# Bushveld Minerals Limited Strong performance at Vametco - Link: https://www.directorstalkinterviews.com/bushveld-minerals-limited-strong-performance-vametco/412750133 - Published: 2018-04-27T07:31:30+01:00 - Author: Giles Arbor **Bushveld Minerals Limited** (LON:BMN), the AIM listed integrated vanadium producer with additional investments in coal, power and tin, has today provided an operational update in respect of its Vanadium platform, which consists of Bushveld Vametco, Mokopane and Brits. In line with standard market practice, the Company will only present operational information during quarterly updates, with financial information reported in the interim and full year results. **Key Highlights** · Vametco produced 731 mtV in the form of Nitrovan®, an increase of 35.5% relative to Q4 2017 and 12.9% relative to Q1 2017, supported by the completion of Phase one of the expansion project; · The Metal Bulletin vanadium price based on the FeV mid average price for the quarter was US$61.8/KgV, an increase of 58.1% relative to Q4 2017; · Phase two of the expansion project is progressing to increase production capacity to 3,750 mtV; · Vametco achieved an all-time record magnetite kiln feed during Q1 2018, supported by the completion of Phase one of the expansion project; · The Company has commenced an exploration programme at the Brits Project, which has shown positive drilling results; · Post the completion of the Vametco acquisition the Company is working on integrating its system and reporting standards across the group. > **Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:** “We are pleased > with the strong performance at Vametco over this period, which was underpinned > by the completion of the first phase of the expansion project. Phase two of the > expansion plan is well underway and on track, which, once complete, will enable > Vametco to achieve a production capacity of 3,750 mtV and further lower production > costs. Plans for commencing Phase three are progressing to schedule. The results > of the Vametco expansion project to position us to achieve a production capacity > of 5,000 mtV by 2019 are coming through positively, and our previously stated > 2018 guidance remains unchanged. > “We remain focussed on delivering on this important aspect of our strategy, which > will allow us to take advantage of current higher prices, along with supporting > our electrolyte and FeV production aspirations. The plans being implemented will > undoubtedly further enhance our competitive position in this structurally challenged > market whilst our integrated platform will allow us to develop downstream operations > and product diversification.” **Bushveld Vametco** **Production:** · Vametco produced 731 mtV in the form of Nitrovan® from magnetite concentrate during the first quarter of 2018. Vanadium production for the March 2018 quarter increased by approximately 35.5% relative to the December 2017 quarter. This was primarily due to the kiln maintenance undertaken at the end of 2017 to allow the increased kiln feed rate as part of the second phase of the expansion project. · Vanadium production increased by 12.9% relative to the March 2017 quarter underpinned by increased magnetite processing rates, as a result of the completion of the first phase of the expansion project. The capacity enhancement resulted in an all-time record magnetite kiln feed being achieved during the quarter. The average kiln feed magnetite prior to the commissioning of the first phase was 36,539t pm and the average kiln feed magnetite post the implementation of the first phase was 39,161t pm, a 7.2% monthly increase on kiln feed. · Vanadium production guidance for the 2018 calendar year remains unchanged at approximately 3,680 mtV. Following the completion of Phase two of the expansion project by the end of June 2018, Vametco’s production capacity will ramp up from the current 3,035 mtV to 3,750 mtV per annum. The capital expenditure programme is being funded from operational cashflow, as previously notified. Operational and financial highlights for Vametco (on a 100% basis)^(1):   | Description | Unit | Q1 CY18 | Q1 CY18 vs Q4 CY17 | Q1 CY18 vs Q1 CY17 | | Vanadium (Nitrovan^(®) plus FeV) produced | mtV^(3) | 731 | +35.5% | +12.9% | | Vanadium sold | mtV^(3) | 690 | +8.6% | +7.2% | | Average MB vanadium price^(2) | US$/KgV | 61.8 | +58.1% | +144.2% | | USD/ZAR exchange rate | US$:ZAR | 12.0 | -12.4% | -9.6% | | Production costs^(4) | ZAR/kgV | 226.7 | -8.0% | +11.7% |   1. Based on provisional, unaudited estimates. Bushveld’s net attributable interest of the above production and financials is approximately 59.1% and will be consolidated on a 100% basis in the financial accounts. 