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
17 September 2024
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Unaudited Interim results for the six-months ended 30 June 2024
Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium producer, announces its interim results for the six months ended 30 June 2024.
Following the previously announced sale of the Vanchem vanadium processing plant ("Vanchem") to Southern Point Resources Fund I S.A. LP ("SPR"), Vanchem has been classified as 'a discontinued operation' and 'held for sale'. Vanchem's operational results for the current and comparative periods are presented as discontinued operations in the Group's consolidated interim statement of profit or loss and its assets and liabilities are presented separately under current assets and current liabilities, respectively, in the Group's consolidated interim statement of financial position at 30 June 2024.
H1 2024 Financial Highlights from continuing operations
· Revenue (primarily Vametco) of US$25.6 million (H1 2023: US$55.1 million)
· Group Sales of 949 mtV (H1 2023: 1,428 mtV)
· Average realised price of US$26.9/kgV (H1 2023: US$38.6/kgV)
· Cost per unit sold including sustaining capital of US$42.9/kgV (H1 2023: US$30.8/kgV)
· Adjusted EBITDA1 loss of US$14.3 million (H1 2023: US$12.6 million profit)
· Operating loss of US$18.6 million (H1 2023: US$7.9 million profit)
· Net loss of US$45.0 million (H1 2023: net loss US$12.5 million)
· Free cash outflow2 of US$18.1 million (H1 2023: outflow of US$2.7 million)
· Cash and cash equivalents of US$1.0 million (31 December 2023: US$1.3 million)
· Net debt3 of US$124.0 million (31 December 2023: US$105.7 million)
1 Adjusted EBITDA is EBITDA, excluding the Group's share of losses from investments in associate and joint venture, fair value gain on derivative liability and other losses.
2 Free cash flow defined as operating cash flow less sustaining capital.
3 Net debt is total debt plus lease liabilities less cash and cash equivalents.
Group Priorities and Post-Period Update
· Optimising operations and right-sizing the organisation to ensure that Vametco is a cash-generating asset, expecting to achieve an annualised savings of US$8-10 million by 2025 year-end, including the following initiatives:
o Reducing the current labour complement at Vametco and Head Office.
o Reducing costs by transferring purchases of certain goods and services to longer term contracts.
o Reducing raw material consumption by ensuring assets are running efficiently.
o Implementing several operational initiatives for yield improvements from kiln to finished goods.
· Complete outstanding conditions of the Vanchem sale, expecting to receive Competition Commission approval at the end of October 2024 and complete final documentation.
· Focused on receiving the outstanding balance of funds due in 2024 from SPR.
· Attaining sustainable production at Vametco of 240 mtV per month by Q4 2024.
· Complete the sale of certain non-core assets - Lemur Holdings Limited ("Lemur") and Bushveld Electrolyte Company ("BELCO").
· Cash balance of US$4.1 million as at 31 August 2024.
· OMF Fund III (F) Limited's ("Orion") US$10 million matched funding received post-period end.
· As announced on 14 August 2024, the Company secured the total amount of US$12 million of the SPR interim working capital facility announced on 07 May 2024.
· In discussions with Joint Venture ("JV") partner for the transfer of liabilities from BELCO and removal of a guarantee provided by Bushveld amounting to ZAR28.75 million (c.US$1.5 million).
· Received approval from the Development Bank of South Africa ("DBSA") to dispose of Lemur, which will result in Bushveld no longer being liable for a c.US$2.5 million debt. The disposal remains subject to certain outstanding conditions being met.
Investor session
Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief Financial Officer, Robbie Taylor, will host an investor session on Thursday 19th September 2024 at 14:00pm BST (15:00pm SAST) via the Investor Meet Company platform to discuss the operational update.
The session is open to all existing and potential shareholders. Investors can submit questions via Investor Meet Company dashboard up until 9:00am the day before the meeting. Pre-submitted questions will be prioritised.
Investors can sign up to Investor Meet Company for free and register for the event via:
https://www.investormeetcompany.com/bushveld-minerals-limited/register-investor
Investors who already follow Bushveld Minerals on the Investor Meet Company platform will automatically be invited.
Craig Coltman, CEO of Bushveld Minerals commented:
"The Company experienced a challenging start to the financial year given severe funding constraints leading to the inability to run our assets efficiently. This is clearly reflected in these financial results. However, Bushveld has remained steadfast in its commitment to rationalise assets, and implement a range of cost-cutting measures in what is now our core asset, Vametco.
The sale of Vanchem is expected to be concluded, with approval from the Competition Authorities expected by end October 2024.
As outlined in our Q2 and H1 operational update, May was a standout month at Vametco, reaching its highest monthly output since the beginning of my tenure of 217 mtV, demonstrating the early success of some of our turnaround efforts.
Additionally, we saw the successful receipt of the final instalment of US$2 million from SPR, completing the total US$12 million interim working capital facility initially secured in May 2024. In a further boost to our position, we received the full US$10 million of the matched funding facility from Orion. These milestones have enabled us to maintain momentum in our turnaround journey, but the Company remains focused on managing our working capital situation and is dependent on a significant amount of funds from SPR for the balance of funds due in 2024."
Enquiries : info@Bushveldminerals.com
| Bushveld Minerals Limited | | +27 (0) 11 268 6555 |
| Craig Coltman, Chief Executive Officer | | |
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| SP Angel Corporate Finance LLP | Nominated Adviser & Joint Broker | +44 (0) 20 3470 0470 |
| Richard Morrison / Charlie Bouverat |
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| Grant Barker / Abigail Wayne |
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| Hannam & Partners | Joint Broker | +44 (0) 20 7907 8500 |
| Andrew Chubb / Matt Hasson / Jay Ashfield |
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| Tavistock | Financial PR | +44 (0) 207 920 3150 |
| Gareth Tredway / Tara Vivian-Neal / James Whitaker | | |
ENDS
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a primary vanadium producer. It is one of the world's three primary vanadium producers, offering compelling exposure to vanadium through its upstream asset.
Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com.
Chief Executive Officer's Review
Dear stakeholders,
The financial results for the first six months of 2024 reflect a challenging first half of the year for the Company.
We entered the period on the front foot, having completed a fund raising at the end of 2023 that was intended to help us reduce creditors and secure availability of goods and services, along with pricing based on longer term contracts.
For reasons previously explained, this funding was not immediately forthcoming and the Company was forced to continue to run on a hand-to-mouth basis for several months. The pre-announced sale of Vanchem, and US$10 million in matched funding have since strengthened our position, and we remain focused on managing our working capital situation, but we remain dependent upon SPR for the balance of funds due in 2024.
In addition, Orion agreed to amend the terms of the agreements entered into for the convertible loan note refinancing announced on 1 February 2024, importantly extending the first repayment date on the term loan to 31 December 2025 (previously 30 June 2024).
The major factor out of our control in this regard, remains the Vanadium price, which continues to trade at levels which place pressure on the ability of our operations to generate meaningful positive cash flow.
As a result of these, and other factors, the Company recorded an adjusted and underlying EBITDA loss from continuing operations of US$14.3 million, and an operating loss of US$18.6 million. Both adjusted EBITDA loss and operating loss were higher than the prior year due to lower realised prices and lower sales volumes, partially offset by lower costs of sales. While revenue of US$25.6 million from continuing operations was 54% lower than the prior year due to a 30% decrease in the average realise price to US$26.9/kgV and a 34% decrease in sales to 949 mtV.
The cost of sales, excluding depreciation, from continuing operations for the first half of 2024 was US$28.3 million, which was US$1.4 million lower than the prior period primarily due to lower variable production costs.
Production cash costs for continuing operations for the quarter and half year were $32.8/kgV, driven by higher raw material costs, lower production volumes due to earlier constraints, and maintenance expenses. As production continues to stabilise and increase due to our turnaround strategy, we anticipate a reduction in Vametco's costs in the second half of the year. We are targeting weighted average production cash costs for the Group of between $26.7/kg and $27.1/kg, with total Group production projected between 3,800 mtV and 4,000 mtV. Assuming Vanchem's production is excluded for the last two months of the year (with Competition Commission approval expected to be received at the end of October 2024), total year Group production guidance will reduce by 400 mtV.
OPERATIONAL OVERVIEW
Bushveld Minerals has continued its efforts to streamline operations and drive efficiencies, and the Company remains committed to its strategy of asset rationalisation, which includes cost-cutting measures and a reduction in headcount, while simultaneously making significant strides in the turnaround initiative at Vametco. The programme has already delivered improved production volumes and enhanced operational stability, despite supplier challenges. A stabilised power supply, secured through our agreement with the local municipality, has further enabled steady production, and as a result of these measures, our outlook remains strong for the remainder of 2024 into 2025.
In Q2, Bushveld reported production at Vametco of 548 mtV, and 905 mtV for the half year. Notably, May was a standout month at Vametco, with production reaching 217 mtV - the highest monthly output since my tenure began a year ago. This performance underscores the success of our ongoing turnaround efforts at Vametco, which has now become our core asset.
