TIDMBMN
RNS Number : 3542M
Bushveld Minerals Limited
27 April 2018
Market Abuse Regulation (MAR) Disclosure
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.
27 April 2018
Bushveld Minerals Limited
("Bushveld" or the "Company")
Bushveld Vanadium Q1 Operational Update
Bushveld Minerals, the AIM listed integrated vanadium producer
with additional investments in coal, power and tin, is pleased to
provide an operational update in respect of its Vanadium platform,
which consists of Bushveld Vametco ("Vametco"), Mokopane and
Brits.
In line with standard market practice, the Company will only
present operational information during quarterly updates, with
financial information reported in the interim and full year
results.
Key Highlights
-- Vametco produced 731 mtV in the form of Nitrovan(R) , an
increase of 35.5% relative to Q4 2017 and 12.9% relative to Q1
2017, supported by the completion of Phase one of the expansion
project;
-- The Metal Bulletin vanadium price based on the FeV mid
average price for the quarter was US$61.8/KgV, an increase of 58.1%
relative to Q4 2017;
-- Phase two of the expansion project is progressing to increase
production capacity to 3,750 mtV;
-- Vametco achieved an all-time record magnetite kiln feed
during Q1 2018, supported by the completion of Phase one of the
expansion project;
-- The Company has commenced an exploration programme at the
Brits Project, which has shown positive drilling results;
-- Post the completion of the Vametco acquisition the Company is
working on integrating its system and reporting standards across
the group.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"We are pleased with the strong performance at Vametco over this
period, which was underpinned by the completion of the first phase
of the expansion project. Phase two of the expansion plan is well
underway and on track, which, once complete, will enable Vametco to
achieve a production capacity of 3,750 mtV and further lower
production costs. Plans for commencing Phase three are progressing
to schedule. The results of the Vametco expansion project to
position us to achieve a production capacity of 5,000 mtV by 2019
are coming through positively, and our previously stated 2018
guidance remains unchanged.
"We remain focussed on delivering on this important aspect of
our strategy, which will allow us to take advantage of current
higher prices, along with supporting our electrolyte and FeV
production aspirations. The plans being implemented will
undoubtedly further enhance our competitive position in this
structurally challenged market whilst our integrated platform will
allow us to develop downstream operations and product
diversification."
Bushveld Vametco
Production:
-- Vametco produced 731 mtV in the form of Nitrovan(R) from
magnetite concentrate during the first quarter of 2018. Vanadium
production for the March 2018 quarter increased by approximately
35.5% relative to the December 2017 quarter. This was primarily due
to the kiln maintenance undertaken at the end of 2017 to allow the
increased kiln feed rate as part of the second phase of the
expansion project.
-- Vanadium production increased by 12.9% relative to the March
2017 quarter underpinned by increased magnetite processing rates,
as a result of the completion of the first phase of the expansion
project. The capacity enhancement resulted in an all-time record
magnetite kiln feed being achieved during the quarter. The average
kiln feed magnetite prior to the commissioning of the first phase
was 36,539t pm and the average kiln feed magnetite post the
implementation of the first phase was 39,161t pm, a 7.2% monthly
increase on kiln feed.
-- Vanadium production guidance for the 2018 calendar year
remains unchanged at approximately 3,680 mtV. Following the
completion of Phase two of the expansion project by the end of June
2018, Vametco's production capacity will ramp up from the current
3,035 mtV to 3,750 mtV per annum. The capital expenditure programme
is being funded from operational cashflow, as previously
notified.
Operational and financial highlights for Vametco (on a 100%
basis)(1) :
Description Unit Q1 CY18 Q1 CY18 Q1 CY18
vs Q4 vs Q1
CY17 CY17
============================== ========= ======== ======== ========
Vanadium (Nitrovan(R)
plus FeV) produced mtV(3) 731 +35.5% +12.9%
--------- -------- -------- --------
Vanadium sold mtV(3) 690 +8.6% +7.2%
--------- -------- -------- --------
Average MB vanadium price(2) US$/KgV 61.8 +58.1% +144.2%
--------- -------- -------- --------
USD/ZAR exchange rate US$:ZAR 12.0 -12.4% -9.6%
--------- -------- -------- --------
Production costs(4) ZAR/kgV 226.7 -8.0% +11.7%
--------- -------- -------- --------
1. Based on provisional, unaudited estimates. Bushveld's net
attributable interest of the above production and financials is
approximately 59.1% and will be consolidated on a 100% basis in the
financial accounts.
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 an average one month prior to sale.
3. mtV = metric tonnes of vanadium.
4. Excludes depreciation, royalties, selling, general, & administrative expenses.
Multi-phased expansion project
-- In 2017, Vametco commenced a three-phased expansion project
with the aim of increasing annualised production capacity to more
than 5,000 mtV by 2019.
-- Phase one of the expansion plan was successfully completed on
time and on budget in the September 2017 quarter, during which
Vametco reached an annualised production capacity of 3,035 mtV.
-- Phase two of expansion plan to target annualised production
capacity of 3,750 mtV continues on schedule. Commissioning of the
new milling circuit is expected during June 2018 with improved
concentrate volumes planned from the end of the first half of
2018.
-- Phase three of the expansion plan is planned to increase
Vametco's annualised production run rate to over 5,000 mtV by
2019.
