Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF) has revised down its production guidance for the current year due to ongoing issues at Vanchem, its processing arm, and the Vametco open pit.
Craig Coltman, who was appointed chief executive at the start of July, said: “Largely due to challenges at Vametco associated with the levels of the barren dam and the Sulphate Recovery Plant, as well as Vanchem's weak first half performance and delays in the use of the better quality ore, the 2023 production outlook needs to be revised.”
Guidance for 2023 is now between 2,300mtV (metric tonnes vanadium) and 2,400mtV compared to 2,700 mtV previously.
Output in July was 132mtV due to the problems at Vametco but is expected to rise to 200mtV over the rest of the year even with 10 days of planned maintenance this quarter.
Cash cost guidance has been revised to between US$25.6/kgV and US$25.9/kgV in line with the expected lower production volumes.
Coltman added: “A number of initiatives have already been implemented to address production issues to ensure we get the maximum performance from our assets.”
These are aimed at achieving a sustainable positive cashflow position in the short-term, he said, and to achieve stable production levels of approximately 180 mtV per month within the next six months.
Production in the half year to end June 2023 totalled 1,784mtV at an average half-year cash cost of US$26.6/kgV that included output of 840mtV in the second quarter
Sales over the half year were 2,096mtV (and 1,068mV in the last three months) with high-end demand strong though prices are down by around a third on this time last year.
A restructuring of mining financier Orion's debt is still waiting for South African Reserve Bank approval, the finalisation of definitive binding documentation and shareholders' approval.