London AIM-listed but South African-based miner Bushveld Minerals has reported that its 74%-owned Vametco vanadium mine – currently the company’s only operating mine – posted 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 on 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). (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 on 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 year 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 2Q19 being a record quarter since the same quarter in 2017,” affirmed Bushveld Minerals CEO Fortune Mojapelo. “In addition, Vametco generated an ebitda (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 on 1Q19, but a 14.8% fall in relation to 2Q18. For 1H19, sales totalled 1 115 t, a 20.5% drop, compared with 1H18. Regarding prices, the average Metal Bulletin vanadium price for 2Q19 was $39.4/kg, which was a 46.3% fall, compared with 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.
But underlying production costs (excluding administrative expenses, depreciation, ‘general’, royalties and selling) also declined. During 2Q19, these costs 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 the figure for 1H18.
Revenues for 2Q19 (net of all sales commissions) came to $30-million, which was a drop of 32.6%, compared with 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 was $16.9-million, a fall of 46.9%, compared with 1Q19, and a fall of 35.5% in relation to Q218. However, the ebitda for 1H19, at $48.6-million, was 14.6% higher than the $42.4-million figure for 1H18.
The company also reported it had successfully concluded an agreement on pay and benefits with the Association of Mineworkers and Construction Union (AMCU). “We are delighted to announce the successful completion of the wage negotiations with AMCU for the next three years, which eliminates the risks of strikes relating to wage negotiations and highlights the ongoing cooperative relationship with our workforce and AMCU,” highlighted Mojapelo. “We continue to work on finalising an Employee Share Ownership Participation structure, which will allow our workforce to share in the success of the Company.”
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 conclude by the end of Octobe. The group has also started the definitive feasibility study for its Mokopane mine project, while the first mineral resource statement for it Brits project was released during 2Q19. “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,” he said.