Despite financial constraints earlier in the year and a planned 25-day maintenance shutdown in January and February, we have laid a strong foundation for further improvements. With additional initiatives set to be implemented at Vametco in the second half of the year, we are on track to achieve our goal of 240 mtV of sustainable monthly production by Q4 2024.
Furthermore, during this period, Bushveld has continued to progress its asset rationalisation strategy. While no definitive agreement has been reached, we are in discussions with our JV partner, the Industrial Development Corporation, regarding the transfer of ownership of BELCO, which would include all liabilities and a guarantee of approximately US$1.5 million from Bushveld. We have also received approval from DBSA to proceed with the disposal of Lemur, which will result in Bushveld no longer being accountable for the outstanding US$2.5 million debt on the asset, contingent on certain conditions being met.
Following shareholder approval in June, we are now advancing the sale of Vanchem, with approval from the Competition Commission expected by the end of October 2024.
Health and Safety
I'm pleased to report that in H1 2024, TRIFR reduced by over 60% to 1.30 from 3.39 in H1 2023, reflecting the successful implementation of the Safety Diagnostic Audit and a strategic focus on leading indicators, which have collectively contributed to a notable reduction in safety incidents.
2024 priorities and outlook
Bushveld also renegotiated agreements with Orion during the period, which include additional funding commitments matching those paid by SPR.
As mentioned, post-period end, Bushveld Minerals has made significant strides in strengthening its financial position and supporting the execution of our turnaround strategy at Vametco.
We announced the successful receipt of the final instalment of US$2 million from SPR, completing the total US$12 million interim working capital facility that was initially secured in May 2024. In addition, Orion agreed to match SPR's additional funds on a dollar-for-dollar basis, up to a maximum of US$10 million, and received approval by SARB and secured the full US$10 million from Orion, as announced 02 September 2024.
The combined funding of US$22 million from SPR and Orion will significantly enhance our working capital position, allowing us to reduce our long outstanding creditor balances, support our ongoing turnaround initiatives at Vametco, and cover transaction costs. We have also commenced work on critical cost-cutting and development initiatives aimed at returning the Company to profitability and securing its long-term future.
Looking ahead, I am focused on executing the Company's asset rationalisation and turnaround strategies at Vametco, positioning the company as a simple, fast and effective business.
FINANCIAL OVERVIEW
| | Unit | H1 2024 | % change | H1 2023 |
| Revenue | US$m | 25,6 | -54% | 55,1 |
| Cost of sales | US$m | (32,4) | -6% | (34,3) |
| Other operating income and costs | US$m | (5,5) | -7% | (5,9) |
| Administrative costs | US$m | (6,3) | -10% | (7,0) |
| Adjusted EBITDA | US$m | (34,3) | -432% | 10,3 |
| - continuing operations | US$m | (14,3) | -214% | 12,6 |
| - discontinued operation | US$m | (19,9) | 763% | (2,3) |
| Underlying EBITDA | US$m | (21,9) | -313% | 10,3 |
| - continuing operations | US$m | (14,3) | -214% | 12,6 |
| - discontinued operation | US$m | (7,6) | 229% | (2,3) |
| Average foreign exchange rate | US$/ZAR | 18,73 | 3% | 18,21 |
| Group production | mtV | 1 693 | -5% | 1 784 |
| - continuing operations | mtV | 905 | -22% | 1 167 |
| - discontinued operation | mtV | 788 | 28% | 617 |
| Group sales | mtV | 1 639 | -22% | 2 096 |
| - continuing operations | mtV | 949 | -34% | 1 428 |
| - discontinued operation | mtV | 690 | 3% | 668 |
| All-in sustaining costs ("AISC") | US$/kgV | 47,1 | 41% | 33,4 |
| - continuing operations | US$/kgV | 42,9 | 40% | 30,8 |
| - discontinued operation | US$/kgV | 52,8 | 36% | 38,9 |
| Average realised price | US$/kgV | 25,1 | -33% | 37,4 |
| - continuing operations | US$/kgV | 26,9 | -30% | 38,6 |
| - discontinued operation | US$/kgV | 22,5 | -36% | 34,9 |
The sale of Vanchem was considered to be highly probable as at 30 June 2024. Vanchem was therefore accounted for as held for sale and its operating results for the current and comparative period were reported as discontinued operations.
The financial results for the first six months reflect a challenging start to the year for the Company. The Company recorded an adjusted EBITDA loss of US$14.3 million from continuing operations and an adjusted EBITDA loss of US$19.9 million from discontinued operations and an operating loss of US$18.6 million. Both adjusted EBITDA loss and operating loss were lower than the prior year due to lower realised prices and lower sales volumes, partially offset by lower costs of sales.
Income statement
The income statement summary below is adjusted from the primary statement presentation.
| In US$'000 | H1 2024 | % change | H1 2023 |
| Revenue | 25 550 | -54% | 55 103 |
| Cost of sales excluding depreciation | (28 324) | -5% | (29 743) |
| Other operating income and costs | (5 488) | -7% | (5 893) |
| Administration costs excluding depreciation | (6 067) | -11% | (6 849) |
| Underlying EBITDA | (14 329) | -214% | 12 618 |
| Impairment losses | - | 0% | - |
| Adjusted EBITDA | (14 329) | -214% | 12 618 |
| Depreciation | (4 296) | -10% | (4 757) |
| Operating profit / (loss) | (18 625) | -337% | 7 861 |
| Fair value gain on derivative liability | 107 | 100% | - |
| Share of loss from associate and joint venture | - | -100% | (1 504) |
| Other gains / (losses) | 36 | -101% | (3 375) |
| Net financing expenses | (5 847) | -11% | (6 539) |
| Loss before tax | (24 329) | 584% | (3 557) |
| Income tax | 3 567 | -232% | (2 712) |
| Loss from continuing operations | (20 762) | 231% | (6 269) |
| Loss from discontinuing operations | (24 237) | 289% | (6 224) |
| Net loss for the period | (44 999) | 260% | (12 493) |
Revenue from continuing operations
|
| H1 2024 | H1 2023 |
| Group sales (mtV) | 949 | 1 428 |
| Average realised price (US$/kgV) | 26.9 | 38.6 |
| Revenue (US$'000) | 25 550 | 55 103 |
Revenue of US$25.6 million from continuing operations was 54% lower than the prior year due to a 30% decrease in the average realise price to US$26.9/kgV and a 34% decrease in sales to 949 mtV.
The geographic split of Group sales during the first half of 2024 was 48% to the USA (H1 2023: 49%), 33% to Europe (H1 2023: 29%), 9% to Asia (H1 2023: 6%), 5% to South Africa (H1 2023: 6%), and 5% to the rest of the world (H1 2023: 10%).
During the period, Bushveld continued to prioritise nitro vanadium sales into North America given the higher vanadium prices in the region. Sales into the aerospace and specialty chemical products sectors were also a focus given the price premiums these sectors attract.
Cost analysis
| In US$'000 | H1 2024 | H1 2023 |
| Continuing operations |
|
|
| Cost of sales excluding depreciation | (28 324) | (29 743) |
| Other operating income and costs | (5 488) | (5 893) |
| Administration costs excluding depreciation | (6 067) | (6 849) |
| Total income statement cost excluding depreciation | (39 879) | (42 485) |
| Total units sold (mtV) | 949 | 1 428 |
| Cost per income statement per unit sold (excluding depreciation) (US$/KgV) | 42.0 | 29.8 |
| Sustaining capital | (862) | (1 461) |
| Total cost including sustaining capital | (40 741) | (43 946) |
| Cost per unit sold including sustaining capital from continuing operations (US$/KgV) |
42.9 |
30.8 |
| Cost per unit sold including sustaining capital from discontinued operation (US$/KgV) |
52.8 |
38.9 |
| Cost per unit sold including sustaining capital (US$/KgV) | 47.1 | 33.4 |
Cost per unit sold from continuing operations
The cost per unit sold from continuing operations for the half year (including sustaining capital expenditure) was US$42.9/kgV. This represents a 40% increase relative to the prior year primarily as a result of lower sales volumes, partially offset by the cost factors noted below.
Cost of sales
The cost of sales, excluding depreciation, from continuing operations for the first half of 2024 was US$28.3 million, which was US$1.4 million lower than the prior period primarily due to lower variable production costs incurred.
Other operating income and costs
Other operating income and costs from continuing operations of US$5.5 million decreased by US$0.4 million primarily due to:
· A US$1.9 million reduction in selling and distribution costs to US$2.7 million primarily driven by lower commissions due to the lower average realised sales prices and lower distribution costs due to the lower sales volumes.
· This reduction was partially offset by a US$1.5 million decreased in other operating income primarily due to reduction in foreign exchange gains due to the strengthening of the Rand compared to the US$.