2. The vanadium price is based on the FeV mid average price for the period, published by Metal Bulletin. Vametco realised price is based on an average one month prior to sale. 3. mtV = metric tonnes of vanadium. 4. Excludes depreciation, royalties, selling, general, & administrative expenses. Multi-phased expansion project · In 2017, Vametco commenced a three-phased expansion project with the aim of increasing annualised production capacity to more than 5,000 mtV by 2019. · Phase one of the expansion plan was successfully completed on time and on budget in the September 2017 quarter, during which Vametco reached an annualised production capacity of 3,035 mtV. · Phase two of expansion plan to target annualised production capacity of 3,750 mtV continues on schedule. Commissioning of the new milling circuit is expected during June 2018 with improved concentrate volumes planned from the end of the first half of 2018. · Phase three of the expansion plan is planned to increase Vametco’s annualised production run rate to over 5,000 mtV by 2019. · Completion of the expansion project will enhance Vametco’s existing competitive position in a structurally challenged market. In addition, the presence of an integrated platform will allow the development of downstream operations whilst achieving product diversification.   | Project | Investment^(1) | Scope | Progress | | Multiphase expansion project – Phase 1  | US$0.5m | Increase Vametco annual production run rate to 3,035 mtV. | 100% completed in September 2017. | | Multiphase expansion project – Phase 2  | ~US$2.5m | Increase Vametco annual production run rate to 3,750 mtV by June 2018. | On target for completion by June 2018. | | Multiphase expansion project – Phase 3  | N/A | Increase Vametco annual production run rate to over 5,000 mtV by 2019. | Planning Stages. | 1.     Shown on a 100% basis, Bushveld Minerals net interest is 59.1%. **Other projects underway** · Tailings facility expansion: to provide capacity to continue depositing the calcines( which needs to be deposited on a H:H liner) as part of ongoing operations. · Kiln off-gas project: to comply with regulatory requirements and further increase kiln feed throughput. · Both projects are expected to be commissioned by the end of 2018. **Mokopane Project** The Mokopane Vanadium Project is a key part of Bushveld’s vanadium strategy. The project comprises one of the world’s largest primary vanadium resources as well as high in-situ grades of 1.4% V205 and in-concentrate 1.60-1.75% V2O5 grades for the MML orebody. An application for a New Order Mining Right was lodged in March 2015 and is being processed by South Africa’s Department of Minerals Resources. The Company is in ongoing discussions with the Department of Mineral Resources with a view to being granted a New Order Mining Right. Simultaneously, the Company has been progressing ongoing consultations with the local community and continues to evaluate ways to bring the asset into production in the most cost-efficient manner possible. The intention remains to develop this project alongside the Company’s broader vanadium portfolio. **Brits Project** The Company has begun an exploration programme at the Brits Project, comprising prospecting rights on several farms adjacent to Vametco, with the aim of establishing a maiden Mineral Resource Estimate. In February and March 2018, a soil geochemical sampling programme and ground magnetic survey were carried out over the Brits Project area, and interpretation of the results of this work has led to several drilling targets being delineated. Drilling on these targets commenced in March 2018, and thus far eight diamond drill holes have been completed, totalling 833.08 metres. The Lower Seam (the primary orebody mined at the adjacent Vametco Mine) has been intersected in several drill holes, and the Intermediate Seam and Upper Seam have also been intersected in some drill holes. | Drill hole | Total Depth | Targets Intersected | | BVL001 | 70.76 m | Lower Seam | | BVL002 | 79.35 m | Lower Seam | | BVL003 | 77.32 m | Lower Seam | | BVL004 | 40.35 m | Lower Seam | | BVL005 | 99.36 m | Lower Seam, Intermediate Seam | | BVL006 | 173.10 m | Lower Seam, Intermediate Seam | | BVL007 | 141.44 m | Lower Seam, Intermediate Seam | | BVL008 | 151.40 m | Upper Seam | | Total | 833.08 m | |   Drill cores are currently being logged and assayed. Assays will be carried out at the Vametco mine laboratory and confirmed by an independent external laboratory, with results published as they are received. The Company will commence infill drilling at the Brits Project and will begin estimation of the Mineral Resource once logging, sampling and assaying of all drill holes has been completed. Share on: