Bushveld Minerals Limited (LON:BMN) moved higher on Tuesday as the miner retained its production guidance for 2020 despite disruption to its operations from the coronavirus pandemic.
In the outlook statement accompanying its full year results, the vanadium producer said it expects its Vametco project in South Africa to produce between 3,000-3,200mln tonnes of vanadium (mtV), while its Vanchem operation is expected to produce 960-1,100mtV.
The company also said its sales for the first quarter of 2020 were 1,080mtV, more than double the 508mtV sold in the first quarter of 2019.
WATCH: Bushveld Minerals CEO says growth is still very much part of the story despite pandemic
For the year ended December 31, 2019, Bushveld reported that vanadium production had risen 15% year-on-year to 2,931mtV, as a result of higher production at Vametco and the incorporation of the Vanchem processing facility, which the firm acquired in November last year.
However, group earnings (EBITDA) fell 68% during the year to US$32.6mln as a result of a fall in vanadium prices, while revenues also dropped 39% to US$116.5mln.
Despite this, the company’s after-tax profit rose to US$69.2mln in the year from US$49mln in 2018.
Looking ahead, Bushveld chief executive Fortune Mojapelo said the company has formed a “strong base” which will allow it to survive the pandemic and also leave the firm “well positioned to take advantage of the opportunities that await on the other side of this crisis”.
“Vanadium, remains well positioned in a post-[coronavirus] world that will still see a rise infrastructure spending, hence increased consumption of vanadium and will likely continue on a decarbonisation energy transition path that will see energy storage…grow in prominence”, Mojapelo said.
In a note, analysts at Bushveld’s house broker, Peel Hunt, retained their ‘buy’ rating and 30p price target, saying the company’s US$34mln liquidity position left it with “solid financial footing” as it began to ramp up production again following the pandemic lockdown in South Africa.
Shares in the company were 2.8% higher at 14.6p in mid-morning trading.