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Bushveld Minerals vanadium production hits record in 2020

Revenues were affected by a weak vanadium price during the year

Bushveld Minerals Ltd -
Vanadium is used to harden steel

Bushveld Minerals Limited (LON:BMN) produced a record amount of vanadium in 2020 as its acquisition Vanchem contributed for a full year.

Weak vanadium prices affected revenues, which dropped to US$90mln from US$117mln with Bushveld posting an underlying loss of US$14.9mln.

In the current year, production will be affected by a longer than scheduled maintenance shutdown at Vametco, with output now expected to be between 3,400-3,600mtV compared to 3,631mtV in the year to end December 2020. Costs will also be higher.

Cash at the year-end was US$50.5mln.

Bushveld added pre-feasibility studies at underway at both its Vametco and Vanchem subsidiaries to assess the best way to increase capacity to 6,400 mtVpa - 6,800 mtVpa in the medium-term and to 8,400 mtVpa longer-term.

Bushveld Energy, the group’s redox battery arm, made a 300% gain on its stake in Invinity and has sold it to realise US$13mln.

Fortune Mojapelo, chief executive, said:  "The successful acquisition of Vametco and Vanchem are important pillars in our brownfields growth strategy.

“With a combined acquisition cost for the two plants of approximately US$120 million and a growth capital expenditure of approximately US$30 million we now have the platform that will take the Group's steady-state production run-rate to between 5,000 mtVp.a. and 5,400 mtVp.a, from the projects currently being executed, with further growth ahead as more capex is spent.

“As importantly, we have funded this growth since 2016 with limited equity financing (through equity placing, convertible and warrant instruments) (approximately US$60mln) while the balance came from cashflows generated by the operations and debt funding.”

Quick facts: Bushveld Minerals Ltd

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Price: 11 GBX

Market Cap: £131.22 m

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