Bushveld Minerals has provided an operational update for the three months ending March 2019 in respect of its Vanadium business.
This consists of Bushveld Vametco (Vametco), the Brits Vanadium Project (Brits) and the Mokopane Project (Mokopane).
“We ended the quarter on a very strong note, with the best monthly production output from Vametco in more than 21 months," states Bushveld Minerals CEO, Fortune Mojapelo.
"This reflects the initial work completed under the Transformation Programme, announced earlier this year, which resulted in improvements in several key areas of the flow sheet, including scheduling, feed grade and overall plant recoveries.
“Furthermore, as part of the Transformation Programme we have undertaken several changes within the leadership team at Vametco, including the appointment of Bertina Symonds as Vametco’s General Manager.
"In addition, Lyndon Williams, previously Vametco’s COO, has been appointed as Group Vanadium Specialist in support of operations integration and technical support to the Group's product marketing initiatives; and William Steinberg, previously Vametco’s Works Manager, has been appointed as the new Chief Transformational Officer, responsible for driving the operations improvement programme.
“As revenue at Bushveld Minerals and earnings generator and thus engine for growth it is imperative that Vametco operates to its full potential.
"It is for this reason that we initiated the Transformation Programme, designed to ensure that we maximise production throughput, minimise costs on the back of the improvements implemented by our motivated and fully engaged workforce.
“We are pleased to provide 2019 production guidance for Vametco of 2,800 mtV to 2,900 mtV, which reflects continued expected improvements under the Transformation Programme and represents an overall production increase of between 9 and 13% on the previous year.
"This does not include any contribution from the proposed acquisition of the Vanchem plant, which we anticipate to complete as soon as July and no later than October.
“We are confident of steadily delivering on Vametco’s productivity targets and, with the recently announced conditional acquisition of the Vanchem vanadium project for US$68 million, Bushveld Minerals is on a clear path to achieving its long term capacity target of 10,000 mtV of annual production capacity.
"These initiatives will significantly enhance our competitive position in the Vanadium market over the coming years.”
- Vametco’s production for Q1 2019 was 649 mtV in the form of NitrovanTM from magnetite concentrate, which was consistent with Q4 2018 (Q4 2018: 657 mtV)
- During Q1 2019 the Company commenced several productivity initiatives which were identified as part of the transformation programme announced on 30 January 2019 to enhance Vametco’s production efficiency
- Vametco has seen an improvement in mine production scheduling, vanadium grade in kiln feed, together with an increase in the hourly feed rate to the kiln and recovery. In addition, overall plant recovery has seen significant improvements
- These improvements resulted in production for March 2019 of 270 mtV, which is the highest monthly production rate achieved by Vametco in the past 21 months
- Vametco production guidance of 2,800 mtV to 2,900 mtV is expected for the 2019 calendar year, supported by improved operating performance, representing a 9 to 13% increase relative to 2018 production (2018: 2,560 mtV)
- Unit production cost of US$18.90/KgV to US$19.50KgV is expected for the 2019 calendar year, underpinned by economies of scale. This represents a two to four per cent reduction relative to 2018 unit cost (2018: US$19.70/kgV)
- Production volumes are expected to be skewed towards the second half of the year, due to a 24 day planned maintenance programme during the months of June and July.
- Vametco’s production was not affected by recent power rationing implemented by Eskom, the South African national utility, during the month of March
- Bertina Symonds was appointed General Manager of Vametco
- An updated Mineral Reserve and Resource Estimate for Vametco will be published once the final stages of review have been completed.
- The sample analysis results for the 10 boreholes from the second phase of exploration drilling at Brits (BVL009-BVL019, excluding BVL018) received in March 2019, indicated consistency in grade of the Lower Seam with a weighted average V2O5 grade in magnetite concentrate of 1.66%
- The positive results and high grades demonstrate the deposit's ability to be a future source of raw material for the Vametco plant and concentrate feed for Vanchem if required.
- The Maiden Mineral Resource Estimate for Brits is expected in Q2 2019