Bushveld Minerals Ltd (AIM:BMN, OTC:BSHVF), the vanadium producer and energy storage solutions provider, said it is on track to meet full-year vanadium production guidance.
Group production of vanadium in the third quarter rose 19% quarter-on-quarter to 1,056 tonnes, underpinned by continued operational stability at the group’s Vametco project.
Vametco's production cash cost (C1) of US$22.4 per kilogram of vanadium improved by 13% on the preceding quarter as a result of the higher throughput in the quarter and a weaker exchange rate.
At the group’s Vanchem business, the C1 of US$27.3/kgV improved by 3% on the previous quarter, in line with the weaker ZAR:USD exchange rate.
Group sales in the quarter edged up to 826 tonnes of vanadium from 820 tonnes in the previous quarter. Despite higher production volumes, sales to final customers were affected by challenges in international logistics channels arising from (Coronavirus) COVID-19, the unrest in South Africa in July 2021 as well as disruptions at local ports in July and August 2021. Bushveld expects sales to recover as warehouse stocks in target markets are replenished.
Cash and cash equivalents at the end of September eased to US$25mln from $31.6mln at the beginning of the quarter, reflecting in part ongoing capital expenditure during the quarter to support growth and operational stability.
"I am pleased to report a solid quarter of production where we achieved our targets of stability and cost control at both our operations, on the back of the operational improvements we are implementing. At the same time, we were able to improve safety statistics, a very important achievement and one we will continue to focus on,” said Fortune Mojapelo, the chief executive officer of Bushveld.
“We entered Q4 2021 on a strong footing as a result and therefore still on track to achieve our production guidance. We continue to invest in sustaining and growth capital to maintain stability and provide the platform for growth, to support the volume increase in 2022," he added.
Shares in Bushveld were down 0.5% at 10.9p.