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Simple.
Fast.
Effective.
Building a new way of doing things
and shaping the future
Year-End December 2023
Annual Report &
Financial Results
Bushveld Minerals is a primary vanadium producer. It is one of the world’s three primary
vanadium producers, offering compelling exposure to vanadium through its upstream asset.
Vanadium is an essential element in many modern processes. It is playing a critical role in
the transition to a low-carbon economy to enable a more sustainable world. It reduces carbon
emissions generated during steel production and in advancing utility-scale battery storage solutions.
Bushveld’s mission is to operate as a ‘simple, fast and effective’ company, combining mining and
vanadium processing to produce products for the steel industry.
OUR PURPOSE
To mine, process and beneficiate vanadium
in a way that contributes to the sustainability
of the planet while creating tangible value for
our stakeholders and society.
OUR STRATEGY
To become a simple, fast and effective mining
company with a singular focus on the upstream.
In implementing this strategy Bushveld will
build a sustainable, cash-generating, low-cost
production platform. Our leadership prioritises
the proactive identification and mitigation of
all business and operating risks that may
impede our objectives.
This report is also available at
www.bushveldminerals.com/financial-reports
BUSINESS OVERVIEW
Table of contents
2BUSINESS OVERVIEW
34GOVERNANCE
54FINANCIAL STATEMENTS
Investment case
36 Board of Directors
56
Independent Auditor’s Report
Our business at a glance
37 Executive Management team
63 Consolidated Statement
4
5
6
8
Chairman’s statement
38 Corporate Governance Report
Chief Executive Officer’s review
42 Report of the Audit Committee
10 Performance and objectives
44 2023 Remuneration Report
11 Chief Financial Officer’s review
52 Directors’ Report
15 Operating assets and
operational review
53 Statement of Directors’
responsibilities
17 Principal risks
22 Sustainability
25 Task Force on Climate-related
Disclosures (TCFD) statement
30 Our people
102SUPPLEMENTARY INFORMATION
Not subject to audit
104 Mineral Resources and Reserves
109 Notice of Annual General Meeting
113 Company information
of Profit or Loss
64 Consolidated Statement
of Comprehensive Loss
65 Consolidated Statement
of Financial Position
66 Consolidated Statement
of Changes in Equity
67 Consolidated Statement
of Cash Flows
68 Notes to the Consolidated
Financial Statements
Throughout this publication, the Boards are referred to collectively as the Board. In this
Annual Report, the terms “Bushveld Minerals Group”, “Bushveld”, “Company”, “Group”,
“we”, “us”, “our” and “ourselves” are used to refer to Bushveld Minerals Limited. The terms
“Vametco mine and processing plant”, “Vametco mine” and “Vametco” are used to refer to
Bushveld Vametco Alloys (Proprietary) Limited. The terms “Vanchem plant” and “Vanchem”
are used to refer to “Bushveld Vanchem Proprietary Limited”. Cross-references refer to
sections of the Annual Report, unless stated otherwise.
1
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCE
BUSINESS OVERVIEW
Business
overview
CONTENTS
Investment case
Our business at a glance
Chairman’s statement
Chief Executive Officer’s review
4
5
6
8
10 Performance and objectives
11 Chief Financial Officer’s review
15 Operating assets and operational review
17 Principal risks
22 Sustainability
25 Task Force on Climate-related Disclosures
(TCFD) statement
30 Our people
2
Annual Report and Financial Results 2023
3
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSBUSINESS OVERVIEWGOVERNANCE INVESTMENT CASE
A simple, fast, effective company
underpinned by robust fundamentals
We offer investors exposure to a commodity that
has long-term demand prospects, as vanadium
is not only a key component in steel alloys but also
plays a critical role in the production of renewable
energy technologies, the growing use of which will
facilitate the transition to a low-carbon future.
Following a period of restructuring, which is still
underway, and the implementation of austerity
measures during the second half of 2023, Bushveld
is now set to become a lean, competitive company
focused on production and cost-effective delivery.
• We have overhauled Bushveld’s strategy to refocus on the core
function of mining and vanadium processing.
• We are simplifying the structure of the business by consolidating
our assets and streamlining our vanadium operations, positioning
Bushveld to generate positive returns throughout the commodity cycle.
• We are in the process of divesting the entire energy business,
including the Bushveld Electrolyte Company (“BELCO”), to refocus
on the core function of mining, thus reducing complexity and
simplifying our business model.
• We are committed to maximising the potential of the Company’s
operations with Vametco on the path to becoming consistent and
sustainable in operational status.
• Our cost saving measures implemented during the course of 2023
will ensure cost effectiveness across the business and facilitate a
faster return to profitability.
• Our vanadium products provide flexibility to maximise sales and
profit margins according to market demand.
Our strategy
In the context of the Company’s current resource
constraints and the depressed conditions of the
vanadium market, over the second half of 2023,
Bushveld’s senior management team opted to
revise the Group’s strategy away from the objective
of vertical integration: Bushveld was established as
a mining company and to its core remains as such.
The revised strategy aims to refocus the business towards being
an efficient mining company that delivers sustained value to all
stakeholders. The cornerstone of this strategy is the principle of
‘operational excellence’, which will facilitate a steady improvement
in the Company’s financial performance, enhance shareholder value,
protect our employees, our communities and the environment, and
ultimately ensure long-term success in a challenging industry.
In rolling out this strategy, the immediate focus of the Company
is ensuring operational stability at Vametco.
Our long-term strategy is centred on building a sustainable, cash-
generating, low-cost production platform, comprising of a refurbished
scalable production plant.
The delivery of our strategy is underpinned by:
• The vision and energy of a new, streamlined management team;
• Becoming a simple, fast and effective mining company;
• A clear purpose;
• Productive austerity measures; and
• Achievable targets.
In May 2024, the Group agreed to sell the remaining 50% stake in
Vanchem to Southern Point Resources (“SPR”). This is necessitating a
further review of the strategy which will be communicated in due course.
4
Annual Report and Financial Results 2023 Our business at a glance
3
2
1
-
-
A PRIMARY VANADIUM PRODUCER
1. Vametco (100% ownership)
– Mine and processing facility
– Life-of-mine of >30 years
(ore reserves)
2. Vanchem (100% ownership)1
– Processing facility
3. Mokopane project (64% ownership)1
– JORC-compliant 298 Mt resource,
including 28.5 Mt reserves with
grade of 1.75% V₂O₅ in-magnetite
– 30-year mining right executed
in January 2020
Our business model
Bushveld Minerals’ business model combines
mining and processing to produce products for
use in the steel industry.
In all our activities, we strive to be a responsible
and respectable social partner, ensuring sustainable
economic growth and development for the
communities around us while creating value
for our shareholders.
1
Commenced sale to Southern Point Resources.
This is how we create value for all our stakeholders:
Mining – We have access to some of the highest
grades of vanadium in the world and focus on efficient,
sustainable, safe and low-cost extraction.
Processing – Our processing facilities have undergone
continued refurbishment and optimisation initiatives to
achieve stable processing and refining.
Sales and marketing – We supply products to our
customers’ specifications and optimise our sales
to higher-value markets globally.
5
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
CHAIRMAN’S STATEMENT
Stabilising business foundations
for future growth
DEAR SHAREHOLDERS,
It would be remiss of me not to begin this letter with
an acknowledgment of the unprecedented state of
flux that has characterised Bushveld’s performance
during the period under review.
A key event of the year was the change in leadership of the Company
with the departure of Fortune Mojapelo at the end of June 2023. Having
co-founded Bushveld Minerals back in 2012, Fortune led Bushveld
Minerals’ evolution from explorer to producer. The Company wishes him
well in his future endeavours. Sadly, the Company also had to engage in
right-sizing measures to reduce costs and overheads. A number of staff
had to be let go in this process and we also wish them well going forward.
Over the last 15 months, the Company has experienced a significant
change in Executive Management and a restructuring of its head office,
evolved its strategy to reflect financial realities, navigated funding
hurdles, implemented necessary austerity measures, and intensified
efforts to improve the operational performance of its assets. All of this
at a time when vanadium prices have been subdued and unsupportive,
with the geopolitical arena becoming increasingly unstable and complex.
Since stepping into the role of CEO in July 2023, Craig Coltman has
done a highly commendable job under challenging circumstances.
Under his leadership, much progress has been made in overhauling
and simplifying the Company’s operations and strategy to refocus on
the fundamentals of the business, being the mining and beneficiation
of vanadium. This progress will be vital to the future performance of
the Company. Whilst not yet reflected in the financial outcomes (see
the Directors’ Report on page 52), the overhaul implemented by the
Management team will become clearer when there is a rebound in
the price of our commodity.
This has been a significant change for Bushveld. The strategic switch
in direction to being a pure vanadium play has not only been undertaken
with the objective of simplifying the business model but in recognition
that the Company did not have sufficient financial strength to build a
vertically integrated mining and energy entity. While vanadium may
well have a future as an energy mineral, Bushveld was unable to attract
or generate the capital to be a pioneer in executing this long-term
opportunity. Following the sale of Vanchem, Bushveld will continue
to move towards operating in an agile and lean manner by focusing
on getting the Vametco plant and its long-life mine into an efficient,
sustainable, cash-producing asset. Consequently, the Company is
engaged in the disposal of its investments in the sectors unrelated
to the production of vanadium.
Under the new leadership, realistic production targets have been
set involving the strengthening of core operations. Management has
also endeavoured to stabilise and improve the Company’s financial
resilience, notably through the restructuring of the Orion convertible
loan note, the commitment of US$18.4 million additional equity, of
which US$14.9 million has been received, as well as the pending sale
of the Vanchem facility.
The Board recognises Craig’s candid engagement with his colleagues
and shareholders in providing a realistic and frank assessment of
the business and what actions have been and still are required to be
taken to facilitate the restoration of long-term value. While there is still
a way to go on some of the restructuring and operational initiatives
announced, the Group looks forward to achieving a potentially more
deliverable proposition and a refocused business model geared towards
the efficient production and sale of vanadium from its South African
production asset, Vametco.
MICHAEL KIRKWOOD
Independent
Non-Executive Chairman
66
Annual Report and Financial Results 2023 The Bushveld Board stands resolutely in support of management’s
turnaround strategy and focus for 2024. This is to build on the progress
made in the second half of 2023 to become a simple, fast and effective
mining company. Continued improvement in operational performance,
the disposal of the energy assets, and the further reduction of debt
will facilitate a strengthening of our investment proposition during the
course of the current financial year. A recovery in the price of vanadium
will, of course, also be vital and most welcome.
In closing I must recognise the commitment, support, and dedication
of my Board colleagues who have been unstintingly generous with their
time and have provided much wise counsel during this pivotal period in
the Company’s development. Collectively, we also recognise the huge
effort of the Executive Management team under Craig’s leadership for
their steady hand and commitment to restoring Bushveld Minerals’
intrinsic value for its shareholders.
Michael J. Kirkwood
Chairman
28 June 2024
We thank shareholders for supporting the conditional sale of Vanchem,
an action that allows us to rectify the Group’s overdue creditor
balances as well as providing adequate working capital to fund ongoing
operations at Vametco.
During the year, Southern Point Resources (“SPR”) became a new
major shareholder and supporter. The multi-pronged agreement with
SPR, which includes a working capital facility, the purchase of Vanchem
and our 64% interest Mokopane, an equity subscription and a new sales
and marketing arrangement has all helped infuse much-needed capital
into the turnaround strategy that the Executive Management team
have devised.
I would also like to particularly thank those shareholders who participated
in the fundraising exercise we initiated at the end of 2023, which helped
raise the funds to strengthen our working capital and invest in some of
the maintenance projects required to support our assets. The Board and
Executive Management team hope that all shareholders will increasingly
see the potential of the business and provide the necessary support to
re-rate the shares of the Company to a level that appropriately reflects
its underlying value.
We would like to welcome Robbie Taylor who recently joined as Interim
Chief Financial Officer replacing Tanya Chikanza. He brings with him
over 27 years’ experience as a Finance Executive in various sectors and
has extensive experience working with listed entities and multinationals.
Robbie and the Finance team have made significant strides in
addressing capital allocation, creditor management, cost control and
overall financial discipline.
The coming months will see a number of changes to your Board:
• David Noko is not standing for re-election at the AGM in order to
permit him to focus on his many other commitments. He has served
the Company assiduously, particularly in his role as Chair of the
ESG Committee. He departs with our thanks and best wishes.
• Further, it is my intention to stand down from the Board and as
Chairman once a replacement has been appointed. I have served for
over six years and now is the time for a new Chair to lead the Board
and the Company forward. The Company will shortly initiate a search
process to identify a suitable candidate.
• Subject to completion of regulatory due diligence, replacing David
Noko as a Non-Executive Director, Mathews Senosi has been invited
to join the Board. We will welcome his involvement and look forward
to benefitting from his significant sectoral experience.
7
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CHIEF EXECUTIVE OFFICER’S REVIEW
Refocusing our business objectives
DEAR STAKEHOLDERS,
I am pleased to be writing to you in my first letter
as CEO of Bushveld Minerals.
This review focuses on the initiatives pursued, including the key
transactions announced and hard operational and restructuring decisions
taken in my first six months with the Company, and into the current
financial year.
I joined the Company at a critical juncture in its history, heavily beset as
it was by a confluence of financial, operational and broader contextual
challenges. While I have been at the helm for a relatively short time, just
11 months at the time of writing, I can report that the team has worked
incredibly hard, under difficult circumstances, to turn this ship around.
In this, our priority has been the overhaul of Bushveld’s strategy.
We have moved away from the objective of vertical integration to
refocus on the original fundamentals of the business as an efficient
miner of vanadium that can deliver a sustained value to all stakeholders.
Such has been the result of our hard work that, today, we present you
with a pure-play, focused vanadium producer, capable of producing
sustainable free cash flow within the right market conditions.
Of course, prior to my joining mid-year, on 1 July 2023, work refocusing
our business objectives had already started on some of the issues facing
the business. At an operational level, the load curtailment solution
between Vanchem and the Emalahleni Municipality was agreed early
in 2023 providing a far more stable, predictable power feed to the kiln.
On the financial front, the initial Investment Committee approved the
term sheet for the Orion loan restructuring which was announced in May
2023 with the deal finalised in February 2024; and while the proposed
listing never crystallised for various reasons, there was an attempt to
get the energy assets unbundled into their own listed vehicle.
CRAIG COLTMAN
Chief Executive Officer
88
STABILISING THE BUSINESS
Within days of arriving at Bushveld, the uphill task we had ahead of us
was quite clear. Beyond the long-term debt position with Orion that had
become current, we also owed creditors large sums of money, the majority
of the balance being long outstanding, and it was apparent that we had
to reduce these creditor balances in order to improve the steady supply
of raw materials that would in turn facilitate consistent output from both
our production facilities.
To do this, we had to bolster our cash balance and improve our working
capital situation quickly, to ensure our credit period days were reduced
and suppliers were more confident they would be paid timeously on
supply of goods.
A big contributor to achieving the funding boost, was the comprehensive
proposed investment by Southern Point Resources (“SPR”) announced
in September 2023. There is no doubt that the immediate US$8.0 million
(ZAR150.0 million) working capital loan under the SPR agreement
provided an immediate boost to our bank balance and breathing
room as we proceeded with the other transactions within the overall
US$69.5-77.5 million funding package. In December 2023, we also
successfully concluded the definitive agreements for the sale of 50%
of Vanchem and our 64% interest in Mokopane for a total price of
US$25 million. This transaction was altered in May 2024 to include
100% of our share in Vanchem. During the period, we also concluded
a sales and marketing agreement with SPR, part of which will see
them provide Bushveld with a provisional working capital facility of
US$25-30 million, to replace our existing working capital facilities.
We also pushed the button on a much-needed equity raising, which,
including the previously agreed US$12.5 million injection from SPR,
saw us raise a commitment of a total of US$18.4 million in fresh capital
for the business of which US$14.9 million has been received. While
there have been some post-year-end delays on the flow of some of these
funds, we have made great strides with SPR in executing the various
parts of our broad agreement and are continually engaging on the
remaining transactions.
REFOCUSING OUR BUSINESS OBJECTIVE
From an operational perspective we identified that, in order to improve
Vanchem’s performance, it was vital we implement various initiatives
during the month of July 2023 to get that facility into a sustainable
positive cash flow position in the short term and achieve stable
production levels of approximately 180 mtV per month. Initiatives
pursued included:
• Changing the re-agent mix from 100% sodium sulphate to a mix of
sodium carbonate and sodium sulphate, which reduces the silica
build up at the kiln and hence increases the kiln availability.
• Deploy a team from Vametco to Vanchem to improve knowledge
sharing.
• 24/7 shift managers for supervision to ensure immediate
decision-making.
Annual Report and Financial Results 2023 After familiarising myself with the business as a whole, I realised
that there were several legacy and non-core assets that were using
management time and Company funds to maintain and develop, while
not contributing any near- to medium-term returns. Once identified,
we initiated the process of disposing of those assets to focus on our
main business, namely the production of vanadium.
Toughest of all the decisions was the one we had to make towards the
end of the financial year where, having right-sized the business, and
taken into account our financial constraints, we had no choice but to
make redundant a number of our Group Head Office employees. The
office restructuring will result in a cost saving of US$1.5 million per year.
While it is never easy letting people go, we knew these measures were
essential for navigating the current market conditions and ensuring the
Company’s continued competitiveness throughout the commodity cycle.
FINANCIALS
The 2023 financial results were affected by lower vanadium prices and
higher operating costs which resulted in an underlying EBITDA¹ loss
of US$7.5 million. We used cash generated from operating activities
of US$6.2 million and ended the year with a cash and cash equivalent
balance of US$1.3 million.
At the beginning of 2024, the Company completed the refinancing
of the unsecured convertible loan notes issued to Orion as follows:
• US$4.7 million of the convertible debt obligations capitalised into
a subscription for 124,747,016 new ordinary shares.
• A new convertible loan note of US$14.1 million maturing on
30 June 2028.
OPERATIONS
It was clear early on in my tenure that while Vametco was largely reliable
and in suitable operating condition (save for the Barren Dam constraints),
it was Vanchem which required further improvements and consistency
in order to stand on its own two feet.
After spending some time at the assets, I took the difficult decision to
revise guidance to a realistic and achievable target of between 3,700 mtV
and 3,900 mtV (previously between 4,200 mtV and 4,500 mtV). The
good news is that the turnaround plan implemented and described above
helped us achieve the targeted production rates, with Vanchem achieving
its highest production level since the asset was acquired by Bushveld.
At Vanchem, we saw a significant improvement in our safety performance
with a total recordable injury frequency rate of 2.31 (2022: 10.32).
The improvement is a result of the implementation of a safety diagnostic
assessment action plan, with special focus on the leading indicators,
namely, visible felt leadership, planned task observations, inspections
and addressing all the audit results.
OUTLOOK
Our immediate focus for the remainder of 2024 is to build on the
aforementioned achievements. We aim to ensure that Vametco realises
operational stability and achieves a sustainable monthly production of
circa 240 mtV by Q4 2024. In addition to commencing with the project
to buttress the slimes dam, increasing the capacity of the Barren Dam
at Vametco remains an important debottlenecking project that needs
to be resolved.
• A term loan of US$28.3 million maturing on 30 June 2026.
• Supplemental royalty at not more than 0.264% of Bushveld’s gross
We will continue to reduce debt and implement cost saving measures
in line with our asset rationalisation.
revenues and reducing by 80% at the term loan maturity.
The announcement of the 100% sale of Vanchem made post the
financial year end, has provided working capital to fund ongoing
operations and allows the Group to reduce its overdue creditor balance.
ASSET RATIONALISATION
In our efforts to reduce costs and simplify our business, the Company
has also initiated processes on disposing of several of its assets.
Within the scope of the SPR transaction, the Company has conditionally
sold Vanchem to SPR and our 64% interest in the Mokopane
development project for US$40-45 million. Definitive agreements have
been signed for both of these transactions and we await final conditions
around regulatory approvals to be met.
The low vanadium price has continued into 2024 with the commodity
trading around US$26/kgV. As a Group, we will continue to prioritise
sales into higher value markets, such as the aerospace application,
speciality alloy and chemicals, and higher price markets, such as nitro
vanadium in North America.
I must thank Orion, SPR and all other shareholders for their support
through this difficult time. As mentioned at the start of this letter,
we have taken big strides in focusing this business on the efficient
production of vanadium for global markets.
I look forward to updating you on our progress to becoming a simple, fast
and effective company during the course of the current financial year.
Advisors have also been hired to manage the sale process of CellCube
and the Bushveld Electrolyte production plant.
Craig Coltman
28 June 2024
We also reassessed the merits of pursuing the mining right application
associated with the Brits Project, neighbouring Vametco, and
concluded that it should be discontinued. Discussions over the disposal
of Lemur, a thermal coal asset in Madagascar, are also underway.
1 Underlying EBITDA is Adjusted EBITDA excluding impairment losses.
9
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW PERFORMANCE AND OBJECTIVES
2023 Performance and future objectives
2023 achievements
2024 objectives
Near to medium-term objectives
HEALTH
AND SAFETY
– Reported zero fatalities.
– There were two lost time injuries, an improvement
from nine lost time injuries in 2022.
FINANCIAL
– US$7.5 million underlying EBITDA loss,
US$66.1 million adjusted EBITDA loss.
– Impairment charges of US$58.6 million, mostly
due to impairment loss of US$49.6 million and
US$8.2 million recognised for Mokopane Project
and Vanchem, respectively.
– US$1.3 million cash and cash equivalents as at
31 December 2023.
– Group cost per unit sold (including sustaining
capital) US$51.0/kgV.
– Completed the refinancing of the Orion convertible
loan note.
– As part of the Group’s cost savings initiative the
Company has implemented a restructuring at Head
Office which will result in cost saving of the amount
US$1.5 million per annum.
– Realised annual production of 3,714 mtV.
– Vanchem achieved its highest production volume
since acquisition, through the implementation of
a turnaround project.
– Production cash cost of US$26.6/kgV.
OPERATIONAL
– Maintain a safe environment for all employees and contractors
through deliberate housekeeping and asset integrity programmes.
– Ensure that all hazards are fully understood and risks are assessed,
through reviewing and updating all safe operating and maintenance
procedures.
– Strengthen the Company’s
– Achieve a capital structure
balance sheet.
– Increase business profitability
and free cash flow generation.
– Implement further cost saving
initiatives across the Group.
that will enhance shareholder
value.
– Realise additional cost
savings through a production
increase and other cost
management initiatives.
– Attain operational stability and
maintain consistent performance.
– Ensure that Vametco realises
operational stability and achieves
a sustainable monthly production
of circa 240 mtV by Q4 2024.
STRATEGIC
– Announced the sale process of CellCube.
– Acquired the 26% minority interest in Vametco,
– Complete the Vanchem and
Mokopane sale.
taking the total shareholding to 100%.
– Sell CellCube, BELCO and Lemur.
– US$69.5-77.5 million investment by Southern Point
Resources (“SPR”).
– Raised a total of US$18.4 million via an equity
placing of which US$14.9 million has been
received.
