
its debt and refinance current borrowing arrangements.
Finally, I am proud of the measures we have taken to protect our
people and the business. Bushveld Minerals is now in an even
stronger position to execute on its strategy to be the leading
vertically integrated primary vanadium producer by growing its
production to 8,400 mtV per annum and build Bushveld Energy into
the key energy storage player.
I thank you for your support.
Fortune Mojapelo
Chief Executive Officer.
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Notes Unaudited Unaudited audited
$ $ $
--------------------------------------------------- --------- --------------- ------------ ------------
Continuing operations
Revenue 43,050,652 78,001,182 116,514,112
Cost of sales (38,987,345) (22,879,458) (56,198,919)
--------------- ------------ ------------
Gross profit 4,063,307 55,121,724 60,315,193
Other operating income 771,383 412,905 922,385
Selling and distribution costs (2,454,724) (8,451,397) (7,556,687)
Other mine operating costs (1,620,053) (1,565,719) (3,865,303)
Idle plant costs (3,076,313) (284,266) (2,893,286)
Administrative expenses (7,602,956) (7,687,433) (24,668,491)
--------------- ------------ ------------
Operating (loss)/profit (9,919,356) 37,545,814 22,253,811
Finance income 601,074 2,679,963 3,593,142
Finance costs (1,414,509) (1,448,801) (1,669,456)
Gain on bargain purchase - - 60,586,633
Movement in earnout estimate - 5,912,435 (1,510,572)
--------------- ------------ ------------
(Loss) / profit before taxation (10,732,791) 44,689,411 83,253,558
Taxation 410,263 (13,877,341) (14,005,965)
--------------- ------------ ------------
(Loss) / profit for the period (10,322,528) 30,812,070 69,247,593
Consolidated other comprehensive income:
Items that will not be reclassified to
profit or loss:
Changes in the fair value of financial
assets at fair value through other comprehensive
income 3,268,931 (2,679) (359,045)
Other fair value movements - - 110,175
--------------- ------------ ------------
Total items that will not be reclassified
to profit or loss 3,268,931 (2,679) (248,870)
--------------- ------------ ------------
Items that may be reclassified to profit
or loss:
Currency translation differences (25,438,821) 3,687,039 6,413,737
--------------- ------------ ------------
Other comprehensive income for the period
net of taxation (22,169,890) 3,684,360 6,164,867
--------------- ------------ ------------
Total comprehensive (loss) / income for
the period (32,492,418) 34,496,430 75,412,460
--------------- ------------ ------------
(Loss) / profit attributable to:
Owners of the parent (10,764,522) 21,542,145 61,968,301
Non-controlling interest 441,994 9,269,925 7,279,292
--------------- ------------ ------------
(10,322,528) 30,812,070 69,247,593
--------------- ------------ ------------
Total comprehensive (loss) / income attributable
to:
Owners of the parent (29,383,559) 24,267,874 67,136,957
Non-controlling interest (3,108,859) 10,228,556 8,275,503
--------------- ------------ ------------
(32,492,418) 34,496,430 75,412,460
--------------- ------------ ------------
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2020 2019 2019
Unaudited Unaudited audited
Note(s) $ $ $
----------------------------------- ---------------------------- --------- --------- -----------
Earnings per share
(loss) / Profit per ordinary
share
Basic earnings per share (in
cents) 3 (0.92) 1.92 5.51
Diluted earnings per share (in
cents) 3 (0.92) 1.92 5.45
--------- --------- -----------
- - -
--------- --------- -----------
All results relate to continuing
activities.
The accounting policies on pages 7 to 8 and the notes on pages 7
to 17 form an integral part of the consolidated interim financial
statements.
Statement of Financial Position
--------------------------------------- --------------------------------------
30 June 31 December
2020 2019
Note Unaudited audited
$ $
--------------------------------------- ------ ---------------- ------------
Assets
Non-Current Assets
Intangible assets - exploration and
evaluation 4 56,588,428 59,408,821
Property, plant and equipment 5 154,629,309 185,269,063
Investment properties 2,354,005 2,905,449
Deferred tax 1,739,745 173,892
Financial assets - investments 1,259,254 4,420,891
---------------- ------------
Total Non-Current Assets 216,570,741 252,178,116
---------------- ------------
Current Assets
Inventories 6 34,148,850 35,082,342
Trade and other receivables 7 7,813,472 4,427,793
Restricted investment 5,479,753 6,605,465
Current tax receivable 918,793 493,178
Financial assets at fair value 8 10,221,158 1,952,227
Cash and cash equivalents 9 24,605,511 34,011,557
---------------- ------------
Total Current Assets 83,187,537 82,572,562
---------------- ------------
Total Assets 299,758,278 334,750,678
---------------- ------------
Equity and Liabilities
Share capital 10 15,357,271 15,357,271
Share premium 10 111,067,064 111,067,064
Retained income 72,650,916 83,415,438
Foreign currency translation reserve (23,543,829) (1,655,861)
Fair value reserve 2,648,582 (620,349)
---------------- ------------
Equity attributable to owners of the
parent 178,180,004 207,563,563
Non-controlling interest 30,418,864 33,527,723
---------------- ------------
Total Equity 208,598,868 241,091,286
---------------- ------------
Liabilities
Non-Current Liabilities
Retirement benefit obligation 1,918,263 2,331,325
Environmental rehabilitation liability 14,746,631 17,844,066
Deferred consideration 5,207,923 7,108,819
Borrowings 11 46,229,579 41,756,152
Lease liabilities 3,713,871 4,677,338
---------------- ------------
Total Non-Current Liabilities 71,816,267 73,717,700
---------------- ------------
Current Liabilities
Trade and other payables 12 16,108,622 15,721,502
Provisions 2,288,741 3,432,619
Borrowings 11 266,698 -
Lease liabilities 679,082 787,571
---------------- ------------
Total Current Liabilities 19,343,143 19,941,692
---------------- ------------
Total Liabilities 91,159,410 93,659,392
---------------- ------------
Total Equity and Liabilities 299,758,278 334,750,678
---------------- ------------
Statement of Changes in Equity
Share Share Foreign Fair value Retained Total Non- Total equity
capital
----------------
premium exchange reserve income attributable controlling
translation to interest
reserve equity holders
$ $ $ $ of the group $
$ / company $
$
---------------- ---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Balance at 1
January 2019 14,921,079 101,003,256 (7,073,387) (371,479) 21,447,137 129,926,606 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, net
of tax:
Currency
translation
differences - - 2,728,408 - - 2,728,408 958,631 3,687,039
Fair value
movement on
investments - - - (2,679) - (2,679) - (2,679)
Other fair value - - - - - - - -
movements
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Total
comprehensive
income for
the period - - 2,728,408 (2,679) 21,542,145 24,267,874 10,228,556 34,496,430
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Unaudited
Balance at 30
June 2019 14,921,079 101,003,256 (4,344,979) (374,158) 42,989,282 154,194,480 39,941,002 194,135,482
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Profit for the
period - - - - 40,426,156 40,426,156 (1,990,633) 38,435,523
Other
comprehensive
income, net
of tax:
Currency
translation
differences - - 2,689,118 - - 2,689,118 37,580 2,726,698
Fair value
movement on
investments - - - (356,366) - (356,366) - (356,366)
Other fair value
movements - - - 110,175 - 110,175 - 110,175
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Total
comprehensive
income for
the period - - 2,689,118 (246,191) 40,426,156 42,869,083 (1,953,053) 40,916,030
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Issue of shares 436,192 10,063,808 - - - 10,500,000 - 10,500,000
Dividends paid
to
non-controlling
interest - - - - - - (4,460,226) (4,460,226)
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Audited Balance
at 31 December
2019 15,357,271 111,067,064 (1,655,861) (620,349) 83,415,438 207,563,563 33,527,723 241,091,286
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Loss for the
period - - - - (10,764,522) (10,764,522) 441,994 (10,322,528)
Other
comprehensive
income, net
of tax:
Currency
translation
differences - - (21,887,968) - - (21,887,968) (3,550,853) (25,438,821)
Fair value
movement on
investments - - - 3,268,931 - 3,268,931 - 3,268,931
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Total
comprehensive
Loss for the
period - - (21,887,968) 3,268,931 (10,764,522) (29,383,559) (3,108,859) (32,492,418)
