Unaudited Interim Results for the Six Months ended 30 June 2021

Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated primary vanadium producer and energy storage solutions provider with ownership of high-grade assets in South Africa, is pleased to announce its half year unaudited results for the six months ended 30 June 2021.

Highlights

• Revenue of US$47.0 million a 9 per cent increase relative to H1 2020 (H1 2020: US$43.1 million), supported by an improved average realised price of US$29.24/kgV (H1 2020: US$24.20/kgV), partly offset by lower sales volumes in H1 2021 of 1,608 mtV* (H1 2020: 1,765 mtV).
• Group production in H1 2021 of 1,574 mtV, a 5.2 per cent decrease relative to H1 2020 (H1 2020: 1,649 mtV) as a result of unplanned stoppages, a 35-day planned maintenance shutdown during Q1 2021 and the unprotected industrial action at Vametco in April 2021.
• Improved operational performance at Vametco post the maintenance programme and other operational enhancements initiated by the new management, increased Q2 2021 Group production by 28.8 per cent relative to Q1 2021, which combined with the higher production at Vanchem, resulted in Q2 2021 Group production being 13.4 per cent higher than Q2 2020. The operational stability has laid a platform for sustainable growth, lower unit cost expected in H2 2021 will normalise costs for the rest of the year in line with production cash cost (C1) guidance at both plants.
• EBITDA loss of US$10.8 million (H1 2020: US$1.0 million) primarily due to a stronger ZAR:USD exchange rate on costs in H1 2021 resulting in a negative impact amounting to US$7.3 million.
  • The improved operational performance at Vametco in Q2 2021 was not sufficient to offset the challenging start in Q1 2021.
• Sustaining capital expenditure of US$6.1 million (H1 2020 of US$0.1 million), supporting the recent operational stability.
• Cash and cash equivalents as at 30 June 2021 of US$31.6 million (December 2020: US$50.5 million).
• Approximately US$12.7 million was realised from the sale of the investment in Invinity Energy Systems Plc (“Invinity”) and the profit on the sale is not included in EBITDA. The profit realised on the original investment of US$5 million was approximately US$7.7 million.
• Net debt as at 30 June 2021 of US$54.4 million (December 2020: US$33.7 million), including production financing agreement (“PFA”) of US$29.3 million.
• H1 2021 Total Injury Frequency Rate (“TIFR”) of 5.17, an improvement of 78 per cent relative to H1 2020 (H1 2020: 23.75).
• On track to meet 2021 Group production guidance of between 3,400 mtV and 3,600 mtV and ramping up at Vanchem using the reallocated PFA capital ringfencing, to increase Group production to a steady-state run rate of between 5,000 to 5,400 mtV by the end of 2022. Production growth reduces unit cost and increases profitability.

*Reported as final sales to customers.

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:

“The operational stability and improved production performance achieved in the last two months of the period under review was carried through into the first two months of the second half, which bodes well for reducing unit costs in the remainder of the year. We are confident of maintaining this rhythm, putting us on course to meet our production and cost guidance for the full year.

2021 marks a rebasing for the Company which creates the environment for us to implement the changes required at the operations, which can sustain production and provide the platform for growth. This means investing in maintenance and sustaining capital to achieve stability and support volume increase. As production growth on the back of our operational stability is key to margin expansion and profitability, we are pleased with the uplift of the PFA capital ringfence and the reallocation of the funding to the Vanchem refurbishment and expansion, given Vanchem’s operational stability and opportunity to rapidly scale-up production. As a result of using this existing PFA funding for the Vanchem capital expenditure of about US$18 million in the current year and in H1 2022, we remain on target for Group production to increase to a steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a. by the end of 2022. The increase in production will be the biggest contributing factor to a sustainable cost reduction, with Vanchem’s unit costs expected to be in line with Vametco, when it more than doubles its current production to 2,600 mtV.

The Upper Seam Project at Vametco came online in September 2021 and will supply Vanchem with a significant proportion of its ore requirement for the next 18 months.

Finally, it is with deep sadness we learned of the passing of Professor Morris Viljoen in August 2021, a Technical Advisor to Bushveld Minerals and importantly, one of co-founders of VM Investment Company (“VMIC”). VMIC laid the foundation for the establishment of Bushveld Minerals.”

In the film below, SP Angel Analyst John Meyer highlights the investment case for Bushveld Minerals