Market Abuse Regulation ("MAR") Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR. 

22 June 2022

Bushveld Minerals Limited

("Bushveld Minerals" "Bushveld" or the "Company")

Delivering Sustainable Growth - Key Findings of Vametco and Vanchem Studies to Achieve 8,000 mtVp.a.

Bushveld Minerals Limited (AIM: BMN), the AIM quoted integrated primary vanadium producer and energy storage solutions provider, is pleased to provide a summary of the key findings of the feasibility and pre-feasibility studies (the "Studies") by METC South Africa Pty (Ltd) and MSA Group (Pty) Ltd to assess the optimal path forward to grow production at Vametco and Vanchem to 8,000 mtVp.a.

The Studies were undertaken to determine the next phase of the Company's growth plans beyond the sustainable production run rate of between 5,000-5,400 mtVp.a., which is expected to be achieved by the end of 2022.

Highlights of the Growth Studies

-     The studies highlight a significant opportunity to increase production by c.50% to 8,000mtVp.a. through the Company's existing operations. 

-     Requires growth capital expenditure of US$151 million (ZAR2.3 billion)¹

-     Optimal staged expansion plan (based on highest to lowest IRR and NPV):

o  Stage 1 - Vametco - Installation of a Semi-autogenous (SAG) Mill to establish a permanent and reliable supply of feedstock for both plants in advance of further capacity expansion. 

Stage 1 establishes a sustainable and reliable supply of concentrate feedstock (up to 6,800 mtV) for both plants in advance of further capacity expansion with the balance of ore, when required, being supplied through development of Mokopane, Brits or third party ore. The SAG Mill investment at Vametco will provide concentrate to enable Vanchem growth, whilst intermediate products (AMV, MVO) can also be shared between the plants.

o  Stage 2 - Vanchem - Refurbishment of Kiln 2 to increase production at Vanchem to between 3,600 - 3,700 mtVp.a. (corresponding increase in Group production to between 6,000 - 6,500 mtVp.a.).

o  Stage 3 - Vanchem - Refurbishment of Kiln 1 to increase production to between 4,600 - 4,700 mtVp.a. (corresponding increase in Group production to between 7,000 - 7,500 mtVp.a.).

o  Stage 4 - Vametco - Increase single kiln capacity to 3,400 mtVp.a. (corresponding increase in Group production to between 7,600 - 8,000 mtVp.a.).

-     The option to implement the expansion in stages substantially reduces Bushveld's upfront capital requirements and allows incremental production to be attained from each stage in order to generate additional cash flows, which can be leveraged for the next stage.  

¹Based on a R15.29 USD:ZAR exchange rate.

-     The product diversification and the flexibility arising from the expansion allows for maximum market penetration.

-     Management intent to pursue the staged expansion plans, subject to:

o  The meeting of short-term performance targets to deliver sustainable cash generating production at the production rate of 5,000 - 5,400 mtVp.a.; and

o  In a phased manner, with sufficient funding secured, accompanied by any necessary third-party validation of associated project economics.

-     As a result of higher volumes and operational efficiencies, the Company has estimated that at full operational production of 8,000 mtVp.a., C1 costs per Kg/V produced at Vametco and Vanchem would fall by at least 20% at each operation, compared to 2021. 

Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: 

"Bushveld's brownfield growth strategy was predicated on the significant barriers to entry posed by the high capital intensity for development of greenfield primary vanadium production capacity in a world with only four operational primary vanadium processing plants. In acquiring the two plants, Vametco and Vanchem, the company was mindful that significant capital expenditure would be required to unlock the full production and cost potential. The Company was also of the view that a combination of the acquisition and refurbishment costs would cost much less and transition the Company into a producer in much shorter time than it would with a greenfield operation. What's more, the Company could leverage cashflows to fund and source additional capital to implement this strategy.   

In this context, I am  pleased to share the results of the feasibility studies for the growth path to 8,000 mtVp.a., which allows our assets to reach their full potential unlocking significant value for shareholders. 

"Thus, whilst our commitment to growth remains, we have the liberty to pursue the new growth plans only once we have achieved our production performance targets on delivering sustainable cash generating production at the production rate of 5,000 - 5,400 mtVp.a. and improved our balance sheet capacity to invest in such when funding has been secured.

"Furthermore, the studies, puts us in a position to rapidly respond to growing vanadium demand. Growth in demand for Vanadium is supported by rising intensity of use within high-strength-low-alloy-steel, as well as the significant upside potential for vanadium redox flow batteries given the increasing requirement for energy storage applications for renewable energy sources."

ENDS

Enquiries: [email protected]

Bushveld Minerals

Summary report of the studies conducted to achieve 8,000 mtVp.a. as a full growth option between Vametco and Vanchem

Summary of the staged growth plan

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a low-cost, vertically integrated primary vanadium producer. It is one of only three operating primary vanadium producers, owning 2 of the world's 4 operating primary vanadium processing facilities. In 2021, the Company produced 3,592 mtV, representing approximately three per cent of the global vanadium market. With a diversified vanadium product portfolio serving the needs of the steel, energy and chemical sectors, the Company participates in the entire vanadium value chain through its two main pillars: Bushveld Vanadium, which mines and processes vanadium ore; and Bushveld Energy, an energy storage solutions provider. Bushveld Vanadium is targeting to materially grow its vanadium production and achieve an annualised steady state production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a by the end of 2022. Growth plans to expand to 8,000 mtVp.a. will be pursued, subject to funding and market conditions.

Bushveld Energy is focused on developing and promoting the role of vanadium in the growing global energy storage market through the advancement of vanadium-based energy storage systems, specifically Vanadium Redox Flow Batteries ("VRFBs").

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 mostly Nitro Vanadium. 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 concentrate is fed into the extraction process which consists of a rotary kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide ("MVO") in a rotary calciner. MVO is fed into the mix plant and finally into the shaft furnaces to produce Nitro Vanadium.

About Vanchem

Vanchem is situated at Ferrobank Industrial Park in Emalahleni Local Municipality, Mpumalanga Province in the Republic of South Africa. Vanchem is a primary vanadium producing facility with a beneficiation plant capable of producing various vanadium oxides, ferrovanadium and vanadium chemicals. Vanchem uses the salt roast beneficiation process, similar to the one used at Vametco. The plant comprises: a core salt-roast processing plant, including 3 roasting kilns, an electric smelting ferrovanadium converter, an alumino-thermic smelting facility, also located at Highveld, a vanadium chemical plant; and a rail siding linking the plant with Bushveld deposits and additional potential supply sources through the national rail network.