10
Annual Report and Financial Results 2023 CHIEF FINANCIAL OFFICER’S REVIEW
Increased volumes and revised capital structure
1. OVERVIEW
Revenue
Cost of sales
Other operating income and costs1
Administrative costs
Adjusted EBITDA2
Impairment charges
Underlying EBITDA3
Average foreign exchange rate
Group production
Group sales
All-in sustaining costs (“AISC”)
Average realised price
The 2023 financial results were affected by lower vanadium prices
and higher operating costs to stabilise the assets. The operational
initiatives to prioritise operational stability paid off with Vanchem
achieving its highest yearly production since the asset was acquired
by Bushveld. Our turnaround efforts, which resulted in us achieving
this record production and stabilising the operation, allowed us to
achieve meaningful value for this asset when an agreement was
reached to sell 100% of Vanchem post financial year end.
In 2023, we recorded an underlying EBITDA loss of US$7.5 million
and adjusted EBITDA loss of US$66.1 million. The operating loss also
included impairment losses of US$58.6 million (2022: US$24.0 million).
US$49.6 million of the impairment losses pertain to Mokopane and
US$8.2 million to Vanchem.
The refinancing of the Orion Mine Finance (“Orion”) US$35.0 million
convertible loan notes and capitalised interest into a revised capital
structure was completed at the beginning of 2024. The Group also
conducted, during the end of 2023, an equity raise and entered into
agreements with Southern Point Resources (“SPR”) for a cumulative
proposed investment of US$69.5-77.5 million.
Unit
US$m
US$m
US$m
US$m
US$m
US$m
US$m
US$/ZAR
mtV
mtV
US$/kgV
US$/kgV
FY 2023
137.5
(122.1)
(77.2)
(20.8)
(66.1)
(58.6)
(7.5)
18.46
3,714
4,051
51.0
33.9
% change
-7%
13%
93%
2%
3.884%
145%
-133%
13%
-3%
13%
17%
-18%
FY 2022
148.4
(108.3)
(40.0)
(20.3)
(1.7)
(24.0)
22.3
16.35
3,842
3,584
43.7
41.4
2. INCOME STATEMENT
ANALYSIS OF RESULTS
The income statement summary below is adjusted from the “statutory”
primary statement presentation:
Figures in thousands of US$
Revenue
Cost of sales excluding
depreciation
Year ended
31-Dec-23
% change
Year ended
31-Dec-22
137,471
-7% 148,448
(106,097)
18%
(90,268)
Other operating income and costs
excluding impairment losses
(18,567)
16%
(15,985)
Other operating income
2,059
-25%
2,733
Selling and distribution costs
Other mine operating costs
Idle plant costs
Administration costs
excluding depreciation
Underlying EBITDA
Impairment losses
Adjusted EBITDA
Depreciation
Operating loss
Other losses
Share of loss from joint venture
Fair value gain on
derivative liability
Net financing expenses
Loss before tax
Income tax
(8,825)
(2,838)
(8,963)
(20,266)
(7,459)
(58,637)
(66,096)
(16,491)
(82,587)
(3,378)
(4,242)
32
(14,864)
(105,039)
(1,730)
-5%
4%
33%
(9,270)
(2,723)
(6,725)
2%
(19,889)
-133%
145%
3,884%
-11%
310%
313%
-17%
-99%
9%
186%
-229%
22,306
(23,965)
(1,659)
(18,475)
(20,134)
(818)
(5,112)
2,934
(13,654)
(36,784)
1,345
Net loss for the year
(106,769)
201%
(35,439)
1 Other operating income and costs include other operating income, impairment losses, selling and distribution costs, other mine operating costs and idle plant costs.
2 Adjusted EBITDA is EBITDA excluding the Group’s share of losses from joint ventures, fair value gain on derivative liability and other losses.
3 Underlying EBITDA is Adjusted EBITDA excluding impairment losses.
11
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
Revenue
Group sales (mtV)
Average realised price (US$/kgV)
Revenue (US$’000)
Year ended
31-Dec-23
Year ended
31-Dec-22
4,051
33.9
137.5
3,584
41.4
148.4
Revenue of US$137.5 million for the Group was seven percent lower
than in the previous year, due to an 18% decrease in the average
realised price to US$33.9/kgV, partially offset by a 13% increase
in Group sales to 4,051 mtV.
The geographic split of Group sales in 2023 was 44% to the USA,
27% to Europe, nine percent to Asia, seven percent to South Africa,
and 13% to the rest of the world. During the year we continued to
prioritise sales into the higher value markets (aerospace application,
speciality alloy and chemicals) and higher price markets (Nitro
Vanadium in North America).
COST ANALYSIS
Figures in thousands of US$
Year ended
31-Dec-23
Year ended
31-Dec-22
Cost of sales excluding depreciation
Other operating income and costs
Administration costs excluding depreciation
(106,097)
(77,204)
(20,266)
(90,268)
(39,950)
(19,889)
Total income statement operating cost
excluding depreciation
Total units sold (mtV)
Cost per income statement per unit sold
(excluding depreciation) (US$/kgV)
Sustaining capital
Total cost including sustaining capital
Cost per unit sold including sustaining capital
(203,567)
4,051
(150,107)
3,584
50.3
(3,202)
41.9
(6,589)
(206,769)
(156,696)
(US$/kgV)
51.0
43.7
COST OF SALES
The cost of sales, excluding depreciation, for the year was
US$106.1 million, 18% higher than the prior year primarily
due to higher costs at both Vametco and Vanchem. The cost
increases included:
• Reduction in finished goods as the Group sold 340 mtV more
•
•
•
than what was produced in the year;
Increase in raw material prices from suppliers;
Increase in energy and staff costs due to cost escalation;
Increase in inventory write-downs at Vanchem which included
a net realisable value write-down of US$1.8 million as well as a
US$1.2 million write-down of work-in-progress and raw materials;
and
• These costs increases were partially offset by a decrease in the
ZAR:USD exchange rate.
OTHER OPERATING INCOME AND COSTS
Other operating income and costs increased to US$77.2 million
primarily due to:
• A US$34.7 million increase in impairment losses to US$58.6
million. US$49.6 million of the impairment losses pertain to the
Mokopane Project in order to reduce the carrying amount of the
Project to the sales price agreed with SPR of US$3.7 million. US$8.2
million impairment loss was recognised for Vanchem to align the
carrying amount with the agreed sales price for the initial 50% sale
of Vanchem. After year end, this transaction was altered to sell a
100% of our share in Vanchem. Following the closing of the sale, we
will discontinue recognition of the assets and liabilities of Vanchem
and any difference between the net assets and the consideration
received will be recorded as a gain or loss on disposal;
• A US$2.2 million increase in idle plant costs to US$9.0 million due
to additional downtime at Vanchem and Vametco, partially offset
by a decrease in the ZAR:USD exchange rate; and
• Selling and distribution costs decreased by US$0.4 million primarily
due to lower commissions paid driven by lower average realised
prices partially offset by higher distribution costs.
COST PER UNIT SOLD
The Group cost per unit sold for the year (including sustaining capital
expenditure) was US$51.0/kgV. This represents a 17% increase relative
to the prior year primarily as a result of the cost factors noted above,
offset by higher sales volumes and a weaker ZAR:USD exchange rate.
ADMINISTRATION COSTS
Administration costs, excluding depreciation charges for the year were
US$20.3 million. Below is a breakdown of the key items included in
administration costs:
Figures in thousands of US$
Staff costs
Professional fees
Share-based payments
Other (including IT and security expenses)
Year ended
31-Dec-23
Year ended
31-Dec-22
9,048
7,051
(254)
4,421
9,327
6,007
315
4,240
20,266
19,889
Professional fees increased by 17% to US$7.1 million primarily driven
by higher legal fees and consulting fees incurred as a result of the
agreements entered into by SPR and Orion.
ADJUSTED AND UNDERLYING EBITDA
Adjusted EBITDA is a factor of volumes, prices and cost of production.
This is a measure of the underlying profitability of the Group, which is
widely used in the mining sector. Underlying EBITDA removes the effect
of impairment charges.
Figures in thousands of US$
Revenue
Cost of sales
Other operating income and costs
Administration costs
Add: Depreciation
Adjusted EBITDA
Add: Impairment losses
Underlying EBITDA
Year ended
31-Dec-23
Year ended
31-Dec-22
137,471
(122,068)
(77,204)
(20,786)
16,491
148,448
(108,304)
(39,950)
(20,328)
18,475
(66,096)
58,637
(1,659)
23,965
(7,459)
22,306
The Group delivered an adjusted EBITDA loss of US$66.1 million,
a US$64.4 million reduction compared to 2022 primarily driven by
impairment losses, lower realised prices and higher operating costs.
The Group generated an underlying EBITDA loss of US$7.5 million,
US$29.8 million less than 2022.
12
Annual Report and Financial Results 2023 NET FINANCING EXPENSES
Net financing expenses were US$14.9 million, US$1.2 million higher
than in the previous year. The increase was primarily due to interest
on the Orion production facility agreement (“Orion PFA”) and Orion
convertible loan notes. Below is a breakdown of net financing expenses:
Figures in thousands of US$
Finance income
Interest on borrowings
Unwinding of discount rate
Interest on lease liabilities
Other finance costs
Year ended
31-Dec-23
Year ended
31-Dec-22
(523)
12,151
1,873
724
639
(494)
11,189
1,726
974
259
14,864
13,654
Interest on borrowings mainly reflected the finance costs on the
Orion convertible loan notes of US$7.1 million (2022: US$6.4 million),
interest on the Orion PFA of US$4.4 million (2022: US$4.4 million), and
interest on interim working capital facility from SPR of US$0.4 million
(2022: US$ nil).
OTHER NON-CASH COSTS
The share of loss from investments in joint ventures of US$4.2 million
(2022: US$5.1 million) is the Group’s share of the loss from its
investment in VRFB Holdings Limited.
Other losses of US$3.4 million include a write-down of the Mustang
Energy Plc (“Mustang”) convertible loan notes of US$1.7 million
following the exercise of the backstop agreement, a write-down of
US$0.4 million on the conversion of the Mustang working capital loan
as well as US$1.3 million of additional funding provided to CellCube.
3. BALANCE SHEET
ASSETS
Intangible assets decreased compared to the previous year as the
Mokopane intangible asset was impaired by US$49.6 million to reflect
a recoverable amount of US$3.7 million. The Mokopane intangible
asset was reclassified to asset held for sale as the sale was considered
highly probable at year end.
Property, plant and equipment decreased by US$27.7 million due to
depreciation of US$16.5 million, impairment losses of US$9.0 million
and weaker ZAR:USD exchange rate, partially offset by capital
expenditure of US$5.7 million.
Inventories decreased by US$12.7 million compared to the previous
year primarily due to a decrease in finished goods as the Group sold
more than what was produced, a decrease in the ZAR:USD exchange
rate and an increase in the write-offs recorded partially offset by an
increase in the weighted average production cost.
Trade and other receivables increased by US$15.5 million compared
to the prior year primarily due to the recognition of subscription
receivables of US$13.9 million which was received subsequent
to year end.
The decrease in other financial assets is due to the write-down of
the Mustang convertible loan notes following the exercise of the
backstop agreement.
The decrease in cash and cash equivalents to US$1.3 million was
primarily due to cash used from operations (US$6.2 million), capital
expenditures incurred (US$5.7 million), repayment of finance costs
and borrowings (US$5.5 million), partially offset by net proceeds
received from the interim working capital facility (US$7.5 million)
and net proceeds received from the equity raise (US$0.8 million).
EQUITY
The increase in share capital and share premium was due to the
shares issued to the Mustang convertible loan note holders following
the exercise of the backstop agreement, the shares issued in order to
acquire the minority interest in Bushveld Vametco Holdings and the
shares issued in the equity raise completed at year end.
LIABILITIES
Total borrowings (excluding lease liabilities) of US$98.58 million
increased by US$15.5 million compared to the prior year due to
the capitalisation of finance costs to borrowings of US$12.7 million
and additional funding provided of US$9.0 million, partially offset by
the repayment of Orion PFA of US$3.9 million and repayment of the
Primorus convertible loan note of US$1.2 million.
The net debt reconciliation below outlines the Group’s total debt and
cash position:
Figures in thousands of US$
Orion Production Financing
Arrangement
Orion Convertible Loan Note
Industrial Development
Corporation Loans
SPR interim
working capital facility
Other
Lease liabilities
Year ended
31-Dec-23
Year ended
31-Dec-22
Variance
(35,635)
(46,766)
(35,146)
(39,742)
(489)
(7,024)
(6,238)
(5,480)
(758)
(7,812)
(2,124)
(8,428)
–
(2,762)
(7,283)
(7,812)
638
(1,145)
Total debt
Cash and cash equivalents
(107,003)
1,281
(90,413)
10,874
(16,590)
(9,593)
Net debt
(105,722)
(79,539)
(26,183)
Net debt increased by US$26.2 million compared to the previous year
due to capitalised interest of US$7.1 million on the Orion convertible
loan notes, the SPR interim working capital of US$7.8 million and an
increase in lease liabilities of US$1.1 million and the decrease in the
cash and cash equivalents balance of US$9.6 million.
We completed the refinancing of the unsecured Orion convertible loan
notes at the beginning of 2024 as follows:
• US$4.7 million of the convertible debt obligation capitalised into
a subscription for 124,747,016 new ordinary shares;
• A new convertible loan note of US$14.1 million maturity on
30 June 2028;
• A term loan of US$28.3 million maturing on 30 June 2026; and
• Supplemental royalty not more than 0.264% of Bushveld’s gross
revenues reducing by 80% at the term loan maturity.
13
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
4. CASH FLOW STATEMENT
The table below summarises the main components of cash flow during
the year:
Figures in thousands of US$
Operating loss
Impairment losses
Depreciation
Other non-cash items
Changes in working capital
and provisions
Taxes paid
Cash inflow/(outflow) from operations
Sustaining capital expenditures
Free cash flow
Cash used in other investing activities
Cash generated from/(used in)
financing activities
Cash outflow
Opening cash and cash equivalents
Foreign exchange movement
Closing cash and cash equivalents
Year ended
31-Dec-23
Year ended
31-Dec-22
(82,587)
58,637
16,491
(3,213)
7,151
(2,705)
(6,226)
(3,202)
(9,428)
(2,478)
2,941
(8,965)
10,874
(628)
1,281
(20 134)
23,965
18,475
(6,629)
6,154
(648)
21,183
(6,589)
14,594
(13,000)
(5,346)
(3,752)
15,433
(807)
10,874
OPERATING ACTIVITIES
The Group used cash from operating activities of US$6.2 million,
compared to cash generated from operations of US$21.2 million
in the prior year. The change is primarily driven by the decrease in
adjusted EBITDA.
INVESTING ACTIVITIES
Cash used in investing activities (including sustaining capital
expenditure) of US$6.3 million was primarily driven by capital
expenditure on property, plant and equipment of US$5.7 million.
CAPITAL EXPENDITURE
Figures in thousands of US$
Vametco
– Growth
– Sustaining
Vanchem
– Growth
– Sustaining
Bushveld Energy
– Growth
Total capital expenditures
Year ended
31-Dec-23
Year ended
31-Dec-22
2.4
–
2.4
0.9
–
0.9
2.4
2.4
5.7
6.5
–
6.5
4.5
4.4
0.1
7.1
7.1
18.2
FINANCING ACTIVITIES
Cash generated from financing activities of US$2.9 million comprised of
the US$9.0 million proceeds received from borrowings mainly from the
interim working capital facility and the net proceeds of US$0.8 million
received from the equity raise, partially offset by the repayment of Orion
PFA of US$3.9 million, repayment of Primorus convertible loan note of
US$1.2 million, the repayment of lease liabilities of US$0.7 million and
the amount paid in cash to acquire the minority interest in Bushveld
Vametco Holdings of US$0.6 million.
5. FINANCIAL RISK
The primary financial risks faced by the Group relate to the availability
of funds to meet business needs due to the historically low vanadium
price (liquidity risk), the risk of default by counterparties to financial
transactions (credit risk), fluctuations in interest and foreign exchange
rates, and commodity prices (market risk). These factors are more fully
outlined in the notes to the consolidated financial statements. They
are important aspects to consider when addressing the Group’s going
concern status. We proactively manage the risks within our control.
There are, however, factors outside the control of management. These
are volatility in the ZAR:USD exchange rate, as well as the vanadium
price, which have a significant impact on the cash flows of the business.
We have a hedging policy and assess the potential to implement a
strategy to address the fluctuations in the ZAR:USD exchange rate
when we attain steady state production at our operations.
6. GOING CONCERN AND OUTLOOK
We closely monitor and manage liquidity risk by ensuring that the Group
has sufficient funds for all ongoing operations. As part of the annual
budgeting and long-term planning process, the Directors reviewed
the approved Group budget and cashflow forecast through to 30 June
2025. The current cashflow forecast has been amended in line with
any material changes identified during the year. Equally, where funding
requirements are identified from the cashflow forecast, appropriate
measures are taken to ensure these requirements can be satisfied.
We have performed an assessment of whether the Group would be
able to continue as a going concern for at least twelve months from
the date of the annual consolidated financial statement. We took into
account the financial position, expected future performance of the
operations, the debt facilities and debt service requirements, the
working capital requirements, capital expenditure commitments and
forecasts, expected proceeds from the sale of Vanchem and Mokopane
and outstanding equity proceeds. Additionally we factored in the
favourable relationship with Orion, demonstrated by the restructuring
of agreements to accommodate market conditions and constructive
engagement in relevant matters.
The Group’s ability to continue as a going concern is dependent on its
ability to complete the sale of Vanchem and Mokopane and the timing
of those sales proceeds, complete the refinance of the Orion senior term
loan and the timing of receiving the additional funding, the continuing
support of Orion, and achieving the planned production levels at the
estimated average sales prices. These conditions indicate the existence
of material uncertainties that may cast significant doubt on the Group’s
ability to continue as a going concern.
The consolidated financial statements for the year ended 31 December
2023 have been prepared on a going concern basis as, in the opinion
of the Directors, the Group will be in a position to continue to meet its
operating and capital costs requirements and pay its debts as and
when they fall due for at least twelve months from the date of this report.
The going concern note included in the accounting policies provides
further information.
Robbie Taylor
Interim Chief Financial Officer
28 June 2024
14
Annual Report and Financial Results 2023 OPERATING ASSETS AND OPERATIONAL REVIEW
Operating assets and operational review
PROCESSING
Vametco’s processing plant receives ore from the co-located Vametco
mine. The plant utilises the standard salt-roast and leach process to
produce a steel-alloying vanadium carbon nitride product called nitro
vanadium, a key ingredient in optimising the strengthening mechanisms
in high-strength, low-alloy steel.
Vanchem’s ore supply is a blend between the Vametco Upper Seam
project and third-party ore, and also utilises the salt-roast beneficiation
process.
2023 VAMETCO AND VANCHEM OPERATIONAL PERFORMANCE
Table 1: Operational highlights for Vametco and Vanchem
(on a 100% basis)
Group production
Group weighted average
production cash cost1
Vametco weighted average
production cash cost1 (C1)
Vanchem weighted average
production cash cost1 (C1)
Unit
mtV
2023
2022
2022 vs
2023
3,714
3,842
-3.3%
US$/kgV
26.6
27.7
-3.9%
US$/kgV
25.5
23.7
7.6%
US$/kgV
27.9
37.2
-25.0%
1
Includes direct costs of production. Excludes depreciation, royalties, movements in
finished goods inventories and selling, general and administrative expenses.
Group production for 2023 of 3,714 mtV was in line with the revised
guidance of 3,700-3,900 mtV. Vametco’s production was impacted
by constraints at the Barren Dam and the Sulphate Recovery Plant
(“SRP”), reliability challenges at the leach plant, and cash flow shortfall.
Different measures have been implemented during the second half of
2023 to reduce these constraints and challenges.
In 2023, Vanchem achieved the highest yearly production volume
since it was acquired, supported by a turnaround project implemented
in Q3 2023. The turnaround project included:
• Changing the reagent mix from 100% sodium sulphate to a mix of
sodium carbonate and sodium sulphate, which reduces the silica
build up at the kiln and hence increases the kiln availability.
• Deploying a team from Vametco to Vanchem to improve
•
knowledge sharing.
Introducing 24/7 shift managers for supervision to ensure immediate
decision making.
In the period under review, Bushveld owned and
operated the Vametco mine and processing plant and
the Vanchem processing plant. In the post-financial
period, in May 2024, the Group entered into a
binding term sheet with Southern Point Resources
(“SPR”) to conditionally sell the entire Vanchem asset
to SPR (“the Disposal”). The Disposal is conditional
upon Competition Commission approval, and it is
expected to close in the second half of 2024. This
section reflects the 2023 performance of both assets.
Vametco (100% ownership)
•
Integrated production facility comprising of an open-pit mine
that supplies ore to a vanadium processing plant located on
the same property, 8km north-east of Brits in South Africa’s
North West Province.
• Produces:
– nitro vanadium
– ammonium metavanadate
– modified vanadium oxide
Vanchem (100% ownership)
• Primary vanadium-processing facility at the Ferrobank Industrial
Park in Emalahleni Local Municipality in Mpumalanga Province.
• Produces:
– vanadium pentoxide
– ferrovanadium
– vanadium chemicals
– capable of producing vanadium trioxide
In May 2024, the Company agreed to the 100% sale of Vanchem
to SPR.
•
KEY
Main Road
Railway
NORTHERN
LIMB
3
WESTERN
LIMB
1
Rustenburg
Brits
EASTERN
LIMB
2
Middelburg
Witbank
Pretoria
Johannesburg
0
20
40
60
kilometres
1. Vametco mine and plant
2. Vanchem plant
3. Mokopane Project
15
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
OPERATING ASSETS AND OPERATIONAL REVIEW CONTINUED
VAMETCO MINI-GRID
Bushveld Energy has developed a commercial solar plus storage
mini-grid project for Vametco, with 3.5 MW of solar PV and 1 MW/4 MWh
VRFB. The mini-grid is owned and co-funded by Bushveld Energy and
Nesa Capital. Nesa holds 60% of the equity in the project and Bushveld
hold the remaining 40%. Construction of the mini-grid was completed
in September 2023 and all that remains outstanding is completion of
the grid compliance testing. Eskom provided approval to run the plant
at full power in June 2024 to complete grid compliance testing that is
expected to be in July 2024, following which the minigrid will be fully
operational. The plant will generate approximately 10% of Vametco’s
electricity requirements.
3. LEMUR HOLDINGS
Lemur Holding Limited, a Mauritius-incorporated company, is
developing an integrated thermal coal mining and independent
power project (the Imaloto Project) in Madagascar. The Company has
entered into a conditional agreement to dispose of Lemur Resources.
The transaction is subject to consent to the change of control by the
Development Bank of South Africa.
4. THE PQ IRON & TITANIUM PROJECT
The PQ Iron & Titanium project is a multi-commodity project under the
same licence as the Mokopane project, which is being sold to SPR as
part of the Mokopane transaction.
Non-core interests
1. MOKOPANE PROJECT
Mokopane is located on the central portion of the northern limb of
the Bushveld Complex. The project includes one of the world’s largest
primary vanadium resources, with an average grade of 1.80%
V2O5 in-magnetite.
An Ore Reserve of 28.56 Mt of Main Magnetite Layer mineralisation
was estimated as mineable, supporting a minimum 30-year life-of-mine.
In 2023, the Company agreed to sell its 64% interest in Mokopane to SPR.
2. BUSHVELD ENERGY
Bushveld Energy is 84% owned by Bushveld Minerals. It was
established to drive the positioning of vanadium redox flow batteries
(“VRFBs”) as a superior grid storage technology and their greater
adoption in the global energy storage market.
BELCO
Bushveld Electrolyte Company (“BELCO”) is located in East London,
South Africa. It is 55% owned by Bushveld Energy and 45% by the
Industrial Development Corporation (“IDC”). The plant is designed
to take vanadium oxide from Bushveld’s Vanchem operation as the
preferred feedstock provider. Oxide from Bushveld Vametco or non-
Bushveld suppliers may also be used. Construction of the BELCO plant
was completed in August 2023 and, following the initial production
run, product samples were distributed to potential customers for
qualification and compatibility. BELCO’s electrolyte has already been
successfully qualified by three international battery companies and is
in the qualification process with others. The Company is in discussion
with multiple companies on possible supply contracts. Furthermore,
BELCO is in the process of looking for either additional investors in
its plant or a buyer.
CELLCUBE
The Group commenced the sale process for its stake in CellCube, an
energy storage and battery manufacturer, as part of the plan to simplify
the business structure to focus on primary vanadium production for the
steel industry. The process is still ongoing and the Company is in
discussion with various parties.
16
Annual Report and Financial Results 2023 BUSINESS OVERVIEW
PRINCIPAL RISKS
Principal risks
1. RISK MANAGEMENT
In 2021, Bushveld Minerals implemented an enterprise risk
management strategy to gradually improve and position the Company
to achieve a mature risk culture, operate risk-intelligently, and optimise
value by 2025. The strategy evolves and matures continually to ensure
that risk management is firmly embedded throughout the business and
is aligned to the Company’s overall strategic objectives.
Understanding our risk management information and how it links
to Bushveld’s strategic objectives and goals is essential. Our risks
are categorised and linked to the Company’s strategy and objectives.
We evaluate the risks in terms of likelihood (probability) and impact
(consequence). Risks are then ranked in terms of high, medium and low.
This enables the Company to prioritise the risks and allocate resources
effectively and efficiently to manage them.
The Company has adopted the ISO 31000 (2018) Enterprise Risk
Management (“ERM”) Framework, and accordingly our risk management
strategy is underpinned by the principles contained in these
internationally recognised principles of value creation and protection.
2. ERM ROAD MAP
Our journey on ERM is summarised by the road map below. We continue
to roll out the plan to ensure that risk management is embedded across
Bushveld in line with our ERM Framework and Policy.
Risk management is one of the core responsibilities of the Board and
management team, and it is central to our decision-making processes.
The Board and management have the following primary responsibilities
in relation to risk management:
• Making a robust assessment of emerging and principal risks.
• Continuously monitoring risk management and internal controls.
• Embedding and promoting a risk-aware culture across the business.
OUR ERM ROAD MAP
2021
Basics – Risk management
– ERM Framework (formalise
and structure)
– Basic risk assessment
(high level)
2023
2025
Risk awareness
– Introduction – Risk management
process
Integration & optimisation
– Integrate – Risk to decision
making
– Governance structure, system
– Influence value protection
and culture
and creation
– Automate and optimise
risk management
– Principal risks identification
– Assess the risk management
(top 10)
process
START
2022
We are
here
2024
ERM Formalised & structured
– Customised – ERM Framework and Policy
– Leadership and commitment – ERM
– Review of principal risks (Board)
Improvement & insight
– Improve the risk management process
– Align strategy, risk and decision making
– Define risk tolerance and acceptance levels
FINISH
17
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSBUSINESS OVERVIEWGOVERNANCE PRINCIPAL RISKS CONTINUED
3. PRINCIPAL RISKS
Principal risk refers to a risk or combination of risks that could materially
affect the performance, future prospects or reputation of Bushveld
today or in the future, and have their origin inside or outside of the
Company. Principal risks comprise of risks which could threaten the
Company’s solvency, liquidity, performance and its strategic objectives
and business model.
Principal risks are those risks that could individually or collectively have
material and adverse effects on the Company, prior to any mitigating
controls. They emanate from the worst-case scenario, without regard
to probability, and assume all risk controls are ineffective.
Our focus for principal risks is to not only prevent their occurrence
or minimise their impact should they occur, but to also consider how
to maximise the possible benefits associated with strategic risks.
Principal risks are required to be evaluated at least once a year to
determine whether our exposure is within our risk appetite.
PRINCIPAL RISKS (HEAT MAP)
Below is the heat map of the consolidated principal risks before
adding the controls (inherent risks) and after adding the controls
(Residual Risks).
Inherent risks
d
o
o
h
i
l
e
k
L
i
5.0
4.0
3.0
2.0
1.0
0.0
(8) SCD
(7) ITS
(6) SFT
(5) HCT
(1) WCM
(2) ESG
(3) OPP
(4) EWS
As part of the risk management strategy, and in an effort to safeguard our
operation and ensure the sustainability of the Company, Bushveld has had
to change its overall strategy to focus on its key and primary business.
Residual Risks
Impact
0.0
1.0
2.0
3.0
4.0
5.0
Accordingly, we have reviewed and updated our principal risks to
ensure that there is alignment with the revised strategic objectives
of the Company. In addition, we continue to review and refine our risk
management process as part of continuous improvement in line with
our mission statement of being a ‘simple, fast and effective’ business.
d
o
o
h
i
l
e
k
L
i
5.0
4.0
3.0
2.0
1.0
0.0
(8) SCD
(7) ITS
(6) SFT
(5) HCT
(2) ESG
(1) WCM
(3) OPP
(4) EWS
0.0
1.0
2.0
3.0
4.0
5.0
Impact
ACRONYMS
(1) WCM – Working capital management
(5) HCM – Human capital management
(2) ESG – Environmental, Social & Governance
(6) SFT – Safety
(3) OPP – Operational performance
(7) ITS – Information technology & systems
(4) EWS – Electricity & water supply
(8) SCD – Supply chain disruption
18
Annual Report and Financial Results 2023 The following table is a detailed analysis of our principal risks, risk rating, and mitigation measures as determined for 2024.
1. WORKING CAPITAL MANAGEMENT (“WCM”)
Nature of risk
Risk rating
Controls and mitigating actions
− Low vanadium prices
High
− Enter into several frame contracts and finalise with sales agents.
− Channel a percentage of the vanadium production to selected markets with the highest prices.
− Sales price variance greater than five percent
High
− Produce different products to maximum contribution per product.
versus budget
− Exchange rate fluctuation
Medium
− Management to evaluate and consider hedging.
(Rand strengthening against the US Dollar
by more than five percent)
− Balance of funding not received before end
High
− Engagement with SPR GP1 Proprietary Limited and Acacia Resources Limited to ensure
of May 2024
receipt of the balance of shareholder funding and explain the business impact.
− Explore alternative funders.
− Plant stoppages due to non-payment
High
of suppliers
− Weekly meetings with stakeholders to address and manage the available cash.
− Prudent use of the available funds to keep operations running.
− Going concern materialising
High
− Proactive engagement with shareholders and debt holders.
− Detailed analysis and disclosure.
2. ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”)
Environmental:
− Atmospheric emission license (“AEL”)
compliance not adhered to, may lead to
Vametco total mine closure or fines
High
− Engage stakeholders to show plans in place to address identified issues.
− Commit and start work on capital projects identified.
− Environmental non-compliance impacting
High
production over a month
− Regular engagement with the regulatory authorities.
− Commence the multi-year capex plan.
− Slimes dams collapse − northern flank
Social:
− Community or social unrest leading to
operational disruptions resulting in months
of production losses
High
High
− Buttressing and constant monitoring.
− Engage regularly with communities.
− Continuous and proactive engagements with business and community forums on the state
of business, highlighting opportunities for communities.
− Strike management rules of engagement in place, and security/law enforcement.
Governance:
− Poor governance leading to ineffectiveness,
High
− Adherence to the Quoted Companies Alliance Corporate Governance Code (“QCA Code”).
− Maintain fit-for-purpose governance structures and processes that support good
irregularities, reputation damage, etc.
decision making.
− Board and Management oversight, Internal Audit to assist with identification of shortfalls
and non-compliance issues, etc.
Legal & Compliance
− Legal disputes, lawsuits and contract
breaches impacting the Company’s
financial stability and reputation
High
− Effective policy and procedures in place, including monitoring and enforcement to ensure
compliance with legal obligations.
− Clearly defined policies and procedures to guide and direct employees.
− Engaging with experienced legal counsel to provide guidance and advice where required.
− Inability to pursue legal actions due to
High
− Budgeting for legal and funding set aside to address some of the legal issues.
inability to pay legal fees
Regulatory Compliance Risk
− SPR transaction conditions fulfilment delays
High
− Submit comprehensive and complete filings with the competition authorities to mitigate
against requests for further information/delays for approval.
− London Stock Exchange Alternative
Investment Market (“AIM”) listing
requirements (including reporting) and
Market Abuse Regulations (“MAR”):
Failure to comply with regulations and laws
can result in significant fines, censure,
suspension/cancellation of the Company’s
shares from trading and damage to the
Company’s reputation
Medium
− Nominated Adviser whose responsibility it is to advise and guide Bushveld on its
responsibilities under the AIM Rules.
− Access to MAR experts through its UK legal counsel who advise Bushveld when required.
− Experienced legal counsel and investor relations who can provide guidance/advice.
19
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW PRINCIPAL RISKS CONTINUED
2. ENVIRONMENTAL, SOCIAL & GOVERNANCE (“ESG”) CONTINUED
Nature of risk
Risk rating
Controls and mitigating actions
− Mining right suspension as a result
of non-compliance on completing
the Social and Labour Plan (“SLP”)
High
− Continue to engage the Department of Mineral Resources and Energy (“DMRE”)
on the non-compliance and agree a robust catch-up plan.
− Continue to execute an accelerated plan to close off on the SLP.
− Non-resolution of disputes with Uitvalgrond
landowners (royalties, compensation, Black
Economic Empowerment (“BEE”) flip-up)
High
− Various options tabled for consideration by Bushveld’s CEO.
− Legal guidance and support to stakeholder relations and CEO in negotiations.
3. OPERATIONAL PERFORMANCE (“OPP”)
− Production budget variance greater than 10% High
− Put incentives in place for Business Unit Managers to deliver on budget.
− Shortage of ore supply – Vanchem is
dependent on third-party ore supply
exposing it to various external factors
High
− Diversify suppliers, including the usage of Vametco concentrate.
− Loss of Barren Dam freeboard − vital to
High
ensure the plant keeps running
− Industrial sprays, dam wall extension.
− Salt Recovery Plant online time.
− Reduce the wash water.
− No available product due to strikes or failure
Medium
− Maintain buffer material in stock to allow for unforeseen circumstances.
to produce due to lack of raw materials
− Laboratory equipment failure causing delays
Medium
− Collaborations with independent laboratories in place.
in dispatching products
− Structural failures of the plants
High
− Periodic structural assessments.
− Quick contractor mobilisation.
− Breakdowns preventing the achievement
of the budgeted critical asset online time
(plant availability)
High
− Increased focused planned asset management.
4. ELECTRICITY & WATER SUPPLY (“EWS”)
− Prolonged interruption of power supply −
Vanchem relies on municipality-supplied
power
High
− Maintain relationship with the municipality and Eskom, in principle load-shed agreement
and back-up generators.
