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Bushveld achieves highest quarterly production rate in two years

31st July 2019

By: Rebecca Campbell

Creamer Media Senior Deputy Editor

     

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London Aim-listed but South Africa-based miner Bushveld Minerals has reported that its 74%-owned Vametco vanadium mine – currently the company’s only operating mine – recorded its highest quarterly production rate in more than two years during the second quarter of this year (2Q19). Production of vanadium during the quarter came to 742 t.  This represented a 14.3% increase over the first quarter (1Q19) figure of 649 t. The 2Q19 number was also 18% up on the output of 629 t during the second quarter of last year (2Q18). (Note: all figures are based on unaudited provisional estimates.)

For the first half of this year (1H19) vanadium production came to 1 392 t, a 2.4% improvement over the 1 360 t of the same period last year (1H18). In its statement, Bushveld Minerals said it was on course to meet its 2019 guidance for total yearly production of 2 800 t to 2 900 t. A number of productivity initiatives would continue to be implemented during the second half of this year. Consequently, its guidance remained unchanged.

“Results from work under the Transformation Programme at Vametco, aimed at establishing excellence and stability, continue to be reflected in the operating performance with Q2 [2Q] 2019 being a record quarter since the same quarter in 2017,” affirmed Bushveld Minerals CEO Fortune Mojapelo. “In addition, Vametco generated an Eebitda [earnings before interest, taxes, depreciation and amortisation] of $49-million in the first half of the year and an Ebitda margin in excess of 50%.”

During 2Q19 the company sold 607 t of vanadium, a 19.6% increase over 1Q19, but a 14.8% fall in relation to 2Q18. For 1H19, sales totalled 1 115 t, a 20.5% drop in comparison to 1H18. Regarding prices, the average Metal Bulletin vanadium price for 2Q19 was $39.4/kg, which was a 46.3% fall in comparison to 1Q19 and 43.1% down on 2Q18. For 1H19, the average price was $56.3/kg, which was a 13.9% decline in relation to 1H18.

Underlying production costs (excluding administrative expenses, depreciation, “general”, royalties and selling) also went down. During 2Q19 they amounted to $16.4/kg, which was 11.7% down on 1Q19 and 22.6% down on 2Q18. For 1H19, production costs came to $17.4/kg, which was 13.7% less than during 1H18.

2Q19 revenues (net of all sales commissions) came to $30-million, which was a drop of 32.6% in comparison to 1Q19 and a fall of 36.2% in relation to 2Q18. The revenues for 1H19 were $74.3-million, down 8.6% on the $81.2-million of 1H18.

Ebitda for 2Q19 were $16.9-million, a fall of $46.9% as against 1Q19 and 35.5% in relation to Q218. However, the Ebitda for 1H19, at $48.6-million, were 14.6% higher than the $42.4-million figure for 1H18.  

Bushveld Minerals also owns an energy storage technology company, Bushveld Energy. It is also in the process of acquiring vanadium processor Vanchem, a transaction that should now conclude by the end of October this year. “I am pleased by the solid performance the Group has achieved during the first half of the year and I look forward to an even stronger second half,” said Mojapelo.

Edited by Creamer Media Reporter

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