Administration costs
Administration costs, excluding depreciation charges, from continuing operations for the half year, was US$6.1 million. Below is a breakdown of the key items included in administration costs:
| In US$'000 | H1 2024 | H1 2023 |
| Staff costs | 2 482 | 3 235 |
| Professional fees | 544 | 1 846 |
| Other (incl. IT and security expenses) | 3 041 | 1 768 |
| | 6 067 | 6 849 |
Adjusted and underlying EBITDA
Adjusted EBITDA is a factor of volumes, prices and cost of production. This is a measure of the underlying profitability of the Group, which is widely used in the mining sector. Underlying EBITDA removes the effect of impairment charges.
| In US$'000 | H1 2024 | H1 2023 |
| Continuing operations |
|
|
| Revenue | 25 550 | 55 103 |
| Cost of sales | (32 367) | (34 324) |
| Other operating income and costs | (5 488) | (5 893) |
| Administration costs | (6 320) | (7 025) |
| Add: Depreciation and amortization | 4 296 | 4 757 |
| Adjusted EBITDA from continuing operations | (14 329) | 12 618 |
| Adjusted EBITDA from discontinued operation | (19 921) | (2 308) |
| Adjusted EBITDA | (34 250) | 10 310 |
| Add: Impairment losses from continuing operations | - | - |
| Add: Impairment losses from discontinued operation | 12 317 | - |
| Underlying EBITDA from continuing operations | (14 329) | 12 618 |
| Underlying EBITDA from discontinued operations | (7 604) | (2 308) |
| Underlying EBITDA | (21 933) | 10 310 |
|
|
|
|
The Group delivered an adjusted and underlying EBITDA loss of US$14.3 million from continuing operations, a decrease of US$26.9 million compared to the previous year, primarily driven by lower realised sales prices and lower sales volumes, partially offset by lower costs of sales.
Other gains/(losses)
Other gains/(losses) of US$36k consists of a gain recognised on the remeasurement of the Orion production financing arrangement of US$1.2 million partially offset by a write-down of US$1.2 million on the investment in VRFB/CellCube.
Net financing expenses
Net financing expenses were US$5.8 million, US$0.7 million lower than in the prior year.
| In US$'000 | H1 2024 | H1 2023 |
| Finance income | (82) | (235) |
| Interest on borrowings | 4 813 | 6 050 |
| Unwinding of discount | 371 | 382 |
| Interest on lease liabilities | 383 | 322 |
| Other finance costs | 362 | 20 |
| Net finance expenses | 5 847 | 6 539 |
Interest on borrowings primarily reflected the interest on the Orion convertible loan note of US$1.1 million (H1 2023: US$3.7 million), interest on the Orion production financing arrangement of US$2.2 million (H1 2023: US$2.2 million), and interest on the Orion senior term loan of US$1.4 million (H1 2023: $nil).
Loss from discontinued operations
Vanchem was accounted for as a discontinued operation and its operating results for the current and comparative period were reported as net loss from discontinued operations. The net loss from discontinued operations were US$24.2 million, an increase of US$18.0 million compared to the prior year. The increase in the net loss from discontinued operations was primarily due to the impairment loss recognised in order to align the net asset value of Vanchem with the expected discounted sales proceeds of US$32.0 million, decrease in revenue due to a lower average realised price partially offset by lower cost of sales due to costs saving initiatives.
Balance sheet
Assets
The sale of Vanchem was considered highly probable and therefore the assets and liabilities of Vanchem were classified as assets and liabilities held for sale and presented separately under current assets and current liabilities, respectively in the Group's consolidated interim statement of financial position at 30 June 2024.
Property, plant and equipment decreased by US$51.6 million compared to the previous year primarily due to the impairment loss recognised for Vanchem and the reclassification of Vanchem as assets held for sale.
Inventories of US$25.8 million decreased by US$16.4 million compared to the prior year, primarily due to a reclassification of Vanchem as assets held for sale of $11.2 million and the reduction in work-in-progress stocks and weighted average production costs.
Trade and other receivables of US$15.6 million decreased by US$9.4 million compared to the prior year primarily due to the reclassification of Vanchem as assets held for sale of $6.1 million. The remaining decrease is primarily due to the collection of US$1.4 million of the subscription receivables and collection of other trade receivables.
The decrease in cash and cash equivalents to US$1.0 million was primarily due to cash used from operations (US$16.3 million), capital expenditures incurred (US$1.9 million), repayment of finance costs (US$1.9 million), partially offset by net proceeds received from the interim working capital facility (US$18.9 million) and net proceeds received from the equity raise (US$1.4 million).
Liabilities
Total borrowings (excluding leases) of US$116.4 million increased by US$17.9 million compared to the previous year primarily due to the additional funds received from the SPR interim working capital facility of US$18.9 million and the capitalisation of finance costs to borrowings of US$5.9 million, partially offset by the 10% conversion of the Orion convertible loan notes by issuing 124,747,016 new ordinary shares and the repayment of finance costs of US$1.9 million.
The net debt reconciliation below outlines the Group's total debt and cash position:
|
In US$'000 | 30 June 2024 | 31 Dec 2023 | Change |
| Orion production financing arrangement | (35 768) | (35 635) | (133) |
| Orion convertible loan notes | (14 787) | (46 766) | 31 979 |
| Orion senior term loan | (29 658) | - | (29 658) |
| Industrial Development Corporation loans | (6 747) | (6 238) | (509) |
| SPR interim working capital facility | (27 807) | (7 812) | (19 995) |
| Other | (1 664) | (2 124) | 460 |
| Lease liabilities | (8 570) | (8 428) | (142) |
| Total debt | (125 001) | (107 003) | (17 998) |
| Cash and cash equivalents | 1 028 | 1 281 | (253) |
| Net debt | (123 973) | (105 722) | (18 251) |
Cash flow statement
The table below summarises the main components of cash flow during the year:
| In US$'000 | H1 2024 | H1 2023 |
| Operating profit/(loss) | (18 625) | 7 861 |
| Depreciation | 4 296 | 4 757 |
| Other non-cash items | (1 007) | (12 755) |
| Changes in working capital and provisions | 4 337 | (4 571) |
| Taxes paid | (799) | (1 902) |
| Cash outflow from continuing operations | (11 798) | (6 610) |
| Cash inflow/(outflow) from discontinued operation | (4 472) | 5 690 |
| Cash outflow from operations | (16 270) | (920) |
| Sustaining capital expenditures | (1 850) | (1 793) |
| Free cash flow | (18 120) | (2 713) |
| Cash generated from/(used in) other investing activities | 21 | (2 521) |
| Cash generated from/(used in) financing activities | 17 846 | (1 313) |
| Cash outflow | (253) | (6 547) |
| Opening cash and cash equivalents | 1 281 | 10 874 |
| Less cash and cash equivalents classified as held for sale |
(47) |
- |
| Foreign exchange movement | 47 | (585) |
| Closing cash and cash equivalents | 1 028 | 3 742 |
Operating activities
Cash used in operating activities was US$16.3 million, an increase of US$15.3 million from the previous year, primarily driven by the higher operating loss incurred partially offset by the inflow from changes in working capital and provisions.
Investing activities
Cash used in investing activities, including sustaining capital expenditure of US$1.9 million was primarily driven by capital expenditure on property, plant and equipment.
Capital Expenditure (US$' million)
| In US$ millions | H1 24 | H1 23 |
| Vametco - Growth - Sustaining |
- 0.9 |
- 1.5 |
| Vanchem - Growth - Sustaining |
- 0.9 |
- 0.3 |
| Bushveld Energy - Growth - Sustaining |
0.1 - |
2.5 0.0 |
| Total | 1.9 | 4.3 |
Financing activities
Cash generated from financing activities of US$17.8 million comprised of the proceeds received from the SPR interim working capital facility of US$18.9 million and the equity proceeds received of US$1.4 million, partially offset by the repayment of finance costs of $1.9 million and repayment of lease liabilities of US$0.3 million.
Going concern and outlook
We closely monitor and manage liquidity risk by ensuring that the Group has sufficient funds for all ongoing operations. As part of the liquidity planning process, the Directors reviewed the approved Group production outlook and base case cashflow forecast through to 30 September 2025. The base case cashflow forecast has been amended in line with any material changes identified during the year. Equally, where funding requirements are identified from the base case cashflow forecast, appropriate measures are taken to ensure these requirements are tracked and can be met.
We have performed an assessment of whether the Group would be able to continue as a going concern for at least twelve months from balance sheet date. We took into account the financial position, outstanding cash flow commitments from SPR for the balance of 2024, expected future performance of the operations, the debt facilities and debt service requirements, the working capital requirements, capital expenditure commitments and forecasts, expected proceeds from the sale of Vanchem and Mokopane. The Directors have identified and are proactively monitoring options within their control which will improve the Group's liquidity. Additionally, we factored in the favourable relationship with Orion, demonstrated by the restructuring of agreements to accommodate market conditions and constructive engagement in relevant matters.
The Group's ability to continue as a going concern is dependent on its ability to complete the sale of Vanchem and Mokopane and the timing of those sales proceeds, monitoring options within their control, the continued support of Orion, and achieving the planned production levels at the estimated average sales prices of US$29.15/kgV for the remainder of 2024 (which is 8% greater than current prices) and estimated average sales prices of US$34.40/kgV (which is 27% greater than current prices) throughout 2025 which were based on industry analysts' market research.
These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. The interim consolidated financial statements for the period ended 30 June 2024 have been prepared on a going concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its operating and capital costs requirements and pay its debts as and when they fall due for at least twelve months from the date of this report.
Bushveld Minerals Limited
Consolidated Interim Financial Statements for the period ended 30 June 2024
| Consolidated Statement of Profit or Loss | | ||
|
Figures in thousands of US$ |
Notes | 6 months ended 30 June 2024 Unaudited | 6 months ended 30 June 2023 Unaudited |
|
Continuing operations | | | |
| Revenue | | 25,550 | 55,103 |
| Cost of sales | | (32,367) | (34,324) |
| Gross (loss) profit | | (6,817) | 20,779 |
| Other operating income | | 259 | 1,738 |
| Selling and distribution costs | | (2,730) | (4,590) |
| Other mine operating costs | | (1,350) | (1,492) |
| Idle plant costs | | (1,667) | (1,549) |
| Administrative expenses | | (6,320) | (7,025) |
| Operating profit / (loss) | | (18,625) | 7,861 |
| Finance income | | 82 | 235 |
| Finance costs | | (5,929) | (6,774) |
| Other gains / (losses) | | 36 | (3,375) |
| Fair value gain on derivative liability | | 107 | - |
| Share of loss from investments in associate and joint venture | | - | (1,504) |
| Loss before taxation | | (24,329) | (3,557) |
| Taxation | | 3,567 | (2,712) |
| Loss from continuing operations | | (20,762) | (6,269) |
| Loss from discontinued operations, net of taxation | 4 | (24,237) | (6,224) |
| Loss for the period | | (44,999) | (12,493) |
| Loss attributable to: | | | |
| Owners of the parent | | (44,999) | (14,093) |
| Non-controlling interest | | - | 1,600 |
| | | (44,999) | (12,493) |
| Loss per ordinary share | | | |
| Basic loss per share (cents) | 3 | (1.97) | (1.09) |
| Diluted loss per share (cents) | 3 | (1.97) | (1.09) |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.
| Consolidated Statement of Comprehensive Loss | | ||
|
Figures in thousands of US$ |
Notes | 6 months ended 30 June 2024 Unaudited | 6 months ended 30 June 2023 Unaudited |
| Loss for the period | | (44,999) | (12,493) |
| Other comprehensive income / (loss): | | | |
| Items that may be reclassified to profit or loss: | | | |
| Currency translation differences | | 183 | (15,097) |
| Total comprehensive loss | | (44,816) | (27,590) |
| Total comprehensive loss attributable to: | | | |
| Owners of the parent | | (44,816) | (24,716) |
| Non-controlling interest | | - | (2,874) |
| | | (44,816) | (27,590) |
The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements
Consolidated Statement of Financial Position
|
| | |
|
| | |
| |
| Figures in thousands of US$ | Notes | 30 June 2024 Unaudited | 31 December 2023 Audited |
|
Assets |
|
|
|
| Non-current assets Property, plant and equipment |
5 |
48,193 |
99,744 |
| Investment property |
| 2,217 | 2,173 |
| Investments in associate and joint venture |
| 1,080 | 2,360 |
| Deferred tax asset |
| 4,209 | 464 |
| Restricted investment |
| 3,071 | 2,881 |
| Total non-current assets |
| 58,770 | 107,622 |
| Current assets Inventories |
6 |
25,853 |
42,273 |
| Trade and other receivables | 7 | 15,619 | 25,018 |
| Other financial assets |
| 24 | 24 |
| Cash and cash equivalents | 8 | 1,028 | 1,281 |
|
|
| 42,524 | 68,596 |
| Assets held for sale | 4 | 57,678 | 3,700 |
| Total current assets |
| 100,202 | 72,296 |
| Total assets |
| 158,972 | 179,918 |
| Equity and liabilities Share capital |
9 |
28,527 |
26,944 |
| Share premium | 9 | 143,405 | 140,272 |
| Accumulated loss | 9 | (163,005) | (118,006) |
| Share-based payment reserve |
| 261 | 261 |
| Foreign currency translation reserve |
| (46,983) | (47,166) |
| Fair value reserve |
| (1,783) | (1,783) |
| Equity attributable to owners of the parent |
| (39,578) | 522 |
| Non-controlling interest |
| 288 | 288 |
| Total equity |
| (39,290) | 810 |
| Liabilities |
|
|
|
| Non-current liabilities Post retirement medical liability |
|
1,606 |
1,577 |
| Environmental rehabilitation liabilities |
| 7,232 | 16,633 |
| Deferred consideration |
| - | 306 |
| Borrowings | 10 | 111,268 | 38,008 |
| Lease liabilities |
| 7,787 | 7,746 |
| Total non-current liabilities |
| 127,893 | 64,270 |
|
Current liabilities Trade and other payables |
11 |
36,953 |
46,295 |
| Provisions |
| 1,520 | 1,944 |
| Borrowings | 10 | 5,163 | 60,567 |
| Lease liabilities |
| 783 | 682 |
| Deferred consideration |
| 2,586 | 2,304 |
| Current tax payable |
| 2,135 | 3,046 |
|
|
| 49,140 | 114,838 |
| Liabilities relating to assets held for sale | 4 | 21,229 | - |
| Total Current Liabilities |
| 70,369 | 114,838 |
| Total liabilities |
| 198,262 | 179,108 |
| Total equity and liabilities |
| 158,972 | 179,918 |
Consolidated Statement of Changes in Equity
|
Figures in thousands of US$ | Share capital | Share premium | Foreign currency translation reserve | Share-based payment reserve | Fair value reserve | Accumulated loss | Total attributable to equity holders of the group | Non- controlling interest | Total equity |
| Balance at 1 January 2023 | 17,122 | 127,702 | (35,346) | 515 | (1,798) | (39,147) | 69,048 | 36,583 | 105,631 |
| Loss for the period | - | - | - | - | - | (103,927) | (103,927) | (2,842) | (106,769) |
| Other comprehensive loss, net of tax: Currency translation differences | - | - | (11,820) | - | - | - | (11,820) | (853) | (12,673) |
| Other fair value movements | - | - | - | - | 15 | - | 15 | - | 15 |
| Total comprehensive loss for the period | - | - | (11,820) | - | 15 | (103,927) | (115,732) | (3,695) | (119,427) |
| Transaction with owners: Issue of shares |
6,874 |
9,977 |
- |
- |
- |
- |
16,851 |
- |
16,851 |
| Share issue costs | - | (945) | - | - | - | - | (945) | - | (945) |
| Share-based payment | - | - | - | (254) | - | - | (254) | - | (254) |
| Acquisition of non-controlling interest | 2,948 | 3,538 | - | - | - | 25,068 | 31,554 | (33,036) | (1,482) |
| Contribution from non-controlling interest | - | - | - | - | - | - | - | 436 | 436 |
| Audited balance at 31 December 2023 | 26,944 | 140,272 | (47,166) | 261 | (1,783) | (118,006) | 522 | 288 | 810 |
| Loss for the period | - | - | - | - | - | (44,999) | (44,999) | - | (44,999) |
| Other comprehensive income, net of tax: Currency translation reserve | - | - | 183 | - | - | - | 183 | - | 183 |
| Total comprehensive loss for the period | - | - | 183 | - | - | (44,999) | (44,816) | - | (44,816) |
| Issue of shares | 1,583 | 3,133 | - | - | - | - | 4,716 | - | 4,716 |
| Unaudited balance at 30 June 2024 | 28,527 | 143,405 | (46,983) | 261 | (1,783) | (163,005) | (39,578) | 288 | (39,290) |
| Notes | 9 | 9 | | | | | | | |
| Consolidated Statement of Cash Flows | | ||
|
Figures in thousands of US$ |
Notes | 6 months ended 30 June 2024 Unaudited | 6 months ended 30 June 2023 Unaudited |
|
Cash flows from operating activities | | | |
| Loss before taxation from continuing operations | | (24,329) | (3,557) |
| Adjustments for: Depreciation of property, plant and equipment and right-of-use assets |
5 |
4,296 |
4,757 |
| Share of loss from investments in associate and joint ventures | | - | 1,504 |
| Fair value gain on derivative liability | | (107) | - |
| Other (gains) / losses | | (36) | 2,125 |
| Finance income | | (82) | (235) |
| Finance costs | | 5,929 | 6,774 |
| Other non-cash movements | | 7 | (1,613) |
| Foreign exchange differences | | (1,015) | (9,892) |
| Changes in working capital | | 4,338 | (4,571) |
| Income taxes paid | | (799) | (1,902) |
| Net cash used in operating activities related to continuing operations | | (11,798) | (6,610) |
| Net cash used in operating activities related to discontinued operation | | (4,472) | 5,690 |
| Net cash used in operating activities | | (16,270) | (920) |
|
Cash flows from investing activities | | | |
| Finance income | | 82 | 97 |
| Purchase of property, plant and equipment | | (949) | (4,008) |
| Purchase of exploration and evaluation assets | | - | (71) |
| Net cash used in investing activities related to continuing operations | | (867) | (3,982) |
| Net cash used in investing activities related to discontinued operation | | (962) | (332) |
| Net cash used in investing activities | | (1,829) | (4,314) |
|
Cash flows from financing activities | | | |
| Proceeds from borrowings | 10 | 19,025 | 1,294 |
| Lease payments | | (328) | (331) |
| Finance costs | 10 | (1,943) | (2,258) |
| Purchase of non-controlling interest | | (310) | - |
| Equity proceeds (net) | | 1,417 | - |
| Net cash generated from / (used in) financing activities related to continuing operations | | 17,861 | (1,295) |
| Net cash generated used in financing activities related to discontinued operation | | (15) | (18) |
| Net cash generated from / (used in) financing activities | | 17,846 | (1,313) |
|
Total cash and cash equivalents movement for the period | |
(253) |
(6,547) |
| Cash and cash equivalents at the beginning of the period | | 1,281 | 10,874 |
| Less cash and cash equivalents including in assets held for sale | | (47) | - |
| Effect of translation of foreign exchange rates | | 47 | (585) |
| Total cash and cash equivalents at end of the period | | 1,028 | 3,742 |
Notes to the Condensed Consolidated Interim Financial Statements
1. Corporate information and principal activities
Bushveld Minerals Limited ("Bushveld" or the "Company") and its subsidiaries and interest in equity accounted investments (together the "Group") are an integrated primary vanadium producer. The company was incorporated and domiciled in Guernsey on 5 January 2012 and admitted to the AIM market in London on 26 March 2012.
The address of the Company's registered office is 18-20 Le Pollet, St Peter Port, Guernsey. The unaudited condensed consolidated interim financial statements ("consolidated interim financial statements") of the Company for the interim period ended 30 June 2024 comprise of the Company and its subsidiaries and interest in equity accounted investments.
2. Significant accounting policies Basis of accounting
The results presented in this report are unaudited and they have been prepared in accordance with the recognition and measurement principles of UK-adopted International Accounting Standards that are expected to be applicable to the next set of financial statements and on the basis of the accounting policies to be used in those financial statements.
The consolidated interim financial statements do not include all of the information required for full annual financial statements and accordingly, whilst the consolidated interim financial statements have been prepared in accordance with the recognition and measurement principles of the UK-adopted International Accounting Standards, it cannot be construed as being in full compliance with the UK-adopted International Accounting Standards. The financial information contained in this announcement does not constitute statutory accounts as defined by the Companies (Guernsey) Law 2008.
The consolidated interim financial statements have not been audited or reviewed in accordance with International Standard on Review Engagements (UK) 2410. The consolidated financial statements for the period ended 31 December 2023 is based on the statutory accounts for the period ended 31 December 2023. The auditor reported on those accounts which were not qualified but included a material uncertainty related to going concern.
The consolidated interim financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
Going concern
The interim consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.
The Group recorded a net loss after tax of US$45.0 million for the period ended 30 June 2024. As at 30 June 2024 the Group had cash and cash equivalents of US$1.03 million and total borrowings of US$116.43 million.
The Directors closely monitor and manage the liquidity risk of the Group by ensuring that the Group has sufficient funds for all ongoing operations. As part of the liquidity planning process, the Directors reviewed the approved Group production outlook and base case cashflow forecast through to 30 September 2025. The base case cashflow forecast has been amended in line with any material changes identified during the year. Equally, where funding requirements are identified from the base case cashflow forecast, appropriate measures are taken to ensure these requirements are tracked and can be met.
The Group has entered into a revised sales agreement with SPR, which was approved by the shareholders, whereby the Group will sell 100% of Vanchem. The closing of the Vanchem sale remains conditional upon approval by the Competition Tribunal. The Group also entered into revised agreements with Orion Mine Finance ("Orion") whereby the Group received additional funding of US$10 million under the senior term loan facility and the repayment of interest and capital were extended to 31 December 2025.
The Directors have performed an assessment of whether the Group would be able to continue as a going concern for at least twelve months. In their assessment, the Group has taken into account its financial position, outstanding cash flow commitments from SPR for the balance of 2024, expected future performance of its operations, its debt facilities and debt service requirements, its working capital requirements, capital expenditure commitments and forecasts, expected proceeds from the sale of Vanchem and Mokopane. The Directors have identified and are proactively monitoring options within their control which will improve the Group's liquidity. Additionally, the Directors factored in the favourable relationship with Orion, demonstrated by the restructuring of agreements to accommodate market conditions and constructive engagement in relevant matters.
The Group's ability to continue as a going concern is dependent on its ability to complete the sale of Vanchem and Mokopane and the timing of those sales proceeds, monitoring options within their control, the continued support of Orion, and achieving the planned production levels at the estimated average sales prices of US$29.15/kgV for the remainder of 2024 (which is 8% greater than current prices) and estimated average sales prices of US$34.40/kgV (which is 27% greater than current prices) throughout 2025 which were based on industry analysts' market research.
These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. The interim consolidated financial statements for the period ended 30 June 2024 have been prepared on a going concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its operating and capital costs requirements and pay its debts as and when they fall due for at least twelve months from the date of this report.
Accordingly, these interim consolidated financial statements do not include adjustments to the recoverability and classification of recorded assets and liabilities and related expenses that might be necessary should the Group be unable to continue as a going concern.
Use of estimates and judgements
The preparation of consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities as at the date of the consolidated interim financial statements and reported amounts of revenues and expenses during the period ended 30 June 2024. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events which are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Determination of Assets Held for Sale and Discontinued Operations
Critical Judgements in Applying Accounting Policies
Judgement is required in determining whether an asset or disposal group should be classified as held for sale. An asset or disposal group should be classified as held for sale when it is available for immediate sale in its present condition and its sale is highly probable. The Group determined the sale of Vanchem was considered highly probable.
Management also applies judgement to determine whether a component of the Group that either has been disposed of, or is classified as held for sale, meets the criteria of a discontinued operation. The key area that involves management judgement in this determination is whether the component represents a separate major line of business or geographical area of operation. This determination was applied to the sale of Vanchem and the Group concluded that Vanchem was a sperate major line of business and was considered to be a discontinued operation.
Deferred tax assets
Key sources of estimation uncertainty
Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets as well as in the amounts recognised in income in the period in which the change occurs.
Adoption of New Accounting Standards and New Accounting Standards Issued but Not Yet Effective
(a) Adoption of new accounting standards
These consolidated interim financial statements have been prepared following the same accounting policies and methods of computation as the audited annual consolidated financial statements for the year ended 31 December 2023. In addition, the following new accounting pronouncements are effective for annual periods beginning on or after 1 January 2024 and have been incorporated into the consolidated interim financial statements:
- Classification of Liabilities as Current or Non-current (Amendments to IAS 1).
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16 Leases).
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7).
The adoption of these pronouncements did not have a significant impact.
(b) New accounting standards issued but not effective
2. Significant accounting policies (continued)
Certain pronouncements have been issued by the International Accounting Standards Board (IASB) that are mandatory for accounting periods after June 30, 2024:
· Lack of exchangeability (Amendments to IAS 21) which is effective for periods on or after 1 January 2025.
· Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7) which is effective for periods on or after 1 January 2026.
· Presentation and Disclosure in Financial Statements (IFRS 18) which is effective for periods on or after 1 January 2027.
· Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) amendments were to be applied prospectively for annual periods beginning on or after 1 January 2016, however, on 17 December 17 the IASB decided to defer the effective date for these amendments indefinitely. Early adoption is still permitted. The Company does not intend to early adopt these standards.
Pronouncements related to IAS 21, IFRS 9, IFRS 7, IFRS 10 and IAS 28 are not expected to have a significant impact on the consolidated interim financial statements upon adoption and the impact of the introduction of IFRS 18 is under assessment.
3. Loss per share Basic loss per share
Basic loss per share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period excluding ordinary shares purchased by the Company and held as treasury shares.
| | 6 months ended | 6 months ended |
|
Figures in thousands of US$ | 30 June 2024 Unaudited | 30 June 2023 Unaudited |
|
Numerator Net loss from continuing operations attributable to equity holders |
(20,762) |
(7,869) |
| Net loss from discontinued operations attributable to equity holders | (24,237) | (6,224) |
| Net loss attributable to equity holders | (44,999) | (14,093) |
| Denominator (in thousands) Weighted average number of common shares |
2,289,774 |
1,287,148 |
| Basic loss per share from continuing operations attributable to equity holders (cents) | (0.91) | (0.61) |
| Basic loss per share from discontinued operations attributable to equity holders (cents) | (1.06) | (0.48) |
| Basic loss per share attributable to equity holders (cents) | (1.97) | (1.09) |
|
Diluted loss per share | | |
Due to the Group being loss making for the period, instruments are not considered dilutive and therefore the diluted loss per share is the same as basic loss per share for all periods.
