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Bushveld Minerals Limited  -  BMN   

Bushveld Vametco Operational Update - Correction

Released 08:08 14-Aug-2017

RNS Number : 8802N
Bushveld Minerals Limited
14 August 2017

14 August 2017

The following amendment has been made to the Bushveld Vametco Operational Update announcement released on 9 August 2017 at 0700hrs under RNS No 4603N.

The announcement incorrectly stated that the Company's share of the financials relating to Bushveld Vametco Limited is approximately 35%. The correct figure is approximately 27%.

All other details remain unchanged.

The full amended text is shown below.


Bushveld Minerals Ltd

("Bushveld" or the "Company")

Bushveld Vametco Operational Update - Correction

Bushveld Minerals Limited (AIM: BMN), a diversified mineral development company with a portfolio of vanadium, titanium, iron ore, tin and coal assets in Southern Africa is pleased to provide an operational update with respect to Vametco Alloys (Proprietary) Limited ("Vametco"), the South African vanadium mining operation jointly acquired by the Company and Yellow Dragon Holdings Limited ("Yellow Dragon") from Evraz Group S.A. in April 2017.  Bushveld Vametco Limited ("Bushveld Vametco") has a 78.8% shareholding in Strategic Minerals Corporation ("SMC), which is the ultimate holding company of Vametco. Bushveld Vametco is 45% owned by the Company and 55% by Yellow Dragon.    


Operational & Financial Highlights for Vametco (on a 100% basis):  financial years ended 2015 and 2016 (audited) and first half 2017 (unaudited):



6 months ended

Year ended

Year ended

Vanadium produced


1 441

2 804

2 419

Vanadium sold


1 341

2 810

2 340

USD/ZAR exchange rate















Production costs

US$/kg V




Bushveld's share of the above financials is approximately 27%, and will be accounted for using the equity method.

Vametco has a current annual plant capacity of approximately 3,000 metric tons of vanadium ("MTV") in the form of Nitrovan®, a trademark vanadium product used in the steel industry and modified vanadium oxide ("MVO" or "V2O3"). Vametco produced 2,419 MTV of Nitrovan® and MVO from its own magnetite concentrate production for the financial year ended 31 December 2015. In 2016 production grew by 16% to 2,804 MTV, reflecting a 3.7% share of global production.  The half-year to 30 June 2017 saw production levels similar to 2016 with 1,441 MTV produced. Under the oversight of Bushveld and Yellow Dragon, Vametco has commenced a multi-phased expansion project to increase annual production to more than 5,000 MTV over the next 3 years.

Reported revenue in the current period has improved markedly since the 2015-16 period, largely due to improved vanadium prices. The challenging market conditions characterised by sustained depressed vanadium prices during 2015-16 adversely impacted financial performance across the industry.  Vanadium prices have, however, improved materially, rising from a low of US$14.41/kgV* in January 2016 to US$23.23/kgV* in December 2016. This price improvement has continued into the first half of 2017, resulting in increased revenues. This increase has been tempered by a strengthening exchange rate at Vametco, with the South African Rand strengthening from ZAR 14.71 to the US dollar in 2016 to ZAR 13.22 in the first half of 2017.

Supply shortages are expected to continue to drive vanadium prices higher. By the end of July 2017, prices of above US$45/kgV were being reported by the recognised industry platform, Metalbulletin, in Europe, with Chinese prices in excess of US$50/kgV.

Vametco's cash production costs of US$14.50/kgV (equivalent US$3.55/lb V2O5) during the year ended 31 December 2016 were among the lowest in the world, partly driven by the 16% increase in production volumes, placing Vametco in the bottom quartile of the international vanadium production cost curve.  During the first half of 2017, cash production costs have increased by 7% above reported 2016-year amounts. This is a testimony to management initiatives focussing on tight cost controls over all major components of the production value chain.

