The operational stability and improved production performance achieved by Aim-listed Bushveld Minerals in the last two months of the interim period ended June 30 were carried through into the first two months of the second half of the current financial year, which bodes well for reducing unit costs in the remainder of the year, CEO Fortune Mojapelo says.

“We are confident of maintaining this rhythm, putting us on course to meet our production and cost guidance for the full year,” he notes.

For the six months ended June 30, the group earned revenue of $47-million, a 9% increase year-on-year, supported by an improved average realised price of $29.24/kg of vanadium, partly offset by lower sales volumes in the period of 1 608 t of vanadium.

Group production for the period was 1 574 t of vanadium, a 5.2% year-on-year decrease as a result of unplanned stoppages, a 35-day planned maintenance shutdown during the first quarter and the unprotected industrial action at its Vametco operation, in the North West, in April.

An improved operational performance at Vametco post the maintenance programme and other operational enhancements initiated by the new management, increased second-quarter production by 28.8% quarter-on-quarter, which, combined with the higher production at Vanchem, resulted in group production for the six months being 13.4% higher year-on-year.

The operational stability has laid a platform for sustainable growth and lower unit costs for the rest of the year in line with production cash cost guidance at both plants.

Bushveld reported a loss before interest, taxes, depreciation and amortisation of $10.8-million, primarily as a result of a stronger rand:dollar exchange rate on costs, resulting in a negative impact of $7.3-million.  

The improved operational performance at Vametco in the period was not sufficient to offset the challenging start in the previous quarter.

Bushveld has sustaining capital expenditure of $6.1-million, supporting the recent operational stability.

Cash and cash equivalents at period-end was $31.6-million.

About $12.7-million was realised from the sale of the investment in Invinity Energy Systems and the profit on the sale is not included in earnings before interest, taxes, depreciation and amortisation.

The profit realised on the original investment of $5-million was about $7.7-million.

Net debt at period-end was $54.4-million, including a production financing agreement (PFA) of $29.3-million.

Bushveld is on track to meet full-year group production guidance of between 3 400 t and 3 600 t and ramping up at Vanchem using the reallocated PFA capital ringfencing, to increase group production to a steady-state run rate of between 5 000 t and 5 400 t by the end of 2022.