[Ferro-Alloys.com] Bushveld Minerals Ld - Q1 2024 Operational & Corporate Update

Bushveld Minerals Limited (AIM: BMN), the primary vanadium producer, is pleased to announce an operational update for the three months ending 31 March 2024, along with a statement regarding the Company's working capital position. 

Group highlights

Q1 2024

Q1 2024 production of 855 mtV (Q1 2023: 943 mtV).

-     Vanchem achieved a record quarterly production of 498 mtV.

-     Vanchem attained a record monthly production of 200 mtV in March 2024.

Q1 2024 weighted average production cash cost¹ (C1) of US$28.4/kgV (Q1 2023: US$25.9).

Q1 2024 sales of 880 mtV (Q1 2023: 1,028 mtV).

Q1 2024 Total Recordable Injury Frequency Rate ("TRIFR") of 0.00 (Q1 2023: 3.67).

1.     Weighted average production cash cost (C1) is the blended weighted average production cash cost (C1) of Vametco and Vanchem, divided by Group production.

CORPORATE

Update on Outstanding Funds

 As previously announced, Acacia Resources Limited ("Acacia") was due to settle its subscription of US$3.5 million on or before 28 February 2024. The Company has not to date received the subscription monies from Acacia. Acacia is in breach of the terms of the subscription letter which it signed with the Company on 30 November 2023. The Company has instructed its lawyers to commence legal proceedings against Acacia.  

Update on Sale of a 50% interest in Vanchem and 64% interest in Mokopane to SPR

·      Following the announcement on 20 November 2023, regarding the sale of a 50% interest in the Vanchem vanadium processing plant for US$21.3 million and the sale of a 64% interest in a subsidiary that owns the Mokopane Vanadium project for US$3.7 million, the Company hereby announces that approval from the South African Competition Tribunal, initially anticipated for February 2024, is now expected to be granted at the earliest in July 2024. Following this, the sale of Vanchem and Mokopane will complete.

Working capital position

§ Due to the delay in receiving funds from Acacia and SPR, production has been materially adversely affected in the current quarter, particularly at Vametco. Coupled with notably weaker vanadium prices (declining between 10 and 17% year to date across different markets), the Company's working capital position is extremely tight. With the completion of the sale of 50% of Vanchem and its share of Mokopane to SPR being delayed, the Company is dependent on receipt of further funding to continue operations and is working with its stakeholders in this regard. The Group's cash balance as at 21 April 2024 was US$2.22 million, should further funding not be secured in the coming weeks, the Company may have to suspend operations.

Craig Coltman, CEO of Bushveld Minerals Limited, commented: 

"I am delighted to share that Vanchem achieved a record quarterly production and monthly production in March. The reduction in unit cash costs by approximately 25% at Vanchem, along with a near doubling in production relative to Q1 2023, demonstrates the success of our initial turnaround measures. This achievement is noteworthy despite the setback of losing 11 days of production in January due to the delayed settlement of funds.

Moving on to Vametco, as previously communicated, during the quarter we conducted a 25-day planned maintenance shutdown, which was completed in mid-February.

Notwithstanding the operational developments achieved to date, the delay in payments, coupled with the weaker realised Vanadium prices, now 15% lower than budgeted, has meant that our working capital position is extremely tight. However, we continue to engage with all stakeholders to resolve this issue. Lastly, we will provide 2024 guidance once we have clarity on the funding position." 

BUSHVELD VANADIUM

1.     Based on provisional, unaudited figures.

2.     mtV = metric tonnes of vanadium.

3.     Reported as final sales to customers.

VAMETCO

Operational highlights for Vametco (on a 100% basis)

1.     Based on provisional, unaudited figures. Production cash cost is based on vanadium produced.

2.     mtV = metric tonnes of vanadium.

3.     Excludes depreciation, royalties and selling, general & administrative expenses. Production cash cost is based on vanadium produced. 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. 

Production

§ Q1 2024 production of 357 mtV (Q1 2023: 682 mtV; Q4 2023: 589 mtV), mostly due to a planned 25-day Kiln maintenance shutdown during the months of January and February.

§ A further 10-day maintenance shutdown is expected in Q3 2024.

Costs

§ Q1 2024 production cash cost (C1) of US$32.8/kgV (Q1 2023: US$22.8/kgV; Q4 2023: US$26.4/kgV), mostly impacted by lower production volumes during the period, as a result of the planned maintenance.

VANCHEM

Operational highlights for Vanchem¹

 1.     Based on provisional, unaudited figures.

2.     mtV = metric tonnes of vanadium.

3.     Excludes depreciation, royalties and selling, general & administrative expenses. Production cash cost is based on vanadium produced. 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. 

Production

§ Vanchem achieved a record quarterly production of 498 mtV (Q1 2023: 261 mtV; Q4 2023: 336 mtV), underpinned by improved ore quality, improved online time and overall plant efficiencies.

-     Vanchem achieved a record monthly production of 200 mtV in March 2024.

§ Annual 23-day maintenance shutdown expected in May 2024.

Costs

Vanchem achieved a production cash cost (C1) of US$25.3/kgV (Q1 2023: US$34.1/kgV; Q4 2023: US$26.8/kgV), supported by higher production volumes during the quarter and cost savings initiatives.

-     Vanchem attained a monthly production cash cost (C1) of US$19.3/kgV in March 2024.

HEALTHY AND SAFETY

§ Q1 2024 TRIFR  of 0.00 (Q1 2023: 3.67),  supported by improved reporting of leading indicators analysed and implementation of safety measures.

VANADIUM PRICE & MARKET

Q1 2024 CRU Ryan's Notes (US) Ferrovanadium prices averaged US$28.4/kgV, showing a decline from US$31.6/kgV achieved in Q4 2023. London Metal Bulletin ("LMB") (Europe) and Asian Metals ("AM") (Asia) averaged US$27.9/kgV and US$24.1/kgV respectively, with LMB marginally improving from US$26.6/kgV whilst AM remained unchanged when compared to US$24.2/kgV in Q4 2023.

Sales into the higher value markets (aerospace application, speciality alloy and chemicals) and higher price markets (Nitro Vanadium in North America) continue to be prioritised.

• [Editor:tianyawei]