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Unaudited
Balance at 30
June 2020 15,357,271 111,067,064 (23,543,829) 2,648,582 72,650,916 178,180,004 30,418,864 208,598,868
---------- ----------- -------------- -------------- ------------ -------------- -------------- ----------------
Note 10 10
4
Consolidated Statement of Cash Flows
2020 2019 2019
Unaudited Unaudited audited
------------------------------------------
Note(s) $ $ $
------------------------------------------ ------------------------ --------------- -------------- -------------
Cash flows (used in) / from operating
activities
(Loss) / Profit before taxation (10,732,791) 44,689,411 83,253,558
Adjustments for:
Depreciation property, plant and
equipment 5 8,912,034 3,483,155 10,388,145
Gain on bargain purchase - - (60,586,633)
Movement in earnout estimate - (5,912,435) 1,510,572
Finance income (601,074) (2,679,963) (3,593,142)
Finance costs 1,414,509 1,448,801 1,669,456
Changes in working capital (2,065,067) 4,803,162 4,586,737
Income taxes paid 410,263 (11,147,542) (8,767,312)
--------------- -------------- -------------
Net cash (used in) / from operating
activities (2,662,126) 34,684,589 28,461,381
--------------- -------------- -------------
Cash flows (used in) / from investing
activities
Finance income 509,622 2,679,963 3,593,142
Acquisition of business - (6,800,000) (30,713,500)
Purchase of property, plant and equipment 5 (996,844) (5,807,169) (13,320,897)
Payment of deferred consideration (1,680,459) (600,000) (3,600,000)
Purchase of investments (2,004,375) - (4,420,891)
Purchase of exploration and evaluation
assets 4 (816,962) (895,402) (1,268,697)
--------------- -------------- -------------
Net cash from investing activities (4,989,018) (11,422,608) (49,730,843)
--------------- -------------- -------------
Cash flows (used in) / from financing
activities
Payment on lease liabilities (416,207) (305,688) (726,668)
Finance costs
Net proceeds from issue of shares (709,664) (1,448,801) (108,596)
and warrants 10 - - -
Net proceeds from capital raised - - -
Net proceeds / (repayment) of borrowings 8,203,686 - 18,582,864
Dividends paid - - (4,460,226)
--------------- -------------- -------------
Net cash from financing activities 7,077,815 (1,754,489) 13,287,374
--------------- -------------- -------------
Total cash movement for the period (573,329) 21,507,492 (7,982,088)
Cash at the beginning of the period 34,011,557 42,019,123 42,019,123
Effect of translation of foreign
rate (8,832,717) 2,604,102 (25,478)
--------------- -------------- -------------
Total cash at end of the period 9 24,605,511 66,130,719 34,011,557
--------------- -------------- -------------
Notes to the Consolidated Interim Financial Statements
1. Corporate information and principal activities
Bushveld Minerals Limited ("Bushveld") was incorporated and
domiciled in Guernsey on 5 January 2012 and admitted to the AIM
market in London on 26 March 2012.
The address of the Company's registered office is 18-20 Le
Pollet, St Peter Port, Guernsey. The consolidated financial
statements of the Company for the interim period ended 30 June 2020
comprise of the Company and its subsidiaries (The "Group") and the
Group's interest in equity accounted investments.
2. SIGNIFICANT ACCOUNTING POLICIES Basis of accounting
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 2019 is based on the statutory accounts for the financial
period ended 31 December 2019. The auditors reported on those
accounts: their report was unqualified and did not contain
statements where the auditor is required to report by
exception.
The consolidated interim financial statements have been prepared
on the basis of accounting policies applicable to a going concern.
This basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of
liabilities, contingent obligations and commitments will occur in
the ordinary course of business.
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.
Notes to the Consolidated Interim Financial Statements
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 Mineral and Petroleum
Resources Development Act (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 2019 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 vanadium and iron ore
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 2020 based on planned future
development of the projects and current and forecast commodity
prices. See note 4 for details of exploration and evaluation
assets.
vii. IFRS 3 Business combination
In accounting for the acquisition of a business, the company
assesses whether a business combination met the IFRS 3 definition
of "a business". IFRS 3 states that "a business consists of inputs
and processes applied to those inputs that can create outputs".
IFRS 3 requires an acquirer to measure the cost of the
acquisition at the fair value of the consideration paid, and
measure acquired identifiable assets and liabilities at their fair
values, with any excess of acquired assets and liabilities over the
consideration paid (a 'bargain purchase') recognised in profit or
loss immediately. The company engages an independent valuation
expert to value the assets acquired using the most appropriate fair
value measurement technique given the nature of the assets acquired
and the circumstances of the acquisition.
Where a business combination results in a bargain purchase, IFRS
3 requires that the acquiror to reassess whether it has correctly
identified all the assets and liabilities acquired and to review
the procedures used to measure the fair values recognised at the
acquisition date.
3. Profit/(loss) per share
FROM CONTINUING OPERATIONS
Basic earnings per share
The calculation of a basic earnings per share of (0.92) cents
(December 2019: 5.51 cents), is calculated using the total loss for
the year attributable to the owners of the company of $10,322,528
(December 2019: Profit of $61,968,301) and 1,125,562,148 shares
(2019:1,125,562,148) being weighted average number of share in
issue during the period.
Diluted earnings per share
Due to the Group being loss making for the period, instruments
are not considered dilutive and therefore the diluted loss per
share is the same as basic loss per share.
3. Intangible assets - exploration and evaluation
30 June 31 December
2020 2021
(unaudited) (audited)
Cost / Accumulated Carrying Cost / Accumulated Carrying
Valuation amortization value Valuation amortization value
$ $ $ $ $ $
Vanadium and
Iron ore 53,497,689 - 53,497,689 54,245,349 - 54,245,349
Coal 3,090,739 - 3,090,739 5,163,472 - 5,163,472
----------- -------------- ----------- ----------- -------------- -----------
Total 56,588,428 - 56,588,428 59,408,821 - 59,408,821
----------- -------------- ----------- ----------- -------------- -----------
Reconciliation of intangible assets - exploration and evaluation
- 30 June 2020
Opening Additions Exchange Total
balance at differences
1
January 2020
$ $ $ $
-------------- --------- --------------- -------------
Vanadium and Iron ore 56,827,085 72,919 (3,402,315) 53,497,689
Coal 2,581,736 744,043 (235,040) 3,090,739
-------------- --------- --------------- -------------
59,408,821 816,962 (3,637,355) 56,588,428
-------------- --------- --------------- -------------
Reconciliation of intangible assets - exploration and evaluation
- 31 December 2019
Opening Additions Exchange Total
balance at differences
1
January 2019
$ $ $ $
------------ --------- --------------- -------------
Vanadium and Iron ore 55,639,067 198,319 989,699 56,827,085
Coal 1,511,358 1,070,378 - 2,581,736
------------ --------- --------------- -------------
57,150,425 1,268,697 989,699 59,408,821
------------ --------- --------------- -------------
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").
The Department of Mineral Resources and Energy ("DMRE") granted
a mining right to Pamish Investments No. 39 (Pty) Ltd ("Pamish"),
in respect of the five farms Vliegekraal 783 LR, Vogelstruisfontein
765 LR, Vriesland 781 LR, Schoonoord 786 LR and Bellevue 808 LR
situated in the District of Mogalakwena, Limpopo, which make up the
Mokopane Project.
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 1.75 per cent in magnetite (1.41 per
cent in-situ). The Mokopane deposit is a layered orebody along a
5.5 km north-south strike at a dip of between 18 degrees and 22
degrees west. The project comprises three adjacent and parallel
magnetite layers namely the Main Magnetite Layer ("MML"), the MML
Hanging Wall ("MML- HW") layer and the AB Zone. 298 Mt (JORC)
resources and reserves run across three parallel overlying
magnetite layers with grades ranging from 1.6 per cent to over 2
per cent V(2) O(5) as follows:
- MML: 52 Mt @ 1.48 per cent V(2) O(5) (1.75 per cent V(2) O(5)
in magnetite);
- MML-HW & Parting: 233 Mt @ 0.8 per cent V2O5 (1.5-1.6 per
cent V(2) O(5) in magnetite); and
- AB Zone: 12 Mt @ 0.7 per cent V(2) O(5) (greater than 2 per
cent V(2) O(5) in magnetite).
The mining right allows for the extraction of several other
minerals over the entire Mokopane project resource area, including,
titanium, phosphate, platinum group metals, gold, cobalt, copper,
nickel and chrome.
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.
4. Intangible assets - exploration and evaluation (continued) Brits Vanadium Project
Bushveld Minerals Limited has been granted Section 11 of the
Mineral and Petroleum Resources Development Act (MPRDA) for
acquiring control of Sable Platinum Mining Pty Ltd for NW
30/5/1/1/2/11124 PR, held through Great Line 1 Invest (Pty) Ltd.
The company has also applied for Section 102 of the Mineral and
Petroleum Resources Development Act (MPRDA) and waiting for
approval to incorporate NW 30/5/1/1/2/11069 PR into NW
30/5/1/1/2/11124 PR.
Bushveld Minerals Limited has applied for prospecting which has
been accepted and environmental authorisation has been granted
under GP 30/5/1/1/2/10576 PR held by 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.
Notes to the Consolidated Interim Financial Statements
5. Property, plant and equipment
other machinery furniture ng assets asset stripping construction
improvements and asset
equipment
-------------
$ $ $ $ $ $ $ $
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
Cost
At 01 January
2019 1,259,049 42,878,860 241,295 1,575,895 - - 7,455,662 53,410,761
Additions 6,714,835 113,453,458 1,371,514 942,121 5,727,902 3,920,684 11,883,121 144,013,635
Disposals and
scrappings (414,250) (2,134,666) (239,102) - - - - (2,788,018)
Transfers
from capital
work 268,304 8,992,207 48,833 - - - (9,309,344) -
in progress
Foreign
exchange 368,583 3,179,724 51,571 79,271 7,988 - 639,339 4,326,476
movements
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 31
December
2019
(audited) 8,196,521 166,369,583 1,474,111 2,597,287 5,735,890 3,920,684 10,668,778 198,962,854
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
Additions - 47,834 8,517 - - - 940,493 996,844
Transfers - 70,857 - - (70,857) - - -
Foreign
Exchange
differences (1,555,670) (18,826,472) (279,781) (453,182) (1,020,360) (744,132) (2,101,682) (24,981,279)
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 30 June
2020
(unaudited) 6,640,851 147,661,802 1,202,847 2,144,105 4,644,673 3,176,552 9,507,589 174,978,419
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
Depreciation
At 01 January
2019 (237,758) (5,028,852) (179,873) (83,106) - - - (5,529,589)
Disposals 414,251 1,804,752 234,711 - - - - 2,453,714
Depreciation (1,177,756) (5,947,944) (617,794) (848,939) (627,475) (1,168,237) - (10,388,145)
Foreign
exchange (21,021) (211,965) 27,246 (22,543) (1,488) - - (229,771)
movements
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 31
December
2019
(audited) (1,022,284) (9,384,009) (535,710) (954,588) (628,963) (1,168,237) - (13,693,791)
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
Depreciation
charge for
the year (217,617) (7,104,791) (90,243) - (286,533) (1,212,850) - (8,912,034)
Disposals - - 766 - - - - 766
Foreign
exchange 189,435 1,292,463 120,565 181,178 152,752 319,556 - 2,255,949
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 30 June
2020
(unaudited) (1,050,466) (15,196,337) (504,622) (773,410) (762,744) (2,061,531) - (20,349,110)
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
Net Book
Value
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 31
December
2019
(audited) 7,174,237 156,985,574 938,400 1,642,700 5,106,927 2,752,447 10,668,778 185,269,063
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
At 30 June
2020
(unaudited) 5,590,385 132,465,465 698,225 1,370,695 3,881,929 1,115,021 9,507,589 154,629,309
------------- ------------ --------------- -------------- --------- ------------- --------------- ------------ --------------
6. Inventories
30 June 31 December
2020
(unaudited) 2019
(audited
Finished goods 12,591,525 17,062,028
Work in progress 7,642,416 4,544,303
Raw materials 1,498,412 1,702,062
Consumable stores 12,416,497 11,773,949
------------- -----------
Inventories 34,148,850 35,082,342
------------- -----------
The amount of write-down of inventories due to net realisable
value provision requirement is nil (2019: nil).