4. Assets and liabilities held for sale
Mokopane Vanadium and Iron Ore Project Disposal
|
Figures in thousands of US$ | Vanadium and Iron Ore |
| Balance, 1 January 2023 | 53,469 |
| Capitalised expenditures | 322 |
| Impairment loss | (49,620) |
| Exchange differences | (471) |
| Transfer to asset held for sale | (3,700) |
| Balance, 31 December 2023 and 30 June 2024 | - |
The Group has an interest in Prospecting right 95. The Department of Mineral Resources and Energy ("DMRE") executed a 30-year mining right on 29 January 2020 in favour of Pamish, over five farms: Vogelstruisfontein 765 LR; Vriesland 781 LR; Vliegekraal 783 LR; Schoonoord 786 LR; and Bellevue 808 LR (the "Mining Right") situated in the District of Mogalakwena, Limpopo, which make up the Mokopane Project.
The Mining Right required Pamish to commence mining activities, including in-situ activities associated with the Definitive Feasibility Study ("DFS") by end of January 2021. The Covid-19 pandemic resulted in a significant delay in the commencement of the DFS and the necessary engagement with local communities required to finalise land use arrangements and, consequently, this deadline was not met. Application to the DMRE for an extension to commence mining activities has been submitted and Pamish is awaiting a response.
The Group entered into a sale of shares agreement with SPR on 14 December 2023 to sell its interest in the Mokopane Project for US$3.7 million. The transaction is subject to certain regulatory approvals as well as other customary closing conditions. The Competition Commission approved the sale on 31 May 2024.
At 31 December 2023, the Mokopane intangible asset met the criteria to be classified as held for sale and has been classified as a current asset held for sale on the consolidated statement of financial position. During the year ended 31 December 2023, an impairment charge of US$49.62 million was recognised in the consolidated statements of profit or loss to align the carrying value of the asset with the sales price. The intangible asset forms part of the exploration segment.
Vanchem Disposal
The Group entered into a revised sales agreement with SPR to sell Vanchem for a total consideration of up to US$40 million, comprising of an initial consideration of US$20 million and a deferred consideration of between US$15 million and US$20 million (the "Disposal"). The Disposal was approved by the shareholders on 31 May 2024. The transaction is subject to Competition Tribunal approval as well as other customary closing conditions.
At 30 June 2024, Vanchem met the criteria to be classified as held-for-sale and discontinued operations in accordance with IFRS 5. The results of Vanchem have been restated for the current and comparative year to reclassify the net loss as net loss from discontinued operations. All assets and liabilities relating to Vanchem were classified as assets and liabilities held for sale and presented separately under current assets and current liabilities, respectively in the Group's consolidated statement of financial position at 30 June 2024. Vanchem forms part of the Vandium mining and production segment.
During the six months ended 30 June 2024, an impairment charge of US$12.32 million was recognised in the consolidated statement of profit or loss to align the carrying value of Vanchem with the consideration expected to be received.of US$32 million.
The net loss from discontinued operations from Vanchem for the six month period ended 30 June 2024 and 203 are as follows:
|
Figures in thousands of US$ | 30 June 2024 Unaudited | 30 June 2023 Unaudited |
|
Revenue |
15,523 |
23,325 |
| Cost of sales | (19,365) | (24,621) |
| Gross loss | (3,842) | (1,296) |
| Other operating income | 35 | 520 |
| Impairment losses | (12,317) | - |
| Selling and distribution costs | (262) | (302) |
| Other mine operating costs | (429) | (1,245) |
| Idle plant costs | (4,241) | (2,283) |
| Administration expenses | (1,742) | (1,196) |
| Operating loss | (22,798) | (5,802) |
| Finance income | 26 | - |
| Finance costs | (1,449) | (542) |
| Loss before taxation | (24,221) | (6,344) |
| Taxation | (16) | 120 |
| Net loss from discontinued operations | (24,237) | (6,224) |
The assets and liabilities of Vanchem that are included in the held-for-sale categories are summarized below:
|
| 30 June |
| Figures in thousands of US$ |
|
| Assets | |
| Property, plant and equipment | 36,689 |
| Inventories | 11,159 |
| Trade and other receivables | 6,083 |
| Cash and cash equivalents | 47 |
| Total assets held for sale | 53,978 |
| | |
| Liabilities | |
| Environmental rehabilitation liability | 10,699 |
| Deferred tax liability | 7 |
| Trade and other payables | 10,261 |
| Provisions | 250 |
| Lease liabilities | 12 |
| Total liabilities relating to assets held for sale | 21,229 |
|
Net assets held for sale |
32,749 |
| | |
5. Property, plant and equipment
|
Figures in thousands of US$ | Buildings and other improvements |
Plant and machinery* | Motor vehicles, furniture and equipment |
Right-of-use assets | Waste stripping asset |
Assets under construction |
Total | |
|
Cost At 1 January 2023 |
6,575 |
178,548 |
1,454 |
7,620 |
1,782 |
14,564 |
210,543 | |
| Additions | - | - | 245 | 1,729 | 616 | 5,454 | 8,044 | |
| Changes in environmental rehabilitation liabilities | - | (336) | - | - | - | - | (336) | |
| Scrapping of obsolete assets | (34) | (4,443) | (192) | (424) | - | - | (5,093) | |
| Transfers within PPE | 264 | 2,106 | - | - | - | (2,370) | - | |
| Exchange differences | (556) | (12,055) | (119) | (664) | (157) | (1,301) | (14,852) | |
| At 31 December 2023 (audited) | 6,249 | 163,820 | 1,388 | 8,261 | 2,241 | 16,347 | 198,306 | |
| Additions | - | - | 1 | - | - | 2,231 | 2,232 | |
| Transfer to assets held for sale | (4,851) | (98,322) | (306) | (140) | - | (1,747) | (105,366) | |
| Exchange differences | 124 | 2,542 | 27 | 167 | 45 | 1,020 | 3,925 | |
| At 30 June 2024 (unaudited) | 1,522 | 68,040 | 1,110 | 8,288 | 2,286 | 17,851 | 99,097 | |
| Accumulated depreciation At 1 January 2023 |
(2,386) |
(77,695) |
(932) |
(1,741) |
(382) |
- |
(83,134) | |
| Scrapping of obsolete assets | 32 | 3,651 | 191 | 424 | - | - | 4,298 | |
| Depreciation charge for the year | (331) | (14,120) | (185) | (433) | (1,422) | - | (16,491) | |
| Impairment | (421) | (7,750) | (14) | - | - | (37) | (8,222) | |
| Exchange differences | 198 | 4,530 | 73 | 144 | 42 | - | 4,987 | |
| At 31 December 2023 (audited) | (2,908) | (91,384) | (867) | (1,605) | (1,761) | (37) | (98,562) | |
| Transfer to assets held for sale | 2,805 | 65,488 | 240 | 113 | - | 31 | 68,677 | |
| Depreciation charge for the period | (162) | (6,219) | (91) | (225) | (476) | - | (7,173) | |
| Impairment loss recognised in income | (687) | (11,630) | - | - | - | - | (12,317) | |
| Exchange differences | (61) | (1,362) | (18) | (38) | (48) | - | (1,527) | |
| At 30 June 2024 (unaudited) | (1,013) | (45,107) | (736) | (1,756) | (2,286) | (6) | (50,904) | |
|
Net Book Value | | | | | | | | |
| At 31 December 2023 (audited) | 3,341 | 72,436 | 521 | 6,656 | 480 | 16,310 | 99,744 | |
| | | | | | | | | |
| At 30 June 2024 (unaudited) | 509 | 22,933 | 374 | 6,532 | - | 17,845 | 48,193 | |
|
*Include decommissioning asset. | | | | | | | | |
At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Vanchem Cash Generating Unit ("CGU")
An impairment loss of US$12.32 million was recognised for the period ended 30 June 2024 in the consolidated statement of profit or loss within loss from discontinued operations to align the carrying value of Vanchem with the sales price.
6. Inventories
| Finished goods | 14,040 | 12,702 |
| Work in progress | 5,286 | 15,566 |
| Raw materials | 761 | 2,510 |
| Consumable stores | 5,766 | 11,495 |
| | 25,853 | 42,273 |
The Group recognised a net realisable value write down of finished goods amounting to US$0.56 million (31 December 2023: US$0.84 million) and work in progress amounting to US$0.18 million (31 December 2023: US$0.94 million).
7. Trade and other receivables
| Financial instruments: Trade receivables | 1,818 | 7,590 |
| Other receivables | 438 | 525 |
| Expected credit losses | (86) | (116) |
| Subscription receivables | 12,500 | 13,917 |
| Non-financial instruments: Value-added taxes |
895 |
2,510 |
| Deposits | 25 | 133 |
| Prepaid expenses | 29 | 459 |
| Total trade and other receivables | 15,619 | 25,018 |
|
Categorisation of trade and other receivables | | |
Trade and other receivables are categorised as follows in accordance with IFRS 9: Financial Instruments:
| At amortised cost | 14,670 | 21,916 |
| Non-financial instruments | 949 | 3,102 |
| | 15,619 | 25,018 |
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 15-90 days and therefore are all classified as current.
The fair value of trade and other receivables approximate the carrying value due to the short maturity.
8. Cash and cash equivalents
| Cash and cash equivalents consist of: | | |
| Cash at bank and in hand | 1,002 | 1,280 |
| Short-term deposits | 26 | 1 |
| | 1,028 | 1,281 |
Cash and cash equivalents (which are presented as a single class of assets on the face of the statement of financial position) comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less.
The fair value of the cash and cash equivalents approximates the carrying value due to the short maturity.
9. Share capital and share premium
| |
Number of |
Share capital | Share premium | Total share capital and premium |
| shares | US$ '000 | US$ '000 | US$ '000 | |
| At 1 January 2023 | 1,287,818,281 | 17,122 | 127,702 | 144,824 |
| Shares issued - Mustang backstop agreement | 270,393,578 | 1,886 | - | 1,886 |
| Shares issued - Acquisition of minority interest | 232,836,255 | 2,948 | 3,538 | 6,486 |
| Shares issued - Equity raise (net of cost) | 395,897,277 | 4,988 | 9,032 | 14,020 |
| At 31 December 2023 (audited) | 2,186,945,391 | 26,944 | 140,272 | 167,216 |
| Shares issued - Orion conversion (note 10) | 124,747,016 | 1,583 | 3,133 | 4,716 |
| At 30 June 2024 (unaudited) | 2,311,692,407 | 28,527 | 143,405 | 171,932 |
The Board may, subject to Guernsey Law, issue shares or grant rights to subscribe for or convert securities into shares. It may issue different classes of shares ranking equally with existing shares. It may convert all or any classes of shares into redeemable shares. The Company may also hold treasury shares in accordance with the law. Dividends may be paid in proportion to the amount paid up on each class of shares.
As at 30 June 2024 the Company owns 670,000 (31 December 2023: 670,000) treasury shares with a nominal value of 1 pence.
Shares issued
Mustang Backstop Agreement
The Company entered into an investment agreement with Mustang whereby the holders of the Mustang convertible loan notes ("CLN") would be able to request the issuance of new shares if Mustang's shares had not been readmitted to trading on the LSE by 31 July 2023.
In August 2023, each of the CLN holders had elected to redeem their CLNs and were issued 270,393,578 new ordinary shares of one pence each in Bushveld.
Acquisition of Minority Interest
The Company acquired on 20 December 2023, the 26% minority interest in Bushveld Vametco Holdings owned by a Black Economic Empowerment ("BEE") consortium in return for the issue of 232,836,255 shares in the Company, cash payment of ZAR18 million and the cancellation of a US$0.51 million loan.
Equity Raise
The Company completed an equity raise on 27 December 2023 whereby it issued 395,897,277 new ordinary shares at a price of three pence per share for gross proceeds of US$14.97 million. The Company incurred transaction costs of US$0.95 million of which US$0.25 million was paid.
Orion Conversion
As part of the refinancing of the convertible loan notes, US$4.72 million of the debt obligation was settled by issuing 124,747,016 shares to Orion.
Nature and purpose of other reserves Share premium
The share premium reserve represents the amount subscribed for share capital in excess of nominal value.
Share-based payment reserve
The share-based payment reserve represents the cumulative fair value of share options granted to employees.
Foreign exchange translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of financial statements of foreign operations.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of financial assets at fair value through other comprehensive income until the assets are derecognised or impaired and actuarial changes recognised on the post retirement medical aid liability.
Retained income reserve
The retained income reserve represents other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
| | 30 June | 31 December |
| 2024 Unaudited US$ '000 | 2023 Audited US$ '000 | |
|
10. Borrowings | | |
| Orion production financing agreement ("PFA") | 35,768 | 35,635 |
| Orion convertible loan notes ("CLN") | 14,787 | 46,766 |
| Orion senior term loan | 29,658 | - |
| SPR interim working capital facility | 27,807 | 7,812 |
| Industrial Development Corporation ("IDC") shareholder loan | 2,797 | 2,664 |
| IDC property, plant and equipment loan | 3,950 | 3,574 |
| Other | 1,664 | 2,124 |
| | 116,431 | 98,575 |
|
Split between non-current and current portions Non-current |
111,268 |
38,008 |
| Current | 5,163 | 60,567 |
| | 116,431 | 98,575 |
| |
Orion PFA |
Orion Term Loan |
Orion CLN | SPR interim working capital facility |
IDC loans |
Other |
Total |
|
| US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| Balance, 1 January 2023 | 35,146 | - | 39,742 | - | 5,480 | 2,762 | 83,130 |
| Cash changes: | | | | | | | |
| Proceeds from borrowings | - | - | - | 7,505 | 942 | 543 | 8,990 |
| Repayment of principle and interest | (3,859) | - | - | (263) | - | (1,375) | (5,497) |
| Non-cash changes: | | | | | | | |
| Finance costs(1) | 4,450 | - | 7,056 | 420 | 590 | 225 | 12,741 |
| Fair value gain on derivative liability | - | - | (32) | - | - | - | (32) |
| Remeasurement of financial liabilities | - | - | - | - | (436) | - | (436) |
| Exchange differences | (102) | - | - | 150 | (338) | (31) | (321) |
| Balance, 31 December 2023 (audited) | 35,635 | - | 46,766 | 7,812 | 6,238 | 2,124 | 98,575 |
| Cash changes: |
|
|
|
|
|
|
|
| Proceeds from borrowings | - | - | - | 18,949 | 76 | - | 19,025 |
| Repayments of principle and interest | (920) | - | - | (488) | - | (535) | (1,943) |
| Non-cash changes: | | | | | | | |
| Refinancing of convertible loan notes | - | 28,293 | (33,009) | - | - | - | (4,716) |
| Finance costs(2) | 2,244 | 1,365 | 1,137 | 768 | 295 | 66 | 5,875 |
| Fair value gain on derivative liability | - | - | (107) | - | - | - | (107) |
| Remeasurement of financial liabilities | (1,198) | - | - | - | - | - | (1,198) |
| Exchange differences | 7 | - | - | 766 | 138 | 9 | 920 |
| Balance, 30 June 2024 (unaudited) | 35,768 | 29,658 | 14,787 | 27,807 | 6,747 | 1,664 | 116,431 |
(1)Finance costs include capitalised finance costs of US$0.59 million to property,plant and equipment.
(2)Finance costs include capitalised finance costs of US$0.29 million to property, plant and equipment.
Orion Mine Finance Production Financing Agreement
The Group signed a long-term production financing agreement ("PFA") of US$30 million with Orion Mine Finance ("Orion") in December 2020, primarily to finance its expansion plans at Bushveld Vametco Alloys Proprietary Limited and debt repayment. Exchange control authorisation from the South Africa Reserve Bank Financial Surveillance Department was granted in October 2020.
PFA Details
The Group will repay the principal amount and pay interest via quarterly payments determined initially as the sum of:
- a gross revenue rate (set at 1.175% for 2020 and 2021 and 1.45% from 2022 onwards, subject to adjustment based on applicable quarterly vanadium prices) multiplied by the gross revenue for the quarter; and
- a unit rate of US$0.443/kgV (adjusted annually for inflation) multiplied by the aggregate amount of vanadium sold for the quarter.
First Amendment
The Group entered into a first amendment to the agreement on 6 August 2021. In terms of the amendment, US$17.8 million of the funds ringfenced for the Vametco Phase 3 Expansion was reallocated to Vanchem mainly for capital expenditure on Kiln-3.
The original PFA had a cap of 1,075 mtV per quarter. This amounted to 4,300 mtV per annum expected from 2024 onwards following the completion of the Vametco Phase 3 expansion project. The amended agreement, with the addition of the Vanchem production volumes from 1 July 2021 resulted in the initial cap of 4,300 mtV being brought forward, from 1 July 2022 instead of from 2024. As a result of the amendment, the Group recognised a gain on the remeasurement of the liability of US$1.2 million.
Second Amendment
The Group entered into a second amendment to the agreement on 28 June 2024. In terms of the amendment, the quarterly repayments for 31 March 2024, 30 June 2024 and 30 September 2024 will be deferred and shall be paid in four equal instalments in 2025.