-- Completion of the expansion project will enhance Vametco's
existing competitive position in a structurally challenged market.
In addition, the presence of an integrated platform will allow the
development of downstream operations whilst achieving product
diversification.
Project Investment(1) Scope Progress
Multiphase expansion US$0.5m Increase Vametco 100% completed
project - Phase 1 annual production in September
run rate to 3,035 2017.
mtV.
-------------- ------------------- -----------------
Multiphase expansion US$2.5m Increase Vametco On target for
project - Phase 2 annual production completion by
run rate to 3,750 June 2018.
mtV by June 2018.
-------------- ------------------- -----------------
Multiphase expansion N/A Increase Vametco Planning Stages.
project - Phase 3 annual production
run rate to over
5,000 mtV by
2019.
-------------- ------------------- -----------------
1. Shown on a 100% basis, Bushveld Minerals net interest is 59.1%.
Other projects underway
-- Tailings facility expansion: to provide capacity to continue
depositing the calcines (which needs to be deposited on a H:H
liner) as part of ongoing operations.
-- Kiln off-gas project: to comply with regulatory requirements
and further increase kiln feed throughput.
-- Both projects are expected to be commissioned by the end of 2018.
Mokopane Project
The Mokopane Vanadium Project is a key part of Bushveld's
vanadium strategy. The project comprises one of the world's largest
primary vanadium resources as well as high in-situ grades of 1.4%
V(2) 0(5) and in-concentrate 1.60-1.75% V(2) O(5) grades for the
MML orebody. An application for a New Order Mining Right was lodged
in March 2015 and is being processed by South Africa's Department
of Minerals Resources. The Company is in ongoing discussions with
the Department of Mineral Resources with a view to being granted a
New Order Mining Right. Simultaneously, the Company has been
progressing ongoing consultations with the local community and
continues to evaluate ways to bring the asset into production in
the most cost-efficient manner possible. The intention remains to
develop this project alongside the Company's broader vanadium
portfolio.
Brits Project
The Company has begun an exploration programme at the Brits
Project, comprising prospecting rights on several farms adjacent to
Vametco, with the aim of establishing a maiden Mineral Resource
Estimate. In February and March 2018, a soil geochemical sampling
programme and ground magnetic survey were carried out over the
Brits Project area, and interpretation of the results of this work
has led to several drilling targets being delineated.
Drilling on these targets commenced in March 2018, and thus far
eight diamond drill holes have been completed, totalling 833.08
metres. The Lower Seam (the primary orebody mined at the adjacent
Vametco Mine) has been intersected in several drill holes, and the
Intermediate Seam and Upper Seam have also been intersected in some
drill holes.
Drill hole Total Depth Targets Intersected
BVL001 70.76 m Lower Seam
------------ -------------------------
BVL002 79.35 m Lower Seam
------------ -------------------------
BVL003 77.32 m Lower Seam
------------ -------------------------
BVL004 40.35 m Lower Seam
------------ -------------------------
BVL005 99.36 m Lower Seam, Intermediate
Seam
------------ -------------------------
BVL006 173.10 m Lower Seam, Intermediate
Seam
------------ -------------------------
BVL007 141.44 m Lower Seam, Intermediate
Seam
------------ -------------------------
BVL008 151.40 m Upper Seam
------------ -------------------------
Total 833.08 m
------------ -------------------------
Drill cores are currently being logged and assayed. Assays will
be carried out at the Vametco mine laboratory and confirmed by an
independent external laboratory, with results published as they are
received. The Company will commence infill drilling at the Brits
Project and will begin estimation of the Mineral Resource once
logging, sampling and assaying of all drill holes has been
completed.
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance Nominated Adviser +44 (0) 20 3470
LLP & Broker 0470
Ewan Leggat
Richard Morrison
Alternative Resource Capital Joint Broker
+44 (0) 207 186
Rob Collins 9001
+44 (0) 207 186
Alex Wood 9004
Blytheweigh Financial PR
+44 (0) 207 138
Tim Blythe / Nick Elwes 3204
+27 (0) 711 121
Gabriella von Ille 907
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is an AIM listed integrated vanadium producer
with additional investments in coal, power and tin.
The Company's flagship vanadium platform includes a 59.1 per
cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd a
primary vanadium mining and processing company; the Mokopane
Vanadium Project and the Brits Vanadium Project. The coal platform
comprises the wholly-owned Imaloto Coal Project, which is being
developed as one of Madagascar's leading independent power
producers. The Company's tin interests are held through its
shareholding in AIM listed AfriTin Mining Limited.
Bushveld's vision is to become a significant, low cost,
integrated primary vanadium producer through owned 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 solutions provider.
Whilst the demand for vanadium remains largely anchored in the
steel industry, Bushveld Minerals believes there is strong
potential for an imminent and significant global vanadium demand
surge from the fast-growing energy storage market, particularly
through the use and adoption of Vanadium Redox Flow Batteries.
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 Western Limb of the
Bushveld Complex. The integrated operation comprises a vanadium ore
mine and a processing plant that produces Nitrovan(R) , a trademark
product sold in major steel markets across the world. The mine lies
adjacent to the Brits Vanadium Project, which will in future serve
as an alternative source of near surface run of mine (ROM) ore feed
to the Vametco plant.
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 Nitrovan(TM) .
This information is provided by RNS
The company news service from the London Stock Exchange
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