Bushveld Minerals Limited (LON:BMN)

Bushveld Minerals Limited (LON:BMN)

Share Price
22.80 p
-0.6 (-2.56 %)
Market Cap
£255.15 m
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Bushveld Minerals Limited

Bushveld Minerals is a low cost, vertically integrated primary vanadium producer, with ownership of high-grade assets, supplying over three per cent of the global vanadium market. Bushveld Minerals is one of only three producing primary vanadium operations in the world. The Company is also involved in the development and promotion of Vanadium Redox Flow Batteries (“VRFBs”) in the growing...

Market: LSE:BMN
52-week High/Low: 49.40p / 18.66p
Sector: General Mining [T3]
Market Cap: £255.15 m
Website: www.bushveldminerals.com
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Big Picture – A Deep Dive Examination of Bushveld Minerals Limited

Bushveld Minerals Limited Snapshot

Bushveld Minerals Project Philosophy

4 Principles, Critical to Success
Bushveld Minerals’ approach to project development rests on four principles, all of which are critical to the Company’s success. The approach recognises the need for commodities with a sound economic outlook, scalable low cost, high quality projects with a clear path to production and cash flow generation. This philosophy is core to the Company’s strategy in developing projects and creating attractive returns for our shareholders.


1.  The Right Commodity

We adopt a rigorous approach in analysing market dynamics for each of our chosen commodities to understand industry structure, current and future supply/demand balance and implications for the underlying price. Vanadium is in a structural deficit, with limited supply and a growing demand. The vanadium supply deficit has resulted in an average price increase of approximately 77 per cent relative to the prior year. The growing deficit presents itself as an opportunity for existing primary vanadium producers who are able to increase production.


2.  Low Cost Curve Position

A low cost curve position acts as a natural hedge against commodity price fluctuation, ensuring healthy average margins and protection against price downswings. The Company’s vanadium assets are either positioned in the first quartile or show the potential for first or second quartile cost positioning. Vametco, the Company’s flagship asset is one of the lowest cost primary producers while enjoying some of the highest grades. The Company’s strategy is for the assets to be in a position of generating cash in every phase of the commodity cycle.


3.  A Clear Path to Achieving Production
The path to production is, in part, a function of project capital requirements and complexity of development.
We look to develop projects where we have visibility to production and cash flow generation. We therefore target brownfield processing assets that can be acquired at a fraction of their replacement cost or develop greenfield projects that have a low up-front capital expenditure and are scalable. A clear example of this was the acquisition of Vametco which was acquired for significantly less than its new replacement cost, which is in excess of US$200 million.


4.  Scalability

We have the opportunities to debottleneck and optimise our long-life assets to grow production with a minimum capital expenditure spend. Vametco is currently undergoing an expansion project that will increase its production capacity to 5,000 mtV by 2019. In addition, the Company has expressed its intentions of growing its production platform to more than 10,000 mtV in the medium term.

Investment Case

“Bushveld Minerals is one of only three operational primary vanadium producers, and one of only two vanadium focused pure-play companies in the world.”

Attractive commodity market fundamentals

  • By far the best performing commodity price since 2016, the vanadium price has seen cumulative increases in excess of 350 per cent over the period as a consequence of a significant structural deficit, driven by robust and growing demand in the context of a concentrated and constrained supply with limited new production in the horizon;
  • Vanadium demand is anchored in the steel sector, which continues to underwrite vanadium demand as vanadium consumption in steel grows globally, while applications in energy storage sector provide step change upside;
  • Supply response has been slow, with production reductions of as much as 10 per cent between 2014 and 2016. The majority of projects under development are coproduction pig-iron/steel plants designed to produce vanadium as a co-product. They have significant grade and capital expenditure constraints to overcome.

Management Team

  • The management in place in the Company’s subsidiaries are highly experienced operators in the commodities they are focused on. Vametco’s team, for example, combines more than 100 years’ experience in vanadium mining and processing.

Quality Vanadium Assets

  • The Company’s asset portfolio comprises large, high grade open cast deposits, combined with low cost, scalable processing capacity to give it a low cost production profile and first quartile cost curve positioning.
  • Primary vanadium grades of 1.75 per cent – 2.0 per cent V2O5 are among the highest in the world.
  • Current life of mine production profile accounts for less than five per cent of the Company’s resource base with extensive exploration upside.


  • Bushveld is committed to high standards of corporate governance and social responsibility.
  • The Company continuously reviews its governance policies and is committed to improving its practices over time.
  • The Company considers corporate social responsibility a fundamental part of Bushveld’s business imperatives and seek meaningful and deep partnerships with its multiple stakeholders.

Brownfield Infrastructure

  • The Company’s deposits exist in close proximity to brownfield processing and logistics infrastructure creating scope for low capex and quick scale-up of production capacity.
  • The acquisition consideration of Vametco, at US$16.5 million, represented less than 10% of replacement value and allowed Bushveld immediate access to production capacity.

Shareholder Return

  • Bushveld is committed to delivering attractive returns to its shareholders. During the second half of 2018, the Company will define a capital allocation framework, which will outline the Company’s approach towards shareholder returns, including a dividend policy designed to encourage capital efficiency, to support the Company’s growth initiatives while simultaneously rewarding investors.

Vertical Integration

  • Bushveld’s deep vertical integration, anchored in a high quality low cost production base allows the Company to play a key enabling role in the multibillion dollar energy storage industry.
  • This strategy is key to not only strengthening the vanadium demand profile, it also unlocks significant economic opportunities for the Company along the vanadium value chain.





The Bushveld P-Q Iron & Titanium Project

The Bushveld P-Q Iron & Titanium Project (”P-Q Project”) is a multi-commodity project located 45 km north-northwest of Mokopane town in Limpopo Province, South Africa. The project hosts a JORC compliant 939 Mt vanadiferous titano-magnetite deposit (the P-Q VTM deposit) contained in a layered ore body of average 45 m thickness, along a strike of ~8 km and dipping at 18-22° to the west.

The resource, with average grades of 33% Fe, 11% TiO2 and 0.19% V2O5, can be beneficiated by simple magnetic separation at grind fraction of 500µm to produce a concentrate grading 55% Fe, 19.5% TiO2, 0.33% V2O5, with >85% recoveries. It also consists of high grade zones of up to 20m with average Fe grades of 40% Fe, 15% TiO2 which can be upgraded to 50% Fe, 18.5% TiO2 through a dense media separation process applied on a 6mm grind fraction. A key attraction of the deposit is the high TiO2 grade of its concentrate, which creates scope for economic extraction of TiO2 from a high TiO2 grading slag after smelting. Test-work and modeling work conducted on the ore showed scope for a >50% TiO2 slag after smelting.

For more information, please click here

The Bushveld Vanadium Project

The Bushveld Vanadium Project is a world-class vanadium project boasting some of the best in-situ (1.48% V2O5) and in-concentrate (2.01% V2O5) vanadium grades in the world. The deposit is based on the same license area as the P-Q Iron & Titanium Project and is a layered orebody along a north-south strike and dipping at 18-22° to the west running 2 km to the east and parallel to the P-Q Iron & Titanium Project resouce.

The Bushveld Vanadium project comprises three adjacent and parallel magnetite layers – the MML layer, the MML-Hanging wall layer and the AB Zone, with JORC resource delinieated on the MML (52Mt at 45% Fe, 1.48% V2O5, 9.7% TiO2) and the MML Hanging Wall (69Mt at 29% Fe, 0.80% V2O5, 11.9% TiO2)

The Company envisages utilizing the salt roast processing flowsheet, which, with at least three operating plants processing similar ores in South Africa, is proven and well understood. A recently completed (July 2014) scoping study focussing on the MML only confirms attractive economics for the project with a modest capital expenditure requirements of US$262 million for a primary vanadium production plant producing 10,350 tons 99% V2O5 per annum from a 1 Mtpa Run-of-Mine open pit operation. The project shows a pre-tax NPV (at 10% discount rate) of US$562 million and an IRR of 36% while the numbers on a post tax basis are US$236 million and 24%. The project is well placed to be a low first quartile producer of vanadium with a cost of US$5.99/kg V2O5.

The Bushveld Vanadium project is located in an important vanadium-producing region, responsible for 26% of the world’s vanadium supply.

The project will also benefit from growing vanadium demand (estimated at ~6% pa by Roskill), underpinned by the steel sector, which accounts for 90% of vanadium consumption globally. The application of vanadium in energy storage, for example in Vanadium Redox Flow batteries which are fast gaining momentum, could create substantial demand growth for vanadium going forward.

For more information, please click here



The Mokopane Tin Project

The Mokopane Tin Project is a brownfields tin project containing 18,447 tonnes of tin with an average grade of 0.12% tin (Sn) on two adjacent deposits. It is situated on the Northern Limb of the Bushveld Complex and consists of one prospecting right (2205 PR), covering six farms with an area of approximately 13,422 ha. Within the licence area, numerous targets for open-castable disseminated tin resources have been identified, and the Company has explored and drilled two of the targets, Groenfontein and Zaaiplaats, upon which a scoping study was based and the results released in September 2014.

The scoping study incorporated a simple process design based on closed circuit multi-stage gravity separation, followed by small-scale flotation and electrostatic separation, and smelting to produce a high-purity metal. The Base Case scenario is of a 691 ktpa ROM operation producing ~700 tpa of 99.5% tin metal from 1,380 tpa of 51.4% concentrate. The required capital expenditure is low at US$16.7 million and the economics of the Project are positive showing a pre-tax NPV of US$18.0 million and post-tax NPV of US$10.0 million, as well as a pre-tax IRR of 49.8% and post-tax IRR of 34.6%.

The tin market is supported by strong fundamentals, with increasing demand and strong prices supported by a supply deficit that is expected to continue into the foreseeable future.

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The Marble Hall Tin Project

Located in the Bushveld Complex, the Marble Hall Tin Project is a brownfields tin project that was historically explored by Goldfield’s in the 1980’s. Mineralisation occurs in a 1 m to 7 m thick breccia zone, and a number of boreholes have intersected significant instances of this mineralization at relatively shallow depths (<200 m). Bushveld Minerals’ technical team estimates, based on reinterpretation of Goldfields data (including historical drilling data), that there is a potential resource of up to 18,000 tonnes of contained tin at ~0.5% Sn from 3.6 million tonnes of ore.

A JORC-compliant resource is anticipated to be defined in 2015.




Lemur Resources' Imaloto Coal Project

Lemur Resources is an ASX-listed coal development company in which Bushveld Minerals holds a 57.21% majority shareholding. Lemur’s flagship project is the Imaloto Coal Project that is based in South West Madagascar. It is one of only three coal companies exploring in Madagascar, and contains a significant thermal coal resource of 136 Mt with 91.6 Mt in the Measured category.

A scoping study for the Imaloto Coal Project was released in September 2013 and showed a positive post-tax NPV of US$36 million, based on low initial capital expenditure of $12 million. There is scope for opencast mining in the first eight years of operations out of a total life-of-mine of 19 years.

Negotiations are currently underway to obtain an Independent Power Producer’s (IPP) licence that would allow Lemur to supply enough power for its operations as well as other mines in South West Madagascar. An MOU has been signed with Jirama, the Madagascan Government’s state-owned electricity company responsible for the production, transport and distribution of electricity in Madagascar.

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Ian trained as a mining engineer and has considerable experience in the South African mining sector. He is a professional engineer and a member of the Engineering council of South Africa. His previous roles include Managing Director of Northam Platinum, CEO of Platmin Limited, CEO of International Ferro Metals (SA) and Consulting Engineer at Gold Fields of South Africa Limited. Ian is chairman of the Audit, Nominations and Disclosure Committees and a member of the Remuneration Committee.

Fortune is a mining entrepreneur and founding shareholder of VM Investment Company (Proprietary) Ltd, a principal investments and advisory company focusing on mining projects in Africa. He has played a leading role in the origination, establishment and project development of several junior mining companies in Africa. Fortune graduated from the University of Cape Town with a BSc (Actuarial Science). He was previously at McKinsey & Company where he worked as a strategy consultant on corporate strategy and organisational development in several sectors in South Africa and Nigeria. Fortune is a member of the Nominations and Disclosure Committees and attends the Remuneration Committee by invitation.

Geoff is a chartered accountant with experience spanning over 40 years in numerous financial management roles. Prior to joining Bushveld Minerals Geoff was a partner at Deloitte and Touche.

Jeremy has a BA LLB from the University of Cape Town and practiced as an attorney after completing his Articles in Cape Town. He joined Old Mutual as a legal advisor and in 1993 established McCreedy Friedlander, which became one of the premier property agencies in South Africa, and negotiated an association with Savills. In 1998 he listed McCreedy Friedlander as part of a financial services group on the JSE and shortly afterwards relocated to London. In the United Kingdom, Jeremy has been involved in a number of property transactions. More recently Jeremy was a director of Onslow Resources (oil and gas in Namibia and Yemen). He is business development director of a number of Avana companies involved in uranium, coal, gold, oil and gas and industrial minerals. During the past six years, he has been involved in the establishment of a number of natural resource projects predominantly in Africa and South America. Jeremy is a member of  the Audit, Remuneration and Disclosure Committees.

Michael is currently chairman of corporate advisory firm Ondra LLP and also serves on the Board of AngloGold Ashanti Limited. Previously he was chairman of Circle Holdings plc (2011-17) and has served on the boards of UK Financial Investments (2009-14), Eros International plc (2012-14), Kidde plc (2000-05) and as Deputy Chairman of the PricewaterhouseCoopers Advisory Board (2008-11). Mr Kirkwood retired in 2008 after a distinguished 31-year career with Citigroup, latterly as UK chairman. In his early career he worked at HSBC and subsequently in Asia with the Ralli-Bowater Group. During his career Mr Kirkwood has held appointments as president of the Chartered Institute of Bankers, deputy chairman of the British Bankers Association, and as inaugural chairman of British-American Business among several other honorary appointments in the financial services sector. He was appointed a Companion of the Order of St Michael and St George (CMG) in the Queen’s Birthday Honours in 2003. Mr Kirkwood is a graduate of Stanford University in California. Michael is the chairman of the Remuneration Committee and a member of the Nomination Committee.

Anthony is a mining entrepreneur and founding shareholder and director of VM Investment Company (Proprietary) Ltd, a principal investments and advisory company focusing in mining. He has been involved in the establishment and project development of a number of junior mining companies across Africa. Anthony graduated from the University of Natal with a Bachelor of Business and Agricultural Economics and a Post Graduate Diploma in Finance Banking and Investment Management. Anthony previously worked at Deutsche Bank, Barclays Capital in London and Loita Capital Partners.


Shareholder Information

Total shares in issue: 1,119,727,953 (this is inclusive of 670,000 shares held in treasury)

Top 10 shareholders as at 31 May 2019

1 Hargreaves Lansdown Asset Mgt 192,042,561 17.15
2 Halifax Share Dealing 112,066,528 10.01
3 Interactive Investor 108,646,640 9.70
4 Acacia Resources 70,598,644 6.30
5 Yellow Dragon Holdings 67,832,778 6.06
6 Golden Summit International 65,000,000 5.80
7 A J Bell Securities 37,715,160 3.37
8 Equiniti Financial Services 33,542,040 3.00
9 Barclays Wealth 32,882,365 2.94
10 Bushveld Minerals Ltd Director & Related Holding(s) 31,731,667 2.83

In accordance with the AIM Rules (Rule 26), in so far as the Company is aware, the percentage of the Company’s voting rights that is not in public hands is 2.89% as at 31 May 2019.


Office Address

Registered Office
| 18-20 Le Pollet, St Peter Port, Guernsey

Principal Operating Address | 5 Harries Road

Illovo Edge Office Park

2nd Floor, Illovo 2196, South Africa

Tel. +27 (0)11 268 6555
Fax. +27(0) 11 268 5170
Email. [email protected]


18-20 Le Pollet

St Peters Port

Guernsey GY1 1WH


2nd Floor, Building 3

Illovo Edge Office Park 5 Harries Road,

Illovo, Johannesburg, 2116, South Africa


SP Angel Corporate Finance LLP

Prince Frederick House 35-39 Maddox Street

London W1S 2PP


BMO Capital Markets Limited

95 Queen Victoria Street

London, EC4V 4HG


Alternative Resource Capital LLP,

8-10 Hill Street,

London, W1J 5NQ


Gowling WLG (UK) LLP

4 More London Riverside

London SE1 2AU


Carey Olsen, Carey House

Les Banques

St Peter Port, Guernsey GY1 4BZ


Edward Nathan Sonnenbergs

150 West Street, Sandown, Sandton

Johannesburg 2196, South Africa

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