Orion Mine Finance Convertible Loan Notes Instrument
The Company subscribed to a US$35 million convertible loan notes instrument in December 2020 (the "Instrument") with Orion Mine Finance ("Orion"). The Company entered into an agreement on 27 November 2023 with Orion to extend the maturity date of the Instrument to 31 January 2024 and refinanced the Instrument as follows:
· US$4.7 million of the convertible debt obligations were capitalised into a subscription for 124,747,016 new ordinary shares (see note 9);
· A new convertible loan note of US$14.1 million;
· A term senior loan of US$28.3 million; and
· Supplemental royalty.
Orion Mine Finance New Convertible Loan Notes Instrument
The Group entered into a US$14.1 million new convertible loan note instrument ("the Instrument") on 31 January 2024 with the following terms:
· A fixed 12% per annum coupon and maturity date of 30 June 2028.
· All interest will accrue and be capitalised on a quarterly basis in arrears but compounded annually.
· Accumulated capitalised and accrued interest is convertible into Bushveld ordinary shares. All interest and principal, to the extent not converted into ordinary shares, is due and payable at maturity date.
· Conversion price set at 3.99 pence.
· The Group has a one-time right to redeem 50% (in whole and not in part) of the principal and interest outstanding on 30 June 2026, subject to the right of Orion to elect instead to covert the amount.
The Instrument have been accounted for as a loan and a derivative liability as the conversion will result in a variable amount of shares.
| | Amortised costs |
Fair value |
Total |
| | US$ '000 | US$ '000 | US$ '000 |
| Inception | 13,304 | 842 | 14,146 |
| Finance costs and fair value gain | 748 | (107) | 641 |
| Balance, 30 June 2024 | 14,052 | 735 | 14,787 |
|
Orion Mine Finance Senior Term Loan | | | |
The Group entered into a US$28.3 million senior term loan ("Term Loan") agreement on 31 January 2024 with the following terms:
· Interest rate of 6.0% ("Margin") plus the greater of (i) 3-month Secured Overnight Financing Rate ("SOFR") and
(ii) 3.0% per annum.
· Interest payable quarterly in arrears in cash starting from the last business day of the quarter in which the closing of the transaction occurs and on the last business day of each quarter thereafter. In the event that the Company has insufficient cash available to pay interest on its due date, the interest due on that date shall continue to accrue. While there is a continuing default, the Margin will be increased by 3%.
· Principle repayments of 25% on 30 June 2024, 30% on 30 June 2025 and the outstanding balance on 30 June
2026.
· The Term Loan may be prepaid in whole or in part at any time, subject to early redemption fees.
· Secured against certain group companies and associated assets.
On 28 June 2024, the Group entered into a revised Term Loan agreement whereby the Group will receive additional funding of up to US$10 million. The repayment of interest and capital on the Term Loan was also amended whereby the repayment of both interest and capital will only start on 31 December 2025 and will consist of equal quarterly instalments with the final payment on 31 December 2029.
The Group received the additional US$10 million funding on 20 August 2024.
Orion Mine Finance Supplemental Royalty
The Group entered into a supplemental royalty agreement on 31 January 2024 with the following terms:
· Royalty payment rate of 0.264% with a realised price per kgV of less than US$47/kgV.
· Royalty payment rate of 0.216% with a realised price per kgV of greater than US$47/kgV.
· The later of 30 June 2027 and when the Term Loan has been fully repaid, the repayment rate will reduce by 80% and shall be payable for the life of the Vametco operation.
On 28 June 2024, the Group entered into a revised Supplemental Royalty Agreement which increased the royalty rate from 0.264% up to 0.5% depending on the amount of the additional drawdown on terms senior loan facility and reducing by 50% at the term loan maturity.
SPR Interim Working Capital Facility
Bushveld Vanchem ("Vanchem") entered into a loan agreement with SPR on 19 September 2023 whereby SPR borrowed ZAR150.0 million to Vanchem.
The loan bears interest, which is payable in cash every two weeks, in the following amount:
· If the Vanadium Price is less than US$35/kgV, an amount equal to 0.54% of ZAR150,000,000;
· If the Vanadium Price is equal to or more than US$35/kgV but less than US$40/kgV, an amount equal to 0.58% of ZAR150,000,000; and
· If the Vanadium Price is equal to or more than US$40/kgV, an amount equal to 0.62% of ZAR150,000,000.
The loan is repayable in full on the maturity date, which is the first of:
· The date on which the lender gives a step-in notice (this is when an event of default continues for more than 30 days); or
· The date on when the Vanchem and Mokopane Acquisition have been fully implemented; or
· First anniversary of the advance date (22 September 2024).
The loan is secured by a Mortgage Bond of ZAR750 million over the movable property of Vanchem and Notarial Bond of ZAR750 million over the immovable property of Vanchem.
The Group incurred transaction costs of US$0.41 million which have been capitalised and offset against the carrying amount of the loan and are being amortised using the effective interest rate method.
The loan agreement was amended to include the receipt of US$12.5 million (ZAR237.26 million) which is non-interest bearing and repayable on the closing of the Vanchem sale.
The loan agreement with SPR was also amended to include further drawdowns of US$6.49 million (ZAR118.8 million) and the maturity date was amended by updating it to the second anniversary of the advance date (22 September 2025). The loan amount outstanding will be set-off against the Vanchem sales proceeds on closing on the transaction.
Industrial Development Corporation Shareholder Loan
Bushveld Electrolyte Company ("BELCO") is 55% owned by Bushveld Energy Company ("BEC") and 45% by the Industrial Development Corporation ("IDC"). The loan represents the IDC's contribution to BELCO and consists of the initial capitalised cost of ZAR4.38 million and the subsequent subscription amount of ZAR72.71 million. The loan is interest free, unsecured, subordinated in favour of BELCO's creditors and has no fixed term of repayment and shall only be repaid from free cash flow when available. BELCO has the unconditional right to defer settlement until it has sufficient free cash flow to settle the outstanding amount, which is estimated at the end of 2028. The loan has been classified as non-current.
The shareholder loan is measured at the present value of the future cash payments discounted using an interest rate of 8.5%, which is the estimated prevailing market rate. The difference between the fair value and the nominal amount of US$0.43 million (31 December 2022: US$1.79 million) was recognised as a capital contribution from the non-controlling interest.
A general notarial bond for a minimum amount of ZAR140 million plus an additional sum of 30% for ancillary costs and expenses was registered over all the movable assets owned by BELCO.
Industrial Development Corporation Property, Plant and Equipment Loan
The IDC provided a property, plant and equipment loan to BELCO as part of the funding for the construction of the electrolyte plant. The loan bears interest at the South African prime rate plus 2.5% margin and is repayable in 84 equal monthly instalments starting in July 2024. On 27 March 2024, the IDC amended the loan agreement by extend the repayment date to 31 December 2026 and extended the repayment terms to 100 months.
Development Bank of Southern Africa - Facility Agreement
Lemur Holdings Limited entered into a US$1.0 million facility agreement with the Development Bank of Southern Africa Limited in March 2019. The purpose of the facility is to assist with the costs associated with delivering the key milestones to the power project. The repayment is subject to the successful bankable feasibility study of the project at which point the repayment would be the facility value plus an amount equal to an Internal Rate of Return ("IRR") of 40% capped at 2.5 times, whichever is lower. As at 30 June 2024, US$1.0 million (31 December 2023: US$1.0 million) was drawn down.
The Development Bank of South Africa approved the sale of the Group's interest in the Imaloto Coal Project including their outstanding debt balance.
Nesa Investment Holdings ("Nesa")
The Group entered into a loan agreement with Nesa to fund US$0.81 million (ZAR12.08 million) bearing interest at South African prime rate plus 3.5% margin. The maturity date of the loan was extended from 30 August 2023 to 30 August 2024 and the repayments will consist of the following:
· Accrued interest up to 31 August 2023 repaid on 31 August 2023;
· ZAR2.00 million capital repayment on 21 September 2023; and
· Thereafter 10 consecutive monthly payments starting from 30 November 2023.
The Group entered into a second loan agreement with Nesa to fund US$0.54 million (ZAR10.0 million) bearing interest at South African prime rate plus 4% margin. The maturity date of the loan was extended to 31 August 2026 and the repayments will consist of the following:
· Accrued interest up to 31 October 2023 repaid on 31 October 2023;
· ZAR0.53 million capital and interest repayment on 30 November 2023; and
· Thereafter 11 consecutive quarterly payments starting from 29 February 202
| | 30 June | 31 December |
| 2024 Unaudited US$ '000 | 2023 Audited US$ '000 | |
|
11. Trade and other payables | | |
| Financial instruments: Trade payables |
32,036 |
41,784 |
| Trade payables - related parties | 11 | 10 |
| Accruals and other payables | 4,817 | 4,461 |
| Non-financial instruments: VAT |
89 |
40 |
| | 36,953 | 46,295 |
|
Financial instrument and non-financial instrument components of trade and other payables | | |
| At amortised cost | 36,864 | 46,255 |
| Non-financial instruments | 89 | 40 |
| | 36,953 | 46,295 |
Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for trade purchases is 90 days.
The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms.
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
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