− Water shortage at Vanchem negatively
High
affecting production
− Use and recirculate tailing water.
− Introduce raw water connection − mid term.
5. HUMAN CAPITAL MANAGEMENT (“HCM”)
− Attraction and retention of key/critical
skills impacting on business continuity
High
− Craft a talent framework, clear value proposition and succession plan matrix.
− Competitive remuneration practices.
− Develop talent from within and identify external sources of talent timeously.
− Develop short-term incentive (“STI”) and long-term incentive (“LTI”) retention schemes.
− Communicate with the team regularly, provide career growth opportunities.
− Labour disruption/strike action impacting
High
− Sensitise and engage labour on the current business context timeously.
production over two weeks
− Non-compliance with the Basic
Medium
Conditions of Employment (“BCEA”)
and fatigue management
− Planning and understanding of the financial impact on the business and make provisions.
− More stringent governance process, ensuring overtime is kept strictly to 40 hours.
20
Annual Report and Financial Results 2023 6. SAFETY (“SFT”)
Nature of risk
Risk rating
Controls and mitigating actions
− DMRE stoppage following non-compliance
to the Mine Health and Safety Act (“MHSA”)
High
− Identified deviations addressed immediately.
− Minimise and avoid repeated deviations.
− Engage the DMRE on operations’ liquidity.
7. INFORMATION TECHNOLOGY & SYSTEMS (“ITS”)
− Cyber-security resulting in operational
High
stoppage, disruptions and or financial loss
− Third-party monitoring of the systems and network access and protections.
− Email and device monitoring/controls.
− Back-up plans and systems in place.
− Manual systems leading to errors in reporting
High
− Simplify the reporting process/systems and reduce excel dependency.
− Perform reconciliations and checks.
− Automate some of the reports and functions.
8. SUPPLY CHAIN DISRUPTION (“SCD”)
− Port congestion resulting in extended delays
High
in shipping (at least a month)
− Utilise other available and/or different ports.
− Continue shipping at reduced throughput.
− Uneconomic supplier terms leading to
High
reduced profitability
− Increase the contract spend by over 15% of the 2023 actual.
− Renegotiate pricing whilst remaining out of terms with suppliers.
The risk of developing products for the energy transition has fallen from the list of principal risks as a result of the change in the Company’s strategy.
The Information Technology & Systems risk was included on the list of principal risks as a new and emerging risk for the Company, in line with our
revised business strategy.
21
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW SUSTAINABILITY
Our mission
To create value in a safe and sustainable way
through a true partnership with all our stakeholders,
especially our communities, while creating value for
our shareholders.
Fortunately, at the time of the release of the Annual Report, we are in
a more financially and operationally stable position. Under the direction
of new management, we look forward to furthering our sustainability
journey to facilitate and ensure shared value creation beyond
compliance in 2024.
The sustainable creation of shared value for all stakeholders is core to
our business and operational model. We are committed to maintaining
responsible mining and mineral processing practices beyond compliance
across all our operations and projects. This means that we operate
responsibly, respecting Environmental, Social and Governance (“ESG”)
issues, and adding sustainable value to our key stakeholders.
While we have remained steadfast in this commitment, it must be
acknowledged that our ESG performance was impacted and, to a degree,
inhibited, by the financial and resource challenges experienced by the
Company during the period under review. In the context of these austerity
and capacity measures, our ESG efforts and initiatives of 2023 were
primarily limited to ensuring compliance with regulatory requirements,
meeting the obligations of our SLP – a fundamental requirement of
South African mineral legislation – and developing and embedding
ESG capability across the business.
BUSHVELD MINERALS’ ESG STRATEGY
Our ESG strategy has four key objectives:
• To instil a culture of sustainability throughout the organisation;
• To fully integrate this culture into our business decision-making
process;
• To report on key ESG KPIs; and
• To communicate a consistent message about our ESG commitments
to all our stakeholders.
We are rolling out our strategy in four phases. Despite significant
resource constraints, we remained committed to the roll-out of this
strategy in 2023 with our efforts focusing on ensuring compliance and
strengthening our ESG governance framework and support structures
at a Group and operational level.
22
Annual Report and Financial Results 2023 Governance
Over the last few years, we have worked tirelessly to create a fit-for-purpose ESG governance framework
to support our ‘compliance beyond value’ philosophy and to provide a structured approach to the
measurement and transparent reporting of all non-financial aspects of our business.
We now have in place a robust governance framework that is driven by dedicated and qualified teams at an operational level with oversight
from the Board and Executive Management team.
The ESG Committee met every quarter in 2023 to assess progress made towards achieving set targets on various aspects of our ESG strategy.
The Committee discussed pertinent issues related to our licence to operate and legal compliance, and assessed progress on our sustainability
commitments. Some of the topics covered in 2023 included tailings dam safety, environmental compliance around air emissions standards,
the circumvention of water pollution, as well as Broad-Based Black Economic Empowerment (“B-BBEE”) transformation.
As part of our reporting standards, we continue to align our sustainability efforts with the International Finance Corporation (“IFC”) Environmental
and Social Performance Standards and various other global reporting standards such as the United Nations Sustainable Development Goals
(“UN SDGs”) and provide biannual updates against these global benchmarks.
GOVERNANCE FRAMEWORK OVERVIEW
Strategic
Vametco
Group ESG Committee
Vanchem
Social & Ethics Committee
Social & Ethics Committee1
Operational
Tactical
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Sustainability Forum (SF)
• Frequency: Varies, on-site
• Composition: Tactical & direct leads
• Nomination: Additional invites allowed
• DOA: Escalates to VSF, informs BU
Manager
• Matters:
– Health & safety, local community
development/CSI, training, jobs, local
procurement spend, small business
development, environment impact,
LED, Black ownership and economic
participation (B-BBEE)
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23
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
SUSTAINABILITY CONTINUED
ESG strategy 2023-2030
JOURNEY TO 2030
Overall vision
To be a responsible market leader
Environmental:
– Contribute to the development of a low-carbon economy.
– Proactively reduce our environmental footprint.
Social:
– Ensure the health and safety of our employees.
– Foster a diverse and respectful working environment.
– Invest in the development of our people and host communities.
– Improve the socio-economic conditions of the communities in which we operate.
– Plan for sustainable mine closure and developing ‘life-after-mine’ economic opportunities for the surrounding
communities and municipalities.
Governance:
– Engage proactively with our stakeholders and cultivate strong working relationships.
– Report transparently and consistently.
– Assess and manage risks continuously.
Environmental:
– Reduce Scope 1 and 2 greenhouse gas (“GHG”) emissions and set goal for net zero emissions by 2050.
– Grow the Company’s electricity self-generation capacity.
– Increase the percentage of vanadium that is reused.
– Increase the amount of water recycled/reused and reduce freshwater consumption.
– Minimise the risks associated with groundwater contamination.
– Align water reporting and management in line with ICMM guidance.
– Reduce waste to landfill, actively pursue partnerships in communities and strive for zero waste to landfill.
– Safely manage and decommission tailings storage facilities in line with the Global Industry Standard on
Tailings Management (“GISTM”) requirements.
– Develop an approach to biodiversity management and strive for biodiversity gains, or no net loss.
– Zero significant environmental fines or incidents.
Health & Safety:
– Zero fatalities.
– Improve Lost Time Injury Frequency Rate (“LTIFR”) in line with international best practice
in the mining industry.
Social:
– Improve attraction and retention of key talent.
– Reduction in external grievances recorded.
– Improve well-being of host communities through increased procurement spend, creation of jobs, and provision
of essential services.
– Increase procurement spend with host communities.
Governance:
– Obtain a Level 2 B-BBEE score.
– Equal representation of women on the Board and other leadership positions.
– Zero tolerance for unethical behaviour and corruption.
Commitments
24
Annual Report and Financial Results 2023 Task Force on Climate-related Financial
Disclosures (“TCFD”) Statement
STRATEGY
We understand the significance of implementing both climate
change mitigation and adaptation strategies as we move forward.
In our pursuit of operational excellence across our operations,
we are already considering international best practice in the drive
to reduce our carbon footprint.
Our journey forward
Given the operational and financial challenges experienced over the last
few years, Bushveld’s priority focus for the immediate future is to reach
and maintain operational stability at both operations. Once this has been
achieved, we intend to turn attention to investigating effective climate
change mitigation and adaptation measures. We will also intend to
refine our actions by developing specific climate change related targets,
including energy performance and the mitigation of GHG emissions. We
have similarly committed to investigate the scope for performing climate
change scenario analyses and developing a more comprehensive
understanding of physical and transition climate change risks.
Once completed, this will be communicated to our stakeholders as part of
a more formalised statement of our ambition regarding climate change.
RISK MANAGEMENT
Bushveld has a comprehensive ERM Framework in place. As with
our broader ESG priorities, climate risks are in the process of being
integrated into this risk management programme.
Our journey forward
While we have developed processes for evaluating and managing some
risks related to physical climate change, we aim to fully assess climate
change transition risks in the coming year.
METRICS AND TARGETS
Bushveld has been recording GHG emission related data since 2021,
which is the baseline year. These figures can be found on page 26 of
this report.
We monitor our performance through indicators related to climate
change, including our energy use, water consumption and other
GHG-producing activities.
We have not yet introduced GHG reduction targets for our producing
assets, being primarily focused on first achieving operational stability.
We will communicate these targets when appropriate.
In 2023, Bushveld Minerals tentatively embarked
on its TCFD reporting journey. With climate change
being the greatest threat facing humanity, we
recognise the importance of understanding and
transparently disclosing on our climate-related
risks and opportunities, particularly in how we may
impact and be impacted by the phenomenon over
the medium and long term. As a mining company
specialising in vanadium production in South Africa,
we understand the critical role that our operations
play in the global transition to a low-carbon economy.
By implementing the TCFD recommendations, we
are demonstrating our dedication to value beyond
compliance while providing our stakeholders with
a comprehensive understanding of how climate-
related issues may impact our business and how we
are taking steps to manage and mitigate these risks.
Given the resource constraints experienced in 2023, Bushveld is still,
admittedly, in the early stages of its TCFD reporting pathway. What
follows is a high-level summary of our management of climate-related
risks and opportunities. We commit to producing a more in-depth TCFD
Statement in the next annual reporting cycle, reflecting our dedication
to transparency and best practices in climate risk management.
GOVERNANCE
Bushveld is committed to strong corporate governance practices to
ensure transparency, accountability and oversight in its climate-related
decision-making processes.
The ESG Committee, a sub-committee of the Board of Directors, has
been tasked with assessing and managing all climate-related issues,
with the Board having oversight of such activities.
Climate change matters are primarily discussed at quarterly meetings
of the ESG Committee during which technical updates are presented
by the Group Executive: Operations on behalf of Vametco and Vanchem.
Our performance on various climate change related metrics, such as
energy use, GHG emissions and water consumption, is included in these
quarterly meetings.
Our journey forward
In 2024, the ESG Committee will be engaging with the Board on our
plans to implement the TCFD’s recommendations. Furthermore, we
will develop a training and capacity-building plan to ensure sufficient
expertise are developed across the business to understand and manage
climate change and its impacts. We will take steps to formalise our
structures and processes for dealing with climate change.
25
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW SUSTAINABILITY CONTINUED
Environment
STATUS OF ENVIRONMENTAL OPERATING
LICENCES/AUTHORISATIONS AND COMPLIANCE
All our operations have firm commitments to comply with all applicable
environmental laws and regulations (national, provincial and local)
at all times and to align with international standards, including the
IFC’s Environmental and Social Performance Standards and the
ISO 14001:2015 Environmental Management System.
