Integrated Vanadium producer, Bushveld Minerals (LON:BMN), released a rise in first quarter production figures at their flagship Vandium mine on Monday.
Output increased at the Vametco mine despite disruption caused by coronavirus and heavy rain. The Vametco mine produced 652 mtV in the first, up from 649 mtV in the same period a year ago.
However, whilst production was disrupted by the lockdown, Bushveld Minerals said sales jumped 77% in the first quarter because of higher production in Q4 2019 and generally higher demand.
Bushveld Minerals has a 76% stake in the Vametco vanadium mine which has seen increased demand for its trademark Nitrovan product.
As a vertically integrated producer, Bushveld is also working on vanadium redox flow batteries (VRFB) with a range of projects including use across the gird in South Africa and modular batteries solutions. Bushveld Minerals also has ambitions for a VRFB investment platform and a series of recent acquisitions and deals demonstrate their intent.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:
“We are fortunate to operate in a country whose leadership has taken early decisive action to limit the spread of the Covid-19 virus while ensuring that we build the necessary public health care capacity and identify fiscal responses to manage the coming wave of infections, while treatments and vaccines are still under development. Navigating this situation requires us to meet the immediate challenges of ensuring the safety and health of our workers, sustain business continuity and ensure readiness to scale back up to full capacity in due course, while also supporting the fight against Covid-19 among our host communities.
“We used the lockdown period to strengthen our health and safety protocols together with business continuity measures, conducted maintenance and processed intermediary stockpiles, as per the guidelines received from our authorities. We are pleased that both Vametco and Vanchem are safely increasing production to normal levels.”
In addition to the measures undertaken to combat COVID-19, Fortune Mojapelo touched on the cash position of Bushveld and how they were managing Capex through the crisis.
“From a liquidity perspective, we started the year with a healthy cash balance. We retain a cautiously positive growth outlook on the vanadium market and the Company’s role therein. This notwithstanding, we have undertaken a review of our capital spending, deferring some non-essential capital expenditure for the near term whilst preserving the long term integrity of our business and still positioning the company for growth in the vanadium market in the medium to long term. Furthermore, to enhance our liquidity position and financial flexibility we drew down the full ZAR375 million of bank debt facilities. Meanwhile, the Company’s finances have benefitted from a weakening Rand, given its revenue and cost bases are mostly foreign currency and local currency denominated, respectively. This places us in a stronger position to navigate through this evolving situation.
CEO Fortune Mojapelo continued with his feelings that Bushveld could come out of the crisis stronger than when the went in.
“We are confident that the measures we have taken will enable us to build an even more resilient Bushveld Minerals, well positioned to exploit the upturn when it comes.”
“We are releasing this announcement later than we would have typically done. This has been necessitated by the need to better understand and so provide clarity on the impact of the pandemic and the fast-evolving environment and regulatory landscape we are operating in. We also expect to be in a better position to disclose more on our renewed plans and capital expenditure requirements in our 2019 full year results announcement, when we believe there will be more clarity on what the rest of the 2020 financial year will hold.”