7. Trade and other receivables
Trade receivables 3,895,067 2,762,448
Other receivables 1,571,492 1,665,345
Deposits 1,924 -
Non-financial instruments:
VAT 2,344,989 -
----------- ---------
Total trade and other receivables 7,813,472 4,427,793
----------- ---------
Trade receivables are non-interest bearing and are generally on
15-90 day terms. There were no indicators of impairment at the year
end. At 30 June 2020 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 30 June 2020, no receivables are past
their due date, hence no allowance for doubtful receivables is
provided on the basis that expected credit losses are nil.
8. Financial assets at fair value
30 June 31 December
2020 (unaudited)
2019
(audited)
$ $
------------------- -----------
Opening balance 1,952,227 2,311,272
Additions 5,000,000 -
Fair value movement 3,268,931 (359,045)
------------------- -----------
Closing balance 10,221,158 1,952,227
------------------- -----------
AfriTin Mining Limited
The Group measures the fair value of the investment in AfriTin
Mining Limited using the quoted price in an active market for that
instrument. A market is regarded as active if transactions for the
asset or liability take place with sufficient frequency and volume
to provide pricing information on an ongoing basis.
8. Financial assets at fair value (continued) Invinity Energy Systems
On 1 November 2019, Bushveld announced it had agreed to support
the Merger with funding of US$5 million through a convertible loan
to Avalon. In accordance with the terms of the convertible loan, on
successful completion of the Merger in March 2020, the loan was
convert into shares in Invinity. The previously provided US$5
million loan (together with the accrued interest and commitment
fee) has been converted into 302,978,063 Ordinary Shares at a price
of 1.65 pence in Invinity, representing up to 8.71 per cent of
Invinity. The shares issued to Bushveld are not subject to a
lock-in arrangement. In addition to the funding from Bushveld,
Invinity has raised GBP7.9 million through an equity placing at
1.65 pence per share.
Under the agreement, following the completion of the Merger,
Bushveld has a right to nominate a director to the Board of
Invinity, subject to Bushveld retaining at least 5 per cent of the
issued share capital of Invinity. Rajat Kohli was appointed as a
Non-Executive Director in June 2020, as Bushveld's nominated
director. Bushveld will retain that right after one year provided
it beneficially owns at least 10 per cent of Invinity. In addition,
for so long as Bushveld beneficially owns at least 20 per cent of
Invinity, it shall have a right to nominate two members of the
board of Invinity. The investment is in line with Bushveld's
strategy of partnering with VRFB companies and part of the VRFB
Investment Platform ("VIP"), as announced on 1 November 2019.
9. Cash and cash equivalents
30 June 2020 31 December
2021
(unaudited) (audited)
$ $
-------------- ------------
Cash at hand and in bank 24,605,511 34,011,557
-------------- ------------
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. Share capital and share
premium Total share
Shares Number Share capital Share premium capital
and premium
$ $ $
------------------------- --------------- ------------------------- ----------------
At 1 January 2019 1,119,727,953 14,921,079 101,003,256 115,924,335
Shares issued - Yellow Dragon
Holdings 33,914,729 436,192 10,063,808 10,500,000
------------------------- --------------- ------------------------- ----------------
At 1 January 2020 1,153,642,682 15,357,271 111,067,064 126,424,335
------------------------- --------------- ------------------------- ----------------
At 30 June 2020 1,153,642,682 15,357,271 111,067,064 126,424,335
------------------------- --------------- ------------------------- ----------------
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 2020 the Company owns 670,000 (2019: 670,000)
treasury shares with a nominal value of 1 pence.
30 June 31 December
2020 (unaudited)
2019
(audited)
$ $
------------------- -------------
11. Borrowings
Development Bank of Southern Africa 845,588 511,522
NedBank Term Loan and Revolving Credit Facility 21,903,977 18,071,342
Convertible Loan Notes 23,746,712 23,173,288
------------------- -------------
46,496,277 41,756,152
------------------- -------------
Development Bank of Southern Africa - Facility Agreement
Lemur Holdings Limited, a subsidiary undertaking, entered into a
US$1,000,000 facility agreement with the Development Bank of
Southern Africa Limited in March 2019. The purpose of the facility
is to assist with the costs associated with delivering the key
milestones to the power project. The repayment is subject to the
successful bankable feasibility study of the project at which point
the repayment would be the facility value plus an amount equal to
an IRR of 40% capped at 2.5 times which ever is lower. As at 30
June 2020, only US$845,588 was drawn down.
NedBank Term Loan and Revolving Credit Facility
Bushveld Minerals Limited secured ZAR375 million (approximately
US$25 million) in debt facilities through its subsidiary Bushveld
Vametco Alloys Proprietary Limited ('the Borrower') with Nedbank
Limited (acting through its Nedbank Corporate and Investment
Banking division), a South African based financial institution, in
the form of a ZAR250 million loan and a ZAR125 million revolving
credit facility.
Key highlights of the ZAR250 million loan which was drawn in
November 2019:
Five-year amortising loan;
Interest rate calculated using the three year or six months
JIBAR1 as selected by the Company plus a 3.4% margin;
Interest payments are due semi-annually with first payment due
in six months from financial close;
Principal repayments will be made semi-annually in arrears over
four years in eight equal instalments, with first payment due 18
months after financial close.
Key highlights of the ZAR125 million revolving credit facility,
which was undrawn for the financial year 2019 and drawn in March
2020:
Three-year term;
Interest rate calculated using the three year or six months
JIBAR1 as selected by the Company plus a 3.6% margin;
Interest payments are due semi-annually with first payment due
in six months from financial close.
The security provided is customary for a secured financing of
this nature, including cession of shares in the Borrower, security
over the assets of the Borrower, and a parent guarantee.
Notes to the Consolidated Interim Financial Statements
11. Borrowings (continued) Financial Covenants undertaken
The Borrower shall ensure that for so long as any amount is
outstanding under a Finance Document or any Commitment is in force,
in respect of each Measurement Period:
the Cumulative DSCR exceeds 1.4 times;
the Interest Cover Ratio exceeds 4 times; and
the Net Debt to EBITDA Ratio at a Borrower level shall not
exceed 2 times.
Convertible Loan
As part of the consideration related to the Bushveld Vanchem
acquisition, a payment of US$23.0 million is to be satisfied
through the issue of Bushveld Minerals unsecured convertible loan
notes ('Loan Notes') with the following repayment, redemption and
conversion terms (in addition to customary covenants, warranties
and acceleration provisions):
Interest at a coupon of 5% per annum payable annually in arrears
or on conversion or redemption;
Repayable in cash after the second anniversary of Transaction
Closure, plus any accrued interest;
Convertible at the holder's option in two tranches of up to
US$11.5 million each, after the first and second anniversary of
Transaction Closure respectively, at a 5% discount to the
prevailing 10-day volume weighted average Bushveld Minerals share
price leading up to conversion;
Early redemption of the Loan Notes at the election of Bushveld
Minerals, subject to the condition that the holder will have an
option of converting up to 50% of the early redemption amounts into
Bushveld Minerals shares on the same terms set out above;
Scope for acceleration of redemption of up to US$5 million of
the Loan Notes 12 months after Transaction Closure if an average
ferrovanadium price of US$40/kgV is realised during any nine-month
period during the 12 month period after Transaction Closure;
Obligation to repay an amount equal to 40% of any cash received
on a new share issue which raises more than US$30 million, provided
no more than 50% of the Loan Notes have already been paid, redeemed
or converted;
Obligation to repay an amount equal to 50% of any debt raised
over US$15 million, provided no more than 50% of the Loan Notes
have been repaid, redeemed or converted;
Obligation to repay on a substantial sale of assets or change of
control.
The holder will not be able to divest any Bushveld Minerals
shares received for six months following conversion and be subject
to an orderly market arrangement for the following six months.
12. Trade and other payables 30 June 2020 (unaudited) 31 December
2019
Financial instruments: (audited)
Trade payables $ $
Accruals and other payables 2,158,490 3,069,751
Non-financial instruments:
VAT 243,999 -
------------------------ -----------
16,108,622 15,721,502
------------------------ -----------
Trade and other payables principally comprise amounts
outstanding for trade purchases and on-going costs. The average
credit period taken for trade purchases is 30 days.
The group has financial risk management policies in place to
ensure that all payables are paid within the pre-arranged credit
terms. No interest has been charged by any suppliers as a result of
late payment of invoices during the year.
The directors consider that the carrying amount of trade and
other payables approximates to their fair value.
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IR ZZGFLVGVGGZG
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