* Metalbulletin mid-point for the month


Earnings before interest, depreciation and tax (EBITDA) for the year 2016 was ZAR 47.5 million (US$ 3.2 million), in large part due to the low average vanadium prices realised, reflecting a 203% improvement from ZAR15.7 million (US$ 1.2 million) in 2015. During the first half of 2017, EBITDA has grown to ZAR85.5 million (US$ 6.5 million), an 80% increase (260% on an annualised basis).


Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:

"Vametco is a significant Vanadium producer, with extremely competitive production costs, that is now undergoing an expansion initiative to deliver increasing volumes into a structurally deficit supply market. We are extremely pleased to have concluded the Vametco joint-acquisition at the time we did.  With more than 100 years of combined industry experience within the Vametco senior leadership team, we are very excited about the future prospects of this investment.  We look forward to continuing to work with management in further driving down operating costs, plus delivering on its expansion initiatives."


Description of Vametco operations:

Vametco is located near Brits on the Eastern Limb of the Bushveld Complex, 20 kilometres from Glencore's Rhovan operations. The integrated operation comprises a vanadium ore mine and a processing plant to produce Nitrovan®, a trademark product sold in major steel markets across the world. The mine lies adjacent to Bushveld's 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 mine's latest Mineral Resource and Ore Reserve estimates (which were produced by VBKom (Proprietary) Limited during April 2016) are presented in the tables below.

Resource Category

Tonnage (Mt)

Percentage Magnetics

Percentage V in magnetics

Percentage V2O5 in magnetics


CaO (%)

Measured + Indicated






















a. Figures reported are based on 100% of Mineral Resources;

b. Reporting is prepared on an inclusive basis - Mineral Resources reported includes Mineral Reserves;

c. Mineral Resources tonnes and grades are reported on an in-situ dry basis;

d. Reporting was prepared on block models developed by VBKOM in 2016;

e. Rounding of figures may cause computational discrepancies.


Reserve Category

Tonnage (Mt)

Percentage Magnetics

Percentage V in magnetics

Percentage V2O5 in magnetics


CaO (%)























1. Figures reported are based on 100% of Ore Reserve;

2. Mineral Reserves reported included in Mineral Resources reported and should not be seen as additional tonnes;

3. Mineral Reserve tonnes and grades are reported on a dry ROM (plant feed) basis after mining modifying factors have been applied but before beneficiation down-stream recoveries/ losses have been applied;

4. Reporting was prepared on block models developed by VBKOM in 2016;

5. Rounding of figures may cause computational discrepancies.

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. Mining production is planned to maximise concentrate production.

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 kiln (treatment plant) followed by leaching, milling and precipitation processes and finally into the Nitrovan® plant to produce vanadium products.




Bushveld Minerals Limited

Fortune Mojapelo                                                                       +27 (0) 11 268 6555

Strand Hanson Limited (Nominated Adviser)

Andrew Emmott / Ritchie Balmer                                                 +44 (0) 20 7409 3494

Beaufort Securities (Joint broker)

Jon Bellis                                                                                  +44 (0) 20 7382 8300

SP Angel Corporate Finance (Joint broker)

Ewan Leggat                                                                             +44 (0) 20 3470 0470

Blytheweigh (Public Relations)

Tim Blythe / Camila Horsfall                                                        +44 (0) 20 7138 3204

Gabriella von llle                                                                         +27 (0) 711 121 907



Bushveld Minerals is a diversified AIM listed mineral development company with a portfolio of vanadium, iron ore, tin and coal greenfield assets in Southern Africa and Madagascar.  The Company's flagship platform, the vanadium platform, includes the Mokopane Vanadium Project, the Brits Vanadium Project, and the Bushveld Iron Ore & Titanium Project. The tin platform comprises the Mokopane Tin Project whereas the Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers, makes up the Company's coal platform.

The Company's vision is to become the largest low cost integrated primary vanadium producer through owned low-cost 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 a slow growing steel industry, Bushveld Minerals believes there is a strong potential for imminent significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.

Bushveld Minerals' 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 with a visible timeframe, low capex requirements and scalability are important factors in retaining an attractive exit option. 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:

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Bushveld Vametco Operational Update - Correction - RNS