08:00 Wed 15 May 2019
Bushveld Minerals Ld - Bushveld Vanadium Q1 2019 Operational Update
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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.
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Bushveld Vanadium Q1 2019 Operational Update
Key Highlights
· Vametco's production for Q1 2019 was 649 mtV in the form of NitrovanTM from magnetite concentrate, which was consistent with Q4 2018 (Q4 2018: 657 mtV).
· During Q1 2019 the Company commenced several productivity initiatives which were identified as part of the transformation programme announced on
· Vametco has seen an improvement in mine production scheduling, vanadium grade in kiln feed, together with an increase in the hourly feed rate to the kiln and recovery. In addition, overall plant recovery has seen significant improvements.
§ These improvements resulted in production for
· Vametco production guidance of 2,800 mtV to 2,900 mtV is expected for the 2019 calendar year, supported by improved operating performance, representing a 9 to 13 per cent increase relative to 2018 production (2018: 2,560 mtV).
· Unit production cost of
· Production volumes are expected to be skewed towards the second half of the year, due to a 24 day planned maintenance programme during the months of June and July.
· Vametco's production was not affected by recent power rationing implemented by Eskom, the South African national utility, during the month of March.
·
· An updated Mineral Reserve and Resource Estimate for Vametco will be published once the final stages of review have been completed.
· The sample analysis results for the 10 boreholes from the second phase of exploration drilling at Brits (BVL009-BVL019, excluding BVL018) received in
§ The positive results and high grades demonstrate the deposit's ability to be a future source of raw material for the Vametco plant and concentrate feed for Vanchem if required.
§ The Maiden Mineral Resource Estimate for Brits is expected in Q2 2019.
Fortune Mojapelo, CEO of
"We ended the quarter on a very strong note, with the best monthly production output from Vametco in more than 21 months. This reflects the initial work completed under the Transformation Programme, announced earlier this year, which resulted in improvements in several key areas of the flow sheet, including scheduling, feed grade and overall plant recoveries.
"Furthermore, as part of the Transformation Programme we have undertaken several changes within the leadership team at Vametco, including the appointment of
"As the Company's revenue and earnings generator and thus engine for growth it is imperative that Vametco operates to its full potential. It is for this reason that we initiated the Transformation Programme, designed to ensure that we maximise production throughput, minimise costs on the back of the improvements implemented by our motivated and fully engaged workforce.
"We are pleased to provide 2019 production guidance for Vametco of 2,800 mtV to 2,900 mtV, which reflects continued expected improvements under the Transformation Programme and represents an overall production increase of between 9 and 13 per cent on the previous year. This does not include any contribution from the proposed acquisition of the Vanchem plant, which we anticipate to complete as soon as July and no later than October.
"We are confident of steadily delivering on Vametco's productivity targets and, with the recently announced conditional acquisition of the Vanchem vanadium project for
Table 1: Operational highlights for Vametco (on a 100% basis)1
Description |
Unit |
Q1 CY19 |
Q1 CY19 |
Q1 CY19 |
Vanadium (NitrovanTM plus FeV) produced |
mtV3 |
649 |
-1.2% |
-11.1% |
Vanadium sold |
mtV3 |
508 |
-13.4% |
-26.5% |
Average MB vanadium price2 |
US$/KgV |
73.3 |
-32.1% |
+18.7% |
USD/ZAR average exchange rate4 |
US$:ZAR |
14.0 |
-1.8% |
+17.3% |
Underlying production costs5 |
ZAR/kgV |
260.8 |
+1.8% |
+12.7% |
Underlying production costs5 |
US$/kgV |
18.6 |
+3.6% |
-3.9% |
1. Based on provisional, unaudited estimates. Bushveld's net attributable interest of the above production and financials was 59.1% as at
2. The vanadium price is based on the FeV mid average price for the period, published by Metal Bulletin. Vametco realised price is based on the prior month's average price.
3. mtV = metric tonnes of vanadium.
4. Source: Bloomberg. The achieved USD/ZAR average exchange rate may vary.
5. Excludes depreciation, royalties, selling, general, & administrative expenses.
Vametco Transformation Programme
Following the Vametco diagnostic review in the last quarter of 2018, an implementation delivery office headed by the Chief Transformational Officer, has been created and several improvement initiatives have been initiated. These initiatives will support Vametco in achieving a steady state production rate of 3,400 mtV during the course of 2020, which represents 90 per cent of the 3,750 mtVp.a. name plate capacity of Phase 2 of the multi-phase expansion project, for no additional capital expenditure requirement. These initiatives include:
o Improving mine production scheduling to stabilise vanadium grade in run of mine ore and concentrate;
o Increasing crusher and mill availability and throughput rates which will increase concentrate production;
o Increasing kiln availability, hourly feed rate and recoveries;
o Improving leach plant recoveries; and
o Improving organisational health.
