TIDMBMN
RNS Number : 8556O
Bushveld Minerals Limited
22 May 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.
22 May 2018
Bushveld Minerals Limited
("Bushveld" or the "Company")
Lemur Concludes Concession Agreement with the Government of
Madagascar for the Imaloto Power Project
Bushveld Minerals, the AIM-listed integrated vanadium producer
with additional investments in coal, power and tin, is pleased to
provide the following update in respect of Lemur Holdings Limited
("Lemur"), Bushveld's coal and energy subsidiary that is developing
an integrated thermal coal mining and independent power project in
Madagascar.
Lemur has, through its Madagascan subsidiary Imaloto Power
Project SARL ("Imaloto"), executed a binding 30-year Concession
Agreement (the "Concession") with the Government of the Republic of
Madagascar, represented by the Ministry of Energy and Hydrocarbons
for the approval to develop, construct, operate and maintain the
Imaloto Power Project in Madagascar ("the Project"). The Project,
which has an initial capacity of 60 MW and over 250km (expandable
as required) of transmission, will be located at the mine-mouth of
Lemur Resources' coal deposit, which has a resource of
approximately 136 million tonnes of coal. The addition of a power
component unlocks the value of the coal asset, while at the same
time securing reliable electricity supply backed by a government
entity and approval.
Highlights:
-- The Concession Agreement is for a period of 30 years and is
aligned with the Power Purchase Agreement ("PPA") Imaloto signed
with Madagascar's state-owned utility, JIRAMA, in November
2017;
-- The Concession will be for an initial 60 MW capacity and
includes the following key approvals;
- the right to build/renovate, possess, operate and maintain the
60 MW coal-fired power plant in Imaloto, Toliara Province;
- to build the Evacuation Line of up to 138kV for the transport
of the electricity to the connection point(s);
- enabling the power Plant of 60 MW, adjustable by an amendment
between the parties, to satisfy JIRAMA's direct needs for its
resale activities to the public and the large-electricity consumers
in the south region during the specified period;
- to enable any future collaboration with JIRAMA or other
mandated agency on additional evacuation lines to large electricity
consumers as agreed;
- granting Imaloto the right of way and any land use
authorisation for road constructions and related infrastructure
from the Plant to connection points as required
- the Concession also contains provisions for lenders' standard
terms and conditions to ensure the bankability of the project;
-- Overall, the Imaloto project will provide significant
developmental benefits to southern Madagascar over its
lifetime;
-- The Project remains on track to deliver electricity to Madagascar by 2021
Prince Nyati, CEO of Lemur Holdings, made the following
statement:
"The signing of the Concession with the Government, paves the
way for Lemur to move towards construction of the Project, subject
to concluding the SEIA and achieving financial close. Once
completed, this Project will, for the first time in the history of
Madagascar, interconnect the south region from west to east,
including the towns in-between".
Commenting on these developments, Fortune Mojapelo, CEO of
Bushveld Minerals, said:
"Lemur is a pioneer in the coal energy space in Madagascar.
Since the beginning of 2017, Lemur has made significant strides on
the Imaloto Project as an integrated mine and power company.
Lemur's achievements are reflective of Bushveld's core strategy of
creating value through integration, this approach is clearly
demonstrated in our flagship vanadium platform.
"Notwithstanding Bushveld Minerals' focus on its flagship
vanadium platform, the Company is committed to deliver on the value
of the Imaloto Project by completing the milestones that were set
out for this year. These include: progressing the Bankable
Feasibility Study; completing the SEIA; as well as engaging with
lenders.
"In addition, 2018 is an election year in Madagascar and we will
be monitoring the political developments closely. Overall, I am
pleased to see the significant progress made on the project and
delighted with the ongoing positive cooperation with the Madagascan
government."
The Project remains on track to complete a Full Technical and
Financial Feasibility Study for the Power Plant and Transmission
Line at the end of June 2018 and conclude its Social Environmental
Impact Assessment ("SEIA") application by the end of 2018.
The integrated project will act as an enabler for sustained
electricity production for the population that has traditionally
relied on subsistence or diesel power-based solutions. According to
PowerAfrica, Madagascar currently has only 504 MW of installed
generation capacity catering to 24 million people. The Project is
planned to grow this by nearly 12% in a region that currently has
no power grid. Furthermore, the base load coal-fired power project
would also look to attract industries to the area, especially since
the project includes transmission lines reaching major parts of
south-western Madagascar to connect the power plant with multiple,
currently off-grid, communities. The integrated nature of the
project will facilitate significant financial benefits to the
country overall, including the creation of thousands of jobs;
planned direct investment of about USD $200 million and over USD $1
billion to the national fiscus revenue over the project's lifetime
from royalties, taxes and other types of government revenue.
The Concession comes on the back of a full coal mine
exploitation license, which is only one of three currently held by
developers in Madagascar. The Concession follows the signing of a
30-year binding power offtake with JIRAMA, the state utility, in
November 2017.
The Project will use 100% local coal as fuel to supply 24-hour
energy to the load centres at Tulear and later to Fianaranstoa -
ultimately covering a total distance of about 500km in the long
term. Thus, making it the longest transmission line built in
Madagascar by almost three times the current existing
interconnecting transmission line.
Enquiries: info@bushveldminerals.com
Bushveld Minerals +27 (0) 11 268 6555
Fortune Mojapelo, Chief
Executive Officer
Chika Edeh, Head of Investor
Relations
Lemur Resources Limited
Prince Nyati,
Chief Executive Officer,
Lemur Resources Limited +27 (0) 11 268 6555
SP Angel Corporate Finance
LLP +44 (0) 20 3470 0470
Nominated Adviser & Broker
Ewan Leggat
Richard Morrison
Alternative Resource
Capital
Joint Broker
Rob Collins +44 (0) 207 186 9001
Alex Wood +44 (0) 207 186 9004
Blytheweigh
Financial PR
Tim Blythe / Nick Elwes +44 (0) 207 138 3204
Gabriella von Ille +27 (0) 711 121 907
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 Lemur Resources Limited
Lemur Resources is a wholly owned subsidiary of Bushveld
Minerals and is the company's coal and power platform. The Imaloto
Project is located in the southwest of Madagascar and consists of a
136 million tonne coal resource (90 per cent of which is of JORC
compliant Measured and Indicated). The Project also includes an
initial 60MW mine mouth coal power plant as well as over 200km of
new transmission lines, developed in parallel as one of
Madagascar's leading independent power producers.
Key Project Developments:
- 2008: Received a full mine exploitation right for coal
asset
- March 2017: Signed Technical Cooperation Agreement with
Sinohydro, a subsidiary of Power China
- September 2017: Appointed Worley Parsons as owner's
Engineer
- November 2017: Signed Power Purchase Agreement with JIRAMA,
the state utility of Madagascar
- May 2018: Commenced Social Environmental Impact Assessment
(SEIA)
- May 2018: Secured 30-year Concession for 60 MW and associated
transmission lines
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END
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