TIDMBMN
RNS Number : 2865O
Bushveld Minerals Limited
08 February 2021
The following amendments has been made to the " Q4 and Full Year
2020 Operational Update" released on 4 February 2021 at 07:01 under
RNS number 9919N
- Sales of 4,264 mtV includes intercompany sales of 422 mtV ,
rather than sales of 4,264 mtV includes intercompany sales of 1,255
mtV as previously stated.
- Sales of 1,268 includes intercompany sales of 15 mtV, rather
than sales of 1,268 includes intercompany sales of 520 mtV as
previously stated.
- Sales of 3,333 mtV includes sales to customers of 2,911 mtV
and intercompany sales of 422 mtV, rather than sales of 3,333 mtV
includes sales to customers of 2,078 mtV and intercompany sales of
1,255 mtV as previously stated.
- Sold 907 mtV in Q4 2020, of which 892 mtV were final sales to
customers. The sales volume includes intercompany sales of 15 mtV,
rather than Sold 907 mtV in Q4 2020, of which 388 mtV were final
sales to customers. The sales volume includes intercompany sales of
520 mtV as previously stated.
All other details remain unchanged.
The full amended text is shown below.
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.
4 February 2021
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Q4 and Full Year 2020 Operational Update
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer and energy storage solutions provider,
with ownership of high-grade assets in South Africa, ("Bushveld"),
is pleased to provide an operational update for the fourth quarter
and 12 months ending 31 December 2020 ("Q4 2020" and "12M
2020").
Key Highlights
Bushveld Vanadium
-- 12M 2020 Group production of 3,631 mtV was 24 per cent higher
than 12M 2019 (12M 2019: 2,931 mtV), primarily as a result of the
inclusion of Vanchem's production for the full 12-month period,
partially offset by impact of the nationwide lockdown in South
Africa during H1 2020.
- Production was marginally lower than 2020 guidance of between
3,660 mtV and 3,940 mtV (less than one per cent).
-- 12M 2020 Group sales of 4,264 mtV(1) were 78 per cent higher
than 12M 2019 (12M 2019: 2,392 mtV), as a result of the addition of
sales from Vanchem as well as increased demand from customers in H2
2020 .
- Sales to China made up a total of 21 per cent of total volumes
sold in 12M 2020 compared with 10 per cent in 12M 2019, in line
with the Group's strategy of increasing sales to higher-priced
markets.
-- Q4 2020 Group production of 951 mtV was seven per cent below
Q3 2020 production (Q3 2020: 1,019 mtV), mainly due to unplanned
maintenance stoppages at both operations and severe weather
conditions.
-- Q4 2020 Group sales of 1,268 mtV(2) rose by 35 per cent
relative to Q3 2020 (Q3 2020: 940 mtV), as demand for vanadium
products strengthened during the quarter across all major markets
as a result of increasing industrial output in developed
economies.
-- A Vametco JORC (2012) compliant Competent Persons Report
("CPR") for the updated Mineral Reserve and Resource Estimate for
Vametco was published today on the Company's website.
-- Appointment of Francois Naude as Director of Operations
(non-board), overseeing Vametco, Vanchem and Bushveld Electrolyte
Company ("BELCO").
1. Sales of 4,264 mtV includes intercompany sales of 422 mtV.
2. Sales of 1,268 includes intercompany sales of 15 mtV.
Bushveld Energy
Electrolyte
-- During the year Bushveld Energy successfully established
Bushveld Electrolyte Company ("BELCO") as the operational company
for the electrolyte business. The Engineering phase of the
Engineering Procurement Construction ("EPC") process was completed
in Q4 2020. The procurement process will commence in Q1 2021
followed by construction.
Deployments
-- Received environmental authorisation and awarded the EPC for
the construction of a hybrid mini-grid at Vametco. Enerox GmbH
("Enerox") will supply the 1MW / 4MWh Vanadium Redox Flow Battery
("VRFB") for the project and Abengoa will manage the EPC of the
project, including 3.5 MW of solar PV.
Investments
-- During the year, in line with its strategy, the Group
successfully completed its investments in VRFB original equipment
manufacturers ("OEMs"), Invinity Energy Systems ("Invinity") and
Enerox.
Financial Highlights
-- The Group successfully completed and drew down the US$65
million financing package with Orion Mine Finance ("Orion") to fund
capital projects as well as partially retire existing debt
facilities.
-- Unaudited Group cash and cash equivalent as at 31 December
2020 was approximately US$50.5 million, compared to US$34.0 million
on 31 December 2019. The 31 December 2020 unaudited cash and cash
equivalent position includes the Orion production financing
arrangement and convertible loan note, and ZAR125 million Nedbank
revolving credit facility.
2021 Guidance and Capital Expenditure
Bushveld Vanadium
-- Estimated Group production of between 4,100 mtV and 4,350 mtV
in 2021, a 13 per cent to 20 per cent increase relative to 2020,
with volumes weighted towards the second half due to a 35-day
maintenance shutdown at Vametco during Q1 2021.
-- Progress procurement and construction of the electrolyte
plant. In order to ensure closer alignment of all vanadium
operating facilities, BELCO will migrate to the Bushveld Vanadium
platform both operationally and in ownership.
Bushveld Energy
-- Attaining financial close and commence construction of the
hybrid mini-grid at Vametco.
-- Advance the development of Bushveld Energy's Deployment
pipeline in Africa, including self-generation options for all of
Bushveld's existing and future electrical energy needs. Bushveld's
energy needs have the potential of more than 125MW of solar PV and
180MWh of battery energy storage systems within our facilities.
-- Continue to support and collaborate with global VRFB
manufacturers as per Bushveld Energy's VRFB OEM partnership
strategy. This includes scale up of the vanadium electrolyte rental
product with new contracts, comprising the rental contract with
Pivot Power, part of EDF Renewables.
Group Capital Expenditure
-- Capital expenditure expected for 2021 of approximately ZAR540
million (circa US$33.7 million), with most of the cost being
Rand-denominated. The Capital expenditure includes the
following:
- Vametco ZAR85.2 million (circa US$5.3 million);
- Vanchem ZAR251 million (circa US$15.7 million);
- Mokopane DFS ZAR40 million (circa US$2.5 million); and
- Bushveld Energy, including BELCO, ZAR152 million (circa US$9.5
million), which will be principally funded by Bushveld Energy's
partial asset sales.
-- Further details can be found in the Bushveld Vanadium and
Bushveld Energy sections of the update.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"Production for the year was 24 per cent higher than the prior
year, despite the challenging environment during the year. The
fourth quarter was characterised by strong vanadium demand and
sales which has carried in 2021. Achieving our production targets
while continuing to ensure the safety of our employees is our most
important goal.
During the quarter we also completed the US$65 million funding
agreement with Orion Mine Finance announced at the end of September
2020. The funding secures our growth plans at Vametco and
contributes towards the first phase of Vanchem's refurbishment
programme. Furthermore, the financing has strengthened our balance
sheet as we were able to retire the Nedbank term loan and repay
half of the Duferco Participations Holding S.A ("Duferco")
convertible loan note with cash and shares.
For 2021, we expect to raise production by between 13 per cent
to 20 per cent to between 4,100 mtV and 4,350 mtV. Additional
maintenance work has been identified at Vametco which will require
further downtime in the year, while further debottlenecking
activities will be required on certain parts of the plant.
Vanchem's three-kiln configuration allows the plant to operate
without the need of a shutdown while maintenance is being
conducted. The maintenance and downtime have all been factored into
the production guidance released today. In addition, as part of our
initiatives to enhance our operational performance, we are pleased
to announce the appointment of vastly experienced Francois Naude as
Director of Operations, who brings over 27 years of mining and
processing experience. Francois will be overseeing Vametco, Vanchem
and BELCO operations.
At Bushveld Energy, we made great strides in growing the
awareness and commercial competitiveness of VRFBs as a viable
energy storage alternative. Our investment support of entities such
as Invinity and Enerox have provided these companies with a strong
base to pursue their respective growth initiatives at a time when
the world is calling for a large part of post-Covid-19 stimulus
spend to be allocated to renewables and green energy. Importantly
the rights of first refusal with Invinity and Enerox for us to
supply their batteries with our vanadium, provides a future hedge
against volatility in the vanadium price as the VRFB market
develops. In addition, we have achieved strong returns on our
investment in Invinity. Progress with our Enerox investment will be
provided in due course, which will include an update in our
ownership and strategy. We have made great progress at BELCO, we
are excited about the electrolyte rental opportunities that we are
developing, which we will update the market in due course with
further information.
Meanwhile, we have achieved and learnt so much already from our
work on the mini-grid project at Vametco, where we also welcomed
strong financing, engineering and construction partners in the
year. In addition, with regulations being relaxed for
self-generation, it allows us to investigate the scaling up of our
own self-generation solutions. We have identified energy needs of
more than 125MW of solar PV and 180MWh of battery energy storage
systems within our own facilities and in due course will unveil our
strategy around this exciting opportunity.
In summary, we have entered the new financial year on a positive
footing with the secured funding, the higher production for the
year and a rising vanadium price. While Covid-19 remains a part of
our everyday lives, we continue to concentrate on executing the
goals that are within our own hands, including: meeting our 2021
production guidance, reducing our costs and advancing the
development of vanadium redox flow batteries as a major source of
energy storage."
Conference call
Bushveld Minerals Chief Executive Officer, Fortune Mojapelo, and
Finance Director, Tanya Chikanza will host a conference call at
10:00 am UK time (12:00 am SAST) today to discuss the quarterly
update with analysts. Participants may join the call by
dialling:
Tel: United Kingdom: +44 (0) 330 336 9126; South Africa: +27 11 844 6054
Pin: 9179862
A replay of the conference call will be available on the
Company's website post the call.
Bushveld Vanadium
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, and its processing facilities consist of Vametco and
Vanchem, which are all situated in South Africa.
Group sales geographic split for 2020 was 37 per cent to the US,
25 per cent to Europe, 21 per cent to China and 17 per cent to the
rest of the World.
Q4 2020 12M 2020 Q4 2020 12M 2020 Q4 2020
Group Unit vs vs vs
Q3 2020 12M 2019 Q4 2019
Production mtV(1) 951 3,631 -6.7% 23.9% -2.7%
-------- --------- --------- --------- ---------- ---------
Sales mtV 1,268(2) 4,264(3) 34.8% 78.2% 88.4%
-------- --------- --------- --------- ---------- ---------
1. mtV = metric tonnes of vanadium.
2. Sales of 1,268 includes intercompany sales of 15 mtV.
3. Sales of 4,264 mtV includes intercompany sales of 422 mtV.
Production cash cost (C1) measure does not have any standardized
meaning prescribed by IFRS and differs from measures determined in
accordance with IFRS. This measure is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with IFRS. This measure is not necessarily indicative of net
earnings or cash flow from operating activities as determined under
IFRS.
Vametco
Table 1: Operational highlights for Vametco (on a 100%
basis)(1)
Description Q4 2020 12M Q4 2020 12M 2020 Q4 2020
Unit 2020 vs vs vs
Q3 2020 12M 2019 Q4 2019
Vanadium (Nitrovan,
FeV) produced mtV(2) 703 2,654 -3.0% -6.3% -20.1%
--------- -------- ------ --------- ---------- ---------
Vanadium sold(3) mtV(2) 907 3,333 -41.7% 39.3% 34.8%
--------- -------- ------ --------- ---------- ---------
USD/ZAR exchange
rate $=ZAR 15.6 16.5 -7.5% 13.9% 6.4%
--------- -------- ------ --------- ---------- ---------
Average selling price US$/kgV 22.2 23.4 - -52.0% -
--------- -------- ------ --------- ---------- ---------
Average LMB vanadium
price(4) US$/kgV 24.4 25.0 0.9% -39.9% 5.8%
--------- -------- ------ --------- ---------- ---------
Average CRU RN vanadium
price(4) US$/kgV 23.2 23.8 6.2% -60.0% -17.0%
--------- -------- ------ --------- ---------- ---------
Average Asian Metals
price(4) US$/kgV 22.9 24.6 -14.1% -33.2% -23.5%
--------- -------- ------ --------- ---------- ---------
Production cash cost
(C1)(5) ZAR/kgV 328 302 7.1% 15.7% 53.9%
--------- -------- ------ --------- ---------- ---------
Production cash cost
(C1)(5) US$/kgV 21.0 18.3 15.8% 1.5% 44.7%
--------- -------- ------ --------- ---------- ---------
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 3,333 mtV includes sales to customers of 2,911 mtV
and intercompany sales of 422 mtV.
4. The vanadium price is based on the FeV mid average price for
the period, published by LMB for sales to Europe, CRU Ryan's Note
("CRU RN") for sales to the United States and Asian Metals for
sales to Asia. Vametco realised price is based on the prior month's
mid average price.
5. Excludes depreciation, royalties and selling, general &
administrative expenses and cost associated with
Covid-19. Production cash cost is based on vanadium produced.
-- 12M 2020 production in the form of Nitrovan and Ferrovanadium
was 2,654 mtV, slightly below 2020 guidance of 2,700 mtV to 2,850
mtV (less than two per cent), due to lower production volumes than
expected in Q4 2020.
- In spite of the impact of the nationwide lockdown and
resultant changes in work arrangements Vametco production was just
six per cent lower than 12M 2019 production (12M 2019: 2,833
mtV).
-- Q4 2020 production of 703 mtV was 20 per cent below Q4 2019
(880 mtV) due to heavy rainfall affecting overall throughput,
incidents at the shaft furnaces due to Eskom power failures and
commissioning issues at the new kiln off-gas which have been
resolved.
-- 12M 2020 achieved a production cash cost (C1) of US$18.30/kgV
(ZAR302/kgV), which was two per cent higher than guidance of
between US$17.50/kgV and US$17.90/kgV (ZAR295/kgV and ZAR300/kgV),
mostly due to lower production volumes than expected in Q4
2020.
-- Q4 2020 production cash cost of US$21.0/kgV was 16 per cent
higher than Q3 2020 (Q3 2020: US$18.10/kgV), due to lower volumes
and increased maintenance costs as a result of an unplanned
maintenance stoppage, and a stronger ZAR:USD exchange rate during
the quarter .
-- Q4 2020 production cash cost of US$21.0/kgV was 45 percent
higher than Q4 2019 (Q4 2019: US$14.50kg/V), due to lower volumes
and increased maintenance costs as a result of an unplanned
maintenance stoppage.
-- Sold 907 mtV in Q4 2020, of which 892 mtV were final sales to
customers. The sales volume includes intercompany sales of 15 mtV
.
-- Sold 3,333 mtV in 2020, of which 2,911 mtV were final sales
to customers. The sales volume includes intercompany sales of 422
mtV.
2021 production guidance and capital expenditure
-- Production guidance of between 2,700 mtV and 2,850 mtV 2021,
an increase of up to seven per cent relative to 2020 production,
with volumes weighted towards H2 2021.
- Guidance includes expectations of a 35-day maintenance
shutdown at Vametco during Q1 2021, as well as further
debottlenecking work further down the process stream to match the
work that has already been performed at the upper end of the
plant.
-- 2021 production cash cost (C1) guidance of between
US$20.0/kgV and US$21.30/kgV (ZAR320/kgV and ZAR340/kg),
representing a nine per cent to 16 per cent increase relative to
2020.
- The increase in cost relative to 2020 is due to higher
maintenance cost to improve operational stability, increase in raw
materials and statutory electricity increase.
-- Total capital expenditure expected for 2021 of ZAR85.2
million (circa US$5.3 million), with most of the cost being
Rand-denominated includes :
- ZAR62 million (circa US$3.8 million) of sustaining capital;
- ZAR19.7 million (circa US$1.2 million) of environmental capital; and
- ZAR3.5 million (circa US$219,000) required for the Vametco
Phase III Prefeasibility study ("PFS").
Projects
-- Technical studies associated with the Vametco Phase III PFS
are progressing and are expected to conclude during H1 2021.
Details on the ramp up profile and capital expenditure will be
provided once the PFS has been completed. Metallurgical Engineering
Technology and Construction has been selected as the consulting
firm to conduct the studies.
Vanchem
Table 2: Operational highlights for Vanchem
Description Q4 2020 12M 2020 Q4 2020
Unit vs
Q3 2020
Chemicals mtV(1) 72 137 -
--------- -------- --------- ---------
Flake mtV (1) 41 418 -42%
--------- -------- --------- ---------
FeV mtV (1) 148 434 24%
--------- -------- --------- ---------
Total production(2) mtV (1) 261 990 -11%
--------- -------- --------- ---------
Chemicals mtV(1) 20 80 -44%
--------- -------- --------- ---------
Flake mtV (1) 144 408 -13%
--------- -------- --------- ---------
FeV mtV (1) 197 443 100%
--------- -------- --------- ---------
Total sales mtV 361 931 20%
--------- -------- --------- ---------
Average realised
sales price US$/kgV 21.1 21.3 -4%
--------- -------- --------- ---------
Weighted average
production cash cost
(C1)(3) ZAR/kgV 401.8 369.4 16%
--------- -------- --------- ---------
Weighted average
production cash cost(C1)(3) US$/kgV 25.7 22.4 11%
--------- -------- --------- ---------
1. mtV = metric tonnes of vanadium.
2. Includes 14mtV of ammonium metavanadate (AMV) that Vametco
sold to Vanchem for further processing into 12.8 mtV of FeV.
3. Excludes depreciation and selling, general &
administrative expenses and cost associated with Covid-19.
Production cash cost is based on vanadium produced.
-- 12M 2020 production of 990 mtV, in line with 2020 guidance of
960 mtV to 1,100 mtV.
-- Production in Q4 2020 was 261 mtV, 11 per cent lower than Q3
2020 (Q3 2020: 294 mtV) due to an unplanned maintenance stoppage
during the quarter resulting in lower production.
-- Production numbers are provided at the time of reporting,
after which, based on customer demand, chemicals and flake may be
further processed to the required finished product, which will
result in production and cost adjustments in line with the demand
profiles of the various products.
-- Given the nature of the various intermediate products that
Vanchem produces and its ability to either sell or beneficiate it
further, the weighted average production cash cost (C1) has been
further refined in order to reflect more accurately the cost of
production. This refinement will only affect the reporting based on
units produced and as a result any comparative has also been
restated.
-- 12M 2020 production cash cost (C1) of US$22.40/kgV
(ZAR369/kgV), 18 per cent higher than guidance of US$18.40/kgV and
US$19.0/kgV (ZAR310/kgV and ZAR320/kgV).
- The higher cost was due to the higher Q4 2020 costs as outlined below.
-- The weighted average production cash cost (C1) for the
quarter was US$25.70/kgV,11 per cent higher than Q3 2020 (Q3 2020:
US$23.10/kgV(1) ).
- The higher cost was due to an unplanned maintenance stoppage
which resulted to lower production volumes and higher maintenance
costs, a stronger ZAR:USD exchange rate, higher labour costs due to
one-off payments and statutory electricity increase.
- In addition, the increase in cost during the quarter was due
to higher raw materials costs as a result of test work performed
with different concentrate through the Vanchem kiln in order to
optimise process parameters for such concentrate. We have made good
progress in identifying the operating parameters required to
process this concentrate.
-- Achieved sales of 361 mtV in Q4 2020, which was 20 per cent
higher than Q3 2020 (Q3 2020: 301 mtV) and driven by increased
demand from customers supported by an increase in industrial output
in developed economies.
1. Restated production cash cost.
2021 production guidance and capital expenditure
-- Production guidance of between 1,400 mtV and 1,500 mtV 2021,
an increase of between 41 per cent and 52 per cent relative to 2020
production.
- Certain maintenance has been identified for kiln-1 at Vanchem,
however, this work is not expected to require any downtime as it is
planned to be conducted once kiln-3 has been refurbished and
brought online. Some production flexibility is provided by the
plants' three-kiln configuration, with production switching from
kiln-1 to kiln-3 while this work is ongoing underway with the
current refurbishment programme.
-- 2021 production cash cost (C1) guidance of between
US$26.20/kgV and US$26.70/kgV (ZAR419/kgV and ZAR427/kgV),
representing a 17 per cent to 19 per cent increase relative to
2020.
- The increase in cost is due to higher maintenance, labour and
raw material costs associated with the refurbishment and
commissioning of kiln-3, which is expected to be commissioned in H2
2021. The full production benefit of kiln-3 will be realised in
2022.
-- Work on the extension of the Waste Disposal Facility is on
track for completion in H1 2021. Design work on the electrical
reticulation system and storm water treatment works is expected to
commence in Q1 2021. Design work for the refurbishment of kiln-3
commenced in December 2020, with the scoping of the remaining
refurbishment being conducted in-house. Kiln-3 is expected to be
commissioned in H2 2021, resulting in a modular production
increase, subsequent to which, kiln-1 will be taken offline for
refurbishment. Scoping of the refurbishment of other areas of the
plant to cater for the kiln-3 refurbishment is in progress. Capital
expenditure expected for 2021 is approximately ZAR251 million
(circa US$15.7 million), with most of the cost being
Rand-denominated.
Mokopane
-- Mokopane is one of the world's largest primary vanadium
resources, with a 298 Mt JORC compliant resource and a weighted
average V(2) O(5) grade of 1.41 per cent in-situ and 1.75 per cent
in magnetite.
-- Mokopane is positioned to become a primary source of
feedstock for Vanchem, creating a fully integrated vanadium
producing business in a shorter time frame and at a lower cost, as
opposed to a standalone operation.
-- A definitive feasibility study ("DFS") to mine the Main
Magnetite Layer, to provide a resources and reserves assessment
with a focus on Mokopane as a primary feedstock supplier to Vanchem
will be commenced in 2021. The estimated capital expenditure for
the DFS is ZAR40 million (circa US$ 2.5 million)
-- As previously reported, Vanchem has sufficient ore supply to
support current levels of production until H1 2021. As part of its
options, the Company retains the optionality to supply magnetite
concentrates from Vametco to the Vanchem Plant.
Bushveld Energy
Bushveld Electrolyte Company ("BELCO")
-- BELCO's EPC process started in H1 2020 and the engineering
phase of the vanadium electrolyte plant was completed in Q4 2020.
The procurement process will commence in Q1 2021 followed by
construction.
Investments - Enerox and Invinity
-- Invinity value realisation
During Q4 2020 and post period end the Company sold a portion of
its holding in Invinity on the open market for circa US$4 million,
this recoups most of Bushveld's original US$5 million investment.
The proceeds from the sale will be used to fund some of Bushveld
Energy's initiatives, including Vanadium Electrolyte Rental Limited
("VERL"), the partnership established with Invinity to rent
vanadium electrolyte, and its right of first refusal to supply
vanadium and vanadium electrolyte. Bushveld's shareholding
currently exceeds five per cent.
-- Enerox GmbH
In Q3 2020, the Company successfully completed the acquisition
by Enerox Holdings Limited ("EHL") of a further 65.1 per cent of
the share capital of Enerox. EHL is an investment vehicle formed by
a consortium of investors, including Bushveld Energy Limited. On 31
December 2020, EHL owned 100 per cent of Enerox, with Bushveld
Energy a minority shareholder in EHL. Under a separate agreement
Bushveld secured a right of first refusal to supply vanadium oxide,
vanadium electrolyte and vanadium electrolyte rental products to
Enerox.
Deployments
-- In Q4 2020, the Company received environmental authorisation
and awarded the EPC for the construction of a hybrid mini-grid at
Vametco. Enerox GmbH ("Enerox") will supply the 1MW / 4MWh Vanadium
Redox Flow Battery ("VRFB") for the project and Abengoa will manage
the EPC of the project, including the integration of 3.5 MW of
solar PV. The engineering phase for the project commenced in 2020,
with financial close and procurement as the next priorities.
Construction is planned to commence during the course of 2021.
-- Progress self-generation options for all of Bushveld's
existing and future electrical energy needs. Existing aggregate
loads of 21MW are expected to increase to over 50MW post completion
of expansion and refurbishment programmes. This need equates to
potentially more than 125MW of solar PV and 180MWh of battery
energy storage systems within our facilities.
Additional Bushveld Energy priorities
-- Scale up the vanadium electrolyte rental product with new
contracts.
-- Continue to support and collaborate with global VRFBs
manufacturers as per Bushveld Energy's VRFB OEM partnership
strategy.
2021 Capital Expenditure
-- Bushveld Energy's 2021 Capital Expenditure is budgeted to be
ZAR152 million (circa US $ 9.5million ) . The majority of this
budget will be covered by partial sales of existing Bushveld Energy
assets, with most of the planned sales for 2021 already completed
with the partial sale of the Company's holding in Invinity. The
capital expenditure will be used on the following projects and
initiatives :
- Bushveld's share of BELCO procurement and construction costs;
- Scaling the electrolyte rental product, including the rental
contract with Pivot Power, in the UK through the VERL and the
rental contract for the Vametco Mini-grid;
- Development of energy self-generation and storage solutions
for Bushveld Minerals' operating facilities through Bushveld
Energy's deployment business, including Bushveld's share in the
equity portion of financing for the Vametco mini-grid project,
which is structured as an Independent Power Producer ("IPP");
and
- Supporting and funding the growth of Enerox, together with the
other shareholders of EHL, providing the business with growth
working capital to capitalise on the rapidly growing global energy
storage market.
Corporate Developments
Organisational changes
-- As part of the Company's initiatives to improve operational
performance, Francois Naude has been appointed as Director of
Operations (non-board), overseeing Vametco, Vanchem and BELCO.
Francois brings 27 years of mining and processing experience, most
recently as Director of Operations at Vedanta Resources and General
Manager at AngloGold Ashanti. Francois will be joining the
Executive Committee and will report to the CEO.
-- With these organisational changes and secured funding, the
Group is equipped to achieve its operational targets and advance
the Vametco Phase III expansion project and the Vanchem Phase I
refurbishment programme. These initiatives will ensure that
Bushveld remains competitive, even at low vanadium prices, and can
fully exploit the benefits of higher prices.
-- Post quarter end, the Company received the unfortunate news
of the passing of Ms Dolly Mokgatle an independent non-executive
director. Once again, the Board extends its deepest condolences and
sympathies to Ms Mokgatle's family. The Company will commence the
search for a new independent non-executive director in due
course.
Funding and Capital Structure
On 30 November 2020, the Company announced it had met all the
outstanding conditions in respect to the US$65 million funding
package with Orion Mine Finance and had given notice to drawdown on
the funds, which were received in December 2020. The use of
proceeds was as follows:
-- US$5 million to partially repay the US$23.5 million
convertible Loan Note owned by Duferco, (the previous owner of
Vanchem). This was paid in December 2020, in addition, Duferco
converted US$6.5 million into Bushveld shares. The outstanding
convertible amount of US$11.5 million is due for repayment on 8
November 2021.
-- ZAR250 million (circa US$15.7 million) to retire the Nedbank
term loan. This was repaid in December 2020, although the Group has
retained the ZAR125 million revolving credit facility.
-- US$24 million to complete Phase III of Vametco's expansion
project and enable Vametco to attain a production greater than
4,200 mtV per annum.
-- US$20.3 million towards Phase I of Vanchem's refurbishment
programme.
Covid-19 update
-- On 28 December 2020, the South African government moved the
country to adjusted Level 3 lockdown restriction measures, to curb
the rising spread of the Covid-19 virus, however, allowing the
majority of the economy to operate with some restrictions.
-- We continue to adhere to the South African health authority
protocols in dealing with the pandemic and follow the Covid-19
safety protocols that we implemented at our operations. Since the
start of the pandemic, we have had 105 positive cases and sadly two
deaths among our workforce. The current number of active cases is
13. We maintain vigilance to ensure our operations are not
disrupted.
Vanadium and VRFB Markets and outlook
-- The robust vanadium demand and rising prices seen at the end
of 2020 have continued in 2021 across all key markets. The recovery
is driven by higher steel mill capacity utilisation rates and low
warehouse stocks. We expect prices to remain robust for the rest of
Q1 2021.
-- An increase in momentum for vanadium redox flow batteries
remained unaffected during the year, with increased deployment of
VRFBs, mostly in China. Demand is expected to rise as governments
continue to accelerate the energy transition to a low-carbon energy
future, increasing potential demand for renewable energy generation
and energy storage. Below are some recent announcements.
- Saudi Arabia is developing a domestic vanadium-based energy
storage supply chain through a memorandum of understanding and the
JV between VRFB OEM Schmid and Nusaned Investment, ultimately held
by Saudi Aramco, in drawing a feasibility study of building a
facility to recover vanadium. The vanadium produced by the project
can be used for grid-stabilization batteries which will facilitate
a more efficient use of renewable energy.
- In China, phase I (7.5MWh) of ESJ Electric's all-vanadium
redox battery energy storage power station in Aksu Prefecture,
successfully completed grid connection. This is its largest
all-vanadium redox battery photovoltaic energy storage project.
- In the U.S. utilities are poised to benefit more from "Green
Deal" type policies , under President Joe Biden administration,
which are more bullish on including clean energy provisions in a
future stimulus package as it improves the environment for green
investments.
- Invinity Energy Systems announced sales totaling 18.6 MWh during 2020.
-- The 2021 year to date average vanadium price is US$27/kgV
London metal bulletin, US$30/kgV Asia Metals and US$27/kgV for CRU
Ryan's Note as at 29 January 2021.
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 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
Richard Morrison / Charlie
Bouverat
Abigail Wayne / Richard Parlons
+44 (0) 20 7236
BMO Capital Markets Limited Joint Broker 1010
Tom Rider
+44 (0) 20 7418
Peel Hunt Limited Joint Broker 8900
Ross Allister / Alexander
Allen
Tavistock Financial PR
Charles Vivian / Gareth Tredway
/ +44 (0) 207 920
Edward Lee 3150
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; 100 per cent of
Bushveld Vanchem, a primary vanadium processing facility with a
beneficiation plant; 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. 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.
Bushveld Energy, the Company's energy storage solutions provider,
plays a leading role in the development and promotion of the role
of vanadium in this market.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they may be
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 mostly Nitrovan , 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 mix plant and
finally into the shaft furnaces to produce Nitrovan.
About Vanchem
Vanchem is situated at Ferrobank Industrial Park in Emalahleni
Local Municipality, Mpumalanga Province in the Republic of South
Africa. Vanchem is a primary vanadium producing facility with a
beneficiation plant capable of producing various vanadium oxides,
ferrovanadium and vanadium chemicals. Vanchem uses the salt roast
beneficiation process, similar to the one used at Vametco. The
plant comprises: a core salt-roast processing plant, including 3
roasting kilns, an electric smelting ferrovanadium converter, an
alumino-thermic smelting facility, also located at Highveld, a
vanadium chemical plant; and a rail siding linking the plant with
Bushveld deposits and additional potential supply sources through
the national rail network.
About Bushveld Energy Limited
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that the
requirement for electricity in Africa touches on both the paramount
potential for social transformation and an immense commercial
opportunity.
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, meeting the demand for utility scale energy storage in
Africa by leveraging South Africa-mined and beneficiated vanadium.
As part of its strategy of partnering with VRFB Original Equipment
Manufacturers ("OEM") for the supply of vanadium material, vanadium
electrolyte and vanadium electrolyte rental products, the Company
is invested in Invinity Energy Systems Plc and Enerox GmbH. In
addition, Bushveld Energy is developing its own hybrid mini-grid at
the Vametco vanadium mine comprising 3.5 megawatts of solar
photovoltaic and 4 megawatt hours of VRFB energy storage. In
addition, Bushveld Energy has developed a vanadium electrolyte
plant in partnership with the Industrial Development Corporation,
with an initial 200 megawatt hours capacity, in East London, South
Africa. The Company has also created and rolled out an innovative
vanadium electrolyte rental product that reduces costs of VRFBs and
introduces vanadium into the circular economy.
http://www.bushveldenergy.com
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDQVLBBFLLEBBE
(END) Dow Jones Newswires
February 08, 2021 02:00 ET (07:00 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