Vametco has begun to implement a number of these initiatives and we expect all of these initiatives to be put into practice during the course of the year.
As part of the Transformation Programme we have changed the operational leadership at the Vametco plant, with the appointment of
Phase 3 of the multi-phase expansion project
The Company continues to review the timing and required investment to further increase the production name plate capacity to 5,000 mtV per annum, which we expect to generate a steady state production in excess of 4,200 mtV.
During 2019 Vametco will continue to progress environmental approvals for Phase 3 of the multi-phased expansion project. In addition, detailed design work and capital estimation will commence with a view to construction commencing in 2020.
Stakeholder Management
Employees and local communities are an important part of the
Employee Share Ownership Participation
Employee Financial Wellness Programme
Other projects underway
· Tailings facility expansion, in order to maintain deposition capacity for calcines, which need to be deposited on a H:H liner, as part of ongoing operations, will be completed during Q2 2019 and commence during this period.
· A Kiln off-gas project has been initiated to comply with regulatory requirements and further increase kiln feed throughput. Commissioning is planned to commence at the end of Q2 2019.
Vanchem
On
· The vanadium production business of VVP as a going concern ("Vanchem Plant");
· The ferrovanadium production business of SAJV as a going concern ("SAJV Business"); and
· 100 per cent of the outstanding shares of
for an aggregate cash consideration of
The Vanchem Pant and the SAJV Business consists of integrated vanadium extraction and production facilities which can produce a range of vanadium products. The plant comprises:
· A core salt-roast processing plant, including three roasting kilns, that produce vanadium trioxide and vanadium pentoxide;
· An electric smelting ferrovanadium converter, located at the Highveld Steel & Vanadium ("Highveld") site, situated approximately 10 km from the Vanchem Plant, which converts vanadium trioxide into ferrovanadium;
· An alumino-thermic smelting facility, also located at Highveld, which converts vanadium pentoxide into ferrovanadium; and
· A vanadium chemical plant producing various vanadium chemical products.
In addition, the Company will acquire 100 per cent of the outstanding shares of Ivanti which has economic rights to certain secondary vanadium units treated within the Vanchem Plant and generates profits from the sale of these secondary units to the Vanchem Plant.
The acquisition, which is expected to complete no sooner than
·
·
· The cession of specific commercial agreements; and
· No material adverse changes to the Vanchem Business or Ivanti during the interim period between signature and completion of the agreements.
Mokopane is intended to become a primary source of feedstock for Vanchem and its development will be accelerated as a result of the Transaction. By transporting a crushed, screened and dry magnetic separated ore from the Mokopane deposit to Vanchem for further beneficiation, the capital expenditure requirements associated with developing Mokopane are significantly reduced to
Enquiries: info@bushveldminerals.com
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+27 (0) 11 268 6555 |
Fortune Mojapelo, Chief Executive Officer |
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Nominated Adviser & Broker |
+44 (0) 20 3470 0470 |
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Alternative Resource Capital |
Joint Broker |
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+44 (0) 207 186 9001 |
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+44 (0) 207 186 9004 |
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Joint Broker |
+44 (0) 20 7236 1010 |
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Tavistock |
Financial PR |
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+44 (0) 207 920 3150 |
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Brunswick |
Financial PR ( |
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Miyelani Shikwambana |
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+27 (0) 11 502 7300 |
ABOUT
The Company's flagship vanadium platform includes a 74 per cent controlling interest in
Bushveld's vision is to become a significant, low cost, integrated primary vanadium producer through owning high grade assets. This incorporates development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage project developer and component manufacturer. Whilst the demand for vanadium remains largely anchored in the steel industry,
While the Company's focus is on vanadium operations and the development and promotion of VRFBs, it has additional investments in coal, power and tin.
The Company's approach to project development recognises that, whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production within a visible timeframe, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. This philosophy is core to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com.
About Vametco
Vametco is located near Brits on the
The Vametco mining operation uses open pit bench mining methods to mine a well-defined orebody. The deposit is continuous with limited faulting and dips in a northerly direction at approximately 19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing circuit, followed by milling and magnetic separation to produce magnetite concentrates. The magnetite concentrates are fed into the extraction process which includes the kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide (MVO) in rotary calciners. MVO is fed into the mixplant and finally into the shaft furnaces to produce NitrovanTM.
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