ENVIRONMENTAL INCIDENTS
In 2023, we recorded 18 environmental incidents, a six percent increase
compared with 2022. The minor incidents have decreased from 11 in
2022 to eight minor incidents. Significant incidents increased from six
in 2022 to 10 in 2023. However, no environmental directives or fines
were issued. As we show below, we are taking corrective measures.
Incident type
Vametco
Vanchem
Total
Annual environmental performance assessment audits are conducted by
an external environmental specialist and by regulatory authorities. They
assess how we are complying with the conditions of the Environmental
Management Plan (“EMP”) and the mine’s environmental authorisations.
No major findings were reported from any of these audits in 2023 and
no environmental penalties were imposed by the regulatory authorities.
Minor environmental incidents
Significant environmental incidents
Major environmental incidents
Environmental directive/order
Fines for non-compliance
2024 Targets: 10% reduction
5
8
0
0
0
3
2
0
0
0
8
10
0
0
0
SUMMARY OF SIGNIFICANT INCIDENTS REPORTED IN 2023
Nature of significant incidents
Key learnings
Status of corrective actions
Storm water dam (“SWD”) overflow, resulting
in discharge of polluted water after rainfall.
– Divert unnecessary storm water away from SWD.
– Desilt SWD to maintain storage capacity.
– Install silt trap upstream of SWD.
– Maximise use of storm water during dry season to create adequate
capacity to accommodate wet season and accidental spillages.
Initiatives are in place to implement
corrective actions in 2024.
Barren Dam wall leakage.
– Bathymetric survey to determine the storage capacity of the dam and
amount of build-up sediments.
ENERGY MANAGEMENT AND CLIMATE CHANGE
The table below summarises fuel consumption per source at Vametco
and Vanchem:
Based on the 2023 energy consumption data, the table below
summarises GHG emissions for each operation:
2023 Energy consumption
Unit
Vametco
Vanchem
Total energy
consumption
Electricity (Eskom)
MWh
81,829
40,375
122,204
Sasol gas
LPG bulk
GJ
Kt
n/a
0.09
Synthol fuel (heavy fuel)
KL 319,690
230
n/a
n/a
230
0.09
319,690
11,881
35,798
10,581
1,311
17,798
18,212
2022 GHG emissions
Unit
Vametco
Vanchem
Totals
Tonne GHG/
Total products
Nitrovan/Chemicals (V₂0₅)
CO₂-eq
CH₄
N₂O
92,445
0.94
1.24
54,579
0.88
0.90
147,024
1.82
2.14
Below is a summary of tons emitted per ton of product produced
between the two business units:
0.001
#
0.001
0.001
2,259
0.001
524
0.002
2,783
GHG emission type
CO₂-eq
CH₄
Vametco
Vanchem
Tons of emissions
per ton of product
produced (nitrovan)
Tons of emissions per
product produced
(chemical products)
31.66
0.00032
25.51
0.00063
In 2024, the business focus will be to achieve operational stability,
however, we have targets in place to reduce GHG emissions and these
will be communicated in due course.
Pea coal
Duff coal
LPG cylinder
(48 kg/cylinder)
Acetylene
(13.6 kg/cylinder)
Diesel
# = data not available
n/a = not applicable
Kt
Kt
Kt
Kt
KL
26
Annual Report and Financial Results 2023 WATER MANAGEMENT
Given how important water is to the functioning of our operations,
we have a robust system of water accounting in place at both
Vanchem and Vametco.
WATER INTENSITY
Overall water intensity decreased from an average of 3 m³/ton of
ore milled in 2022 to an average of 2.4 m³/ton of ore milled in 2023.
Vametco achieved water intensity of 2.3 m³/ton of ore milled as
opposed to Vanchem’s 3.8 m³/ton of ore milled.
Water intensity: water m3/ton vanadium milled
Refer below to the 2024 target for water intensity at Vametco:
Vametco water withdrawals (ML)
Aspect
Key performance
indicator
Unit
2024 Target
(per annum) Comments
Resource utilisation
efficiencies
Water
intensity
m3/t of
crushed
ore product
2.2 (Vam)
3.0 (Vam)
Efficient use
of water
WATER WITHDRAWALS
Total water used decreased by two percent from 3,859 ML in 2022 to
3,765 ML in 2023. New water injected into or withdrawn from the water
resource decreased by 27% from 1,727 ML (in 2022) to 1,260 ML in 2023.
WATER DISCHARGE
Water discharge increased by 126% from 300 ML in 2022 to 678 ML
in 2023. Abnormal rainfall experienced in 2023 triggered the need for
the operations to discharge as a last resort to ensure safe continuation
of mining operations, and the action was consistent with the Water Use
Licence (WUL) at Vametco.
GROUNDWATER POLLUTION PLUME REMEDIATION
Vametco’s WUL notes the existence of a historic groundwater pollution
plume which should be managed through a series of interceptor
or scavenger boreholes. Shown in bottom chart opposite is the
performance of scavenger boreholes against the targets set in the WUL.
POLLUTION PLUME ABSTRACTION
The performance of pollution plume abstraction boreholes has failed
to meet the minimum abstraction threshold in the WUL over the past
three financial years. In 2023, we managed to achieve 61% (79 ML)
of the required WUL abstraction volume of 202 ML per annum. The
improvement in pollution plume abstraction in 2023 over 2022 was
the result of the large efficient abstraction pumps installed towards
end of 2022.
Vanchem water withdrawal (ML)
Table 4: Water discharge (ML)
Pollution plume abstraction vs WUL limit (ML)
27
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW12030,51,52,53,541,82,22,43,62,33,8FY 2021FY 2022FY 2023VametcoVanchemWater untensity m3 per ton3006000900150450750498580173358778194268191451FY 2021FY 2022FY 2023MunicBorehole Mine dewateringWater withdrawal in ML0100200300400240Water withdrawal in MLFY 2021397FY2022349FY2023Water withdrawal Munic0200400600800261Water dischargein MLFY 2021300FY2022678FY2023Water discharge05010015020044Pollution water abstraction in MLFY 202167FY202279202202202FY2023ActualWUL Limit SUSTAINABILITY CONTINUED
Environment continued
WATER RECYCLING
The Group managed to recycle or reuse a total of 2,505 million litres of
water in 2023, equivalent to a total reuse/recycling efficiency of 67%.
WASTE GENERATION AND MANAGEMENT
The tables below provide breakdowns of waste types generated
per business unit in the 2023 financial year.
Water recycling/reuse (ML)
2023 Waste generation
Unit
Vametco Vanchem
Total
Type
TSF
Return water
Storm water
Sewage effluent
Vametco
Vanchem
Total
Hazardous waste
(off-site disposed)
1,669
643
2,312
General waste
110
25
57
0
167
25
Kt
Kt
0.01
0.4
0.41
0.13
0.06
0.19
(municipal landfill)
Sewage effluent disposed
(municipal sewer system)
ML
0.36
129 129,36
Hazardous waste –
mineral tailings (calcine)
Non-hazardous waste –
mineral tailings
Waste rock dumps
Recycled waste (paper)
Recycled waste (scrap metals)
Recycled waste (rubber)
Recycled waste (used oil)
Boiler ash – community brick
manufacturing
Kt
Kt
Kt
Kt
Kt
Kt
Kt
Kt
429
291
720
700
1,846
0.001
0.251
0
31
1,932
22
n/a
0
0
0
6
0
722
1,846
0.001
0.251
0
37
1,932
Total waste generated in 2023 was 3,290 Kt, a 12% decline from the
2022 total waste of 3,726 Kt.
LAND AND BIODIVERSITY MANAGEMENT
Of the 11,618 hectares of land that the Group owns or manages, only
five percent has been disturbed for operational activities.
Land management
Unit
Vametco Vanchem Pamish
Total
Total land leased/
managed/owned
Total land disturbed
Total land rehabilitation
ha
ha
ha
1,508
543
0
82 10,029 11,618
578
0
35
0
0
0
No land was rehabilitated in 2023, so significant efforts will be required
from 2024 and beyond to ensure concurrent rehabilitation. Each
business unit will need to develop rehabilitation targets to reduce its
land disturbance footprint.
Vanchem FeV plant met all
compliance requirements.
Vanchem was issued with MES
postponement to comply with SO2
limit on condition it refurbish its
emissions abatement technology
for SO2 at its Kiln plants.
Vametco PM and NH3 failed to meet
MES requirement. Vametco has
planned for upgrade of emissions
abatement technologies (cyclones,
scrubbers and baghouses) in
FY2024 and beyond.
Vanchem main plant operates
within the Ferrobank industrial area,
which is experiencing a resurgence
of open cast coal mining activities,
excessive traffic by haulage trucks
and unrehabilitated third-party
calcine dump in immediate vicinity,
which makes it challenging to
devise and implement mitigation
measures.
Vanchem achieved 67% recycling efficiency, while Vametco achieved
66%. The Group target for water recycling in 2024 is 65%.
AIR QUALITY AND ENVIRONMENTAL DUST FALL-OUT
All facilities in business units hold AELs valid until 2027.
Summarised below is our compliance with AELs in 2023:
Vanchem
(main
plant)
Vanchem
(FeV
plant)
Vametco
Comment
Sampled
parameter
(mg/Nm³)
PM
SO₂
NH₃
Ambient
dust
(DFO –
mg/m²/day)
Exceeds limit
Below limit
PM –Particulate matter
SO2 – Sulphur dioxide
NH3 – Amonia
MES – Minimum Emission Standards
DFO – Dust fall-out
28
Annual Report and Financial Results 2023 Social development
SOCIAL AND LABOUR PLAN (“SLP”)
At the time of writing, Bushveld Minerals was in the final stages of
implementing the committed projects relating to Vametco’s 2018 to
2022 SLPs and Pamish (Mokopane) 2019 to 2024 SLP, as approved
by the DMRE. These projects are carried out in consultation and,
in some instances, in partnership with the local municipality,
beneficiary communities and other relevant stakeholders.
CASE STUDIES: COMMUNITY PROJECTS
MALEDU PRIMARY SCHOOL UPGRADE
In 2023, we completed an improvement project of the Maledu Primary
School, located in our host community of Rabokala. The project
involved the much-needed improvement of the school’s dilapidated
ablution and kitchen facilities; ZAR1.4 million was spent on upgrading
the amenities at the school.
Our new Vametco SLP for the period spanning 2023 to 2027 has
been submitted to the DMRE for approval. The SLP is Vametco mine’s
commitment to socio-economic and community development for
employees and its host communities.
To fully understand the socio-economic landscape of our host
communities and strengthen relationships with them, we have
commenced a comprehensive socio-economic baseline study, to be
completed in Q1 2024. The study will inform the Company’s community
social development strategy going forward, ensuring that we make a
lasting positive impact to the communities in which we operate.
ENTERPRISE SUPPLIER DEVELOPMENT
We are committed to supporting local small, medium and micro
enterprises (“SMMEs”) through our Enterprise and Supplier Development
(“ESD”) programmes. Our ESD strategy and associated programmes
contribute towards supporting businesses in local communities,
enabling them to grow local economies beyond the life of the mine.
The school has 550 learners all of whom have been provided with
an environment that is conducive to learning. We used the services
of a local business, Uitvalgrond Industries, to execute the project
and created 19 temporary jobs during the project. As a result of this
investment, the relationship, goodwill and engagement with the
community has improved.
RABOKALA WATER PROVISION
Access to clean running water and sanitation is a basic human right
and as such we are working with the Madibeng Local Municipality to
augment water provision in the Rankotea and Uitvalgrond communities.
Bushveld Minerals contributed a total budget of ZAR2 million for the
provision of clean and drinkable water in Rabokala. It covers drilling
and equipping additional boreholes, installing water tanks, and placing
communal taps next to the boreholes. For reliable availability of water in
the area, the boreholes will use a solar energy system, which will ensure
that water is available despite loadshedding and other power cuts.
At the time of writing, the project was being finalised.
Bushveld, in partnership with Procure Supply Chain Network (“SCNet”)
hosted two-day training sessions at both its Vametco and Vanchem
sites and trained 179 SMMEs in 2023. The key objective of the training
sessions was to up-skill the SMMEs to make use of the Bushveld
Minerals Procurement Portal, a platform that provides an automated
solution for interaction between the Company’s buyers and the vendors.
The second phase of the Uitvalgrond water project which involves
fixing the reticulation system and equipping all the other outstanding
boreholes was at the time of writing being completed. Bushveld
Minerals worked with the community to repair the main borehole pump,
and now the community can access clean water.
The SMMEs are trained on navigating the portal, to enable ease of
access and help them maximise their interaction with the Company
through the platform. Through the information available on the portal,
we can determine the capabilities and development requirements
of SMMEs in and around our local communities and directly give
support where it is required.
ROADS AND STORM WATER PROJECTS
The mine is currently working with Madibeng Local Municipality to
re-gravel some of the local roads in Rankotea, Switch and Thetele,
as well as Mothutlung. This road improvement project is part of the
municipality’s Integrated Development Planning (“IDP”) infrastructure
development programme.
OUR APPROACH TO STAKEHOLDER RELATIONS
The Company continues to engage with different stakeholders,
including the three spheres of the South African government: the DMRE
at national level, and the provincial and local government departments
where Bushveld Minerals’ operations are located.
We continue to meet regularly with various community groups in our host
communities, which range from unemployment forums to community
concern groups. Issues discussed with these forums range from
employment opportunities to community development initiatives and give
the business an indication of key issues pertinent to each community.
At the time of writing, the project was in its final stages of implementation.
Vametco appointed Local SMMEs from all three communities to
implement this project. We set aside a total budget of ZAR3 million for this
programme and 20 people were employed during the construction stage.
29
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW SUSTAINABILITY CONTINUED
Our people
HEALTH AND SAFETY
We care about our employees and communities, and we have a
responsibility to ensure their safety and well-being. We take a risk-
based approach to health and safety. It starts with a Baseline Risk
Assessment, moving to an Issue-based Risk Assessment, and then to
a Continuous Risk Assessment, which includes lag and lead indicators.
We do not tolerate any deviations from regulatory requirements,
whether by our own staff or contractors.
In 2022, Vanchem was certified in ISO 9001:2015 Quality Management
Systems (“QMS”), while Vametco retained its QMS certification.
In 2023, a safety diagnostic audit was conducted at both Vanchem and
Vametco to determine the safety and risk maturity levels and identify
opportunities for improvement. This included the field verification
of activities and the application of documented safety management
processes, using pre-defined assessment tools.
From the consolidated report, 10 priority initiatives were identified to
improve the maturity level from reactive to independent and ultimately
to interdependent, in line with the Bradley Safety Maturity Curve.
A corrective action plan was developed to address the gaps, which
are tracked for implementation and closure. The corrective action
plans are discussed at operational level, in operational committee
and Executive Committee meetings.
SAFETY
Our commitment to achieving zero harm while mining and processing
was evident in our zero-fatality record in 2023.
The Group Total Injury Frequency Rate (“TIFR”) improved from 10.32
in 2022 to 2.31 in 2023. No lost time injuries were recorded during the
financial year, only first aid cases, caused largely by inability to identify
hazards (mainly slip, trip and fall incidents) during routine activities.
The safety team has intensified its awareness campaign to employees
and contractors to reduce these incidents.
VAMETCO
Vametco reported zero fatalities and zero lost time injuries in 2023.
The TIFR improved from 11.15 in 2022 to 6.21 in 2023 due to zero
lost time injuries.
The DMRE’s Mine Health and Safety inspectors conducted 16 inspections
in 2023 compared to 12 in 2022. Eight Section 55 instructions and
one Section 54(c) instruction were issued in terms of the MHSA.
All instructions were implemented, and reports were submitted
to the DMRE.
VANCHEM
Vanchem recorded zero fatalities and two lost time injuries in 2023.
The TIFR improved from 9.92 in 2022 to 3.77 in 2023. The Department
of Labour conducted one inspection at Vanchem plant with particular
emphasis on contractor management. A compliance order was issued
in respect of payment to one of the suppliers.
30
SAFETY INDICATORS
Land
Management
Safety indicators
Vametco Vanchem
Bushveld
Minerals
Injuries
First aid cases
Medical treatment cases
Fatalities
Total recordable injuries
Lost time injuries
Lagging
indicators
Time lost
LTIFR
TIFR
Incidents
Critical incidents
High potential risk
incidents
Near miss incidents
reported
Authority
indicators
Section 55 directives
Section 54 directives
9
4
0
13
0
0
0
6.21
0
2
32
8
1
1
2
0
4
2
4.90
1.88
3.77
0
5
7
0
0
10
6
0
17
2
4.90
0.94
4.99
0
7
39
8
1
HEALTH
To protect our employees’ general health and wellness, we monitor
chronic diseases, screen for tuberculosis and provide HIV/Aids
voluntary counselling and testing at on-site and off-site occupational
health clinics.
Category
Health indicators
Vametco Vanchem
Head
Office
Bushveld
Minerals
Occupational
diseases
New ‘other’
cases
Total
occupational
diseases
New noise
induced hearing
loss cases
New respiratory
diseases
Non
occupational
diseases
1
0
1
2
1
1
159
43
0
0
0
0
3
1
2
202
In 2023, three occupational diseases were recorded: one noise-induced
hearing loss case and two respiratory illnesses, this compared against
a single occupational disease reported in 2022. The number of non-
occupational diseases increased to 202 from 165 in 2022.
Annual Report and Financial Results 2023 OUR CULTURE JOURNEY
We continue to progress our values and culture journey with the key
focus over the 2023 period being the strive for excellence, including
proper planning and focusing on the right performance outcomes.
The emphasis has largely been on back to basics, goals and guidelines
that are linked to the overall business objectives. This has included
continual support for line management to ensure that our performance
processes are properly managed and compliance tracked, often
utilising project management principles. The objective of building a
culture of performance within the Company remains a journey and
our plans for 2024 will include empowering our line managers and
allowing them to take greater accountability for leading performance
management. We will also be considering innovative ways and means
of rewarding good and exceptional performers over and above the
traditional remuneration practices.
OUR VALUES CAN BE SUMMARISED AS FOLLOWS:
CARE
We care for the safety and health of our
people, safety of our assets, environment
and our communities.
COURAGE
We are pioneering, resilient, innovative,
curious and open to new ideas.
COLLABORATION
We collaborate for shared success by
building unity through our shared purpose
and effective communication.
EXCELLENCE
We continuously strive for excellence through
rigour, effort and deliberate planning, focused
on the right performance outcomes.
TRUSTED
We are trusted because we show integrity,
aspire to deliver on our promises, and go
beyond compliance.
REVIEWING OUR POLICIES AND OTHER BUSINESS PROCESSES
The work of reviewing our Company-wide policies in 2023 has
continued and a lot of progress has been made with 70% of such
policies already updated. The remaining draft policies (which have
potential financial implications) will be finalised and signed off during
the course of the 2024 financial year.
EFFICIENT AND INNOVATIVE WAYS FOR ATTRACTING TALENT
Part of our strategy for attracting and retaining critical talent has
been to consider more efficient and innovative ways and means
of replacement as and when losses are experienced. We secured
replacement for 99% of these roles utilising online talent recruitment
platforms. This method of recruitment has proven to be equally efficient
and much more expeditious and cost effective than the traditional
usage of recruitment and headhunting agencies.
OVERALL GROUP STAFF COMPLEMENT
The Group employed a total of 780 people at the end of December
2023. The table below provides a breakdown by business unit:
Employment type
Permanent
Fixed-term contractors
Learners/apprentices/
interns/graduates
Total
Corporate
incl. Bushveld
Energy and
Lemur
58
4
–
62
Vametco
Vanchem
427
13
11
451
231
31
5
267
DIVERSITY AND INCLUSION
Our gender ratios have slightly improved over the year under review.
We increased our ratio to 23.3% (187) female staff versus 76.7% (549)
male staff. This is compared with 2022 when we had 23% (185) female
employees versus 77% (621) male staff. Gender representation will
remain essential to our transformation plans in the coming years.
RESTRUCTURING FOR LONG-TERM COMPETITIVENESS
The Company has been implementing various strategic cost curtailment
measures aimed at ensuring the long-term competitiveness and financial
stability of the Group as well as rightsizing headcount at the Group’s
Head Office, given Bushveld’s renewed focus on its core operational
assets. This decision was driven partly by global market conditions, but
also by the decision to focus on our core operating assets, Vametco and
Vanchem, while disposing of other assets, including our downstream
energy assets and the Mokopane development project.
Approximately 40% of corporate office positions were reduced.
This strategic move is expected to result in an annual saving of
approximately US$1.5 million.
31
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW SUSTAINABILITY CONTINUED
Our people continued
EMPLOYEE RELATIONS
The key drivers of the strategy will be collaboration and cooperation
across the functions with organised labour to achieve operational
stability and functional relationships.
HIGHLIGHTS OF 2023
• The Future Forum was re-launched at Vametco as part of compliance
with the Mineral and Petroleum Resources Development Act.
The terms of reference are due to be finalised in February 2024.
• Streamlined and standardised the Disciplinary and Grievance Code
across the operations.
• Two years without business disruptions in the form of a strike/labour
disruption due to engagement and partnerships with organised
labour.
Implemented Relationship Building by Objective (“RBO”) with
Vanchem management.
•
OTHER FOCUS AREAS
• Roll out a robust programme on business understanding across
the business units and with regional labour representatives. This
programme is aimed at ensuring all stakeholders understand the
state of the business, key focus areas, the state of the vanadium
market and everyone’s contribution to the Company’s success.
Identify and manage the employee relations risks on a
continuous basis.
•
• Establish an annual alignment forum with key national union leaders.
32
Annual Report and Financial Results 2023 33
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW GOVERNANCE
34
Annual Report and Financial Results 2023 Governance
CONTENTS
36 Board of Directors
37 Executive Management team
38 Corporate Governance Report
42 Report of the Audit Committee
44 2023 Remuneration Report
52 Directors’ Report
53 Statement of Directors’ Responsibilities
35
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSBUSINESS OVERVIEWGOVERNANCE BOARD OF DIRECTORS
Meet the Board of Directors
N
R
D
E
N
D
R
A
D
E
N
D
MICHAEL J. KIRKWOOD (77)
INDEPENDENT
NON-EXECUTIVE CHAIRMAN
BOARD APPOINTMENT
April 2018
Experience: After spending 31 years
at Citigroup, Michael has taken on the
chairmanship of Ondra LLP. He has
held main board roles at several listed
companies, including Kidde, Circle Holdings,
AngloGold Ashanti and UK Financial
Investments. He was deputy Chairman of
PwC’s Advisory Board, Chairman of British
American Business, and President of the
Chartered Institute of Bankers.
Qualifications: Graduate of Stanford
University; Fellowships: FCIB, HonFCT;
Honours: CMG.
CRAIG W. COLTMAN (63)
CHIEF EXECUTIVE OFFICER
BOARD APPOINTMENT
July 2023
Experience: 30+ year career with De
Beers Consolidated Mines, with Craig’s
most recent role being Chief Financial
Officer and Executive Director. He has
extensive international project management
experience including serving on the boards
of JV companies between De Beers and the
Namibian and Botswanan Governments.
He was project director for the migration of
the De Beers sales and marketing function
from London to Gaborone. Craig is currently
Chairman of De Beers Pension Fund.
Qualifications: A qualified UK Chartered
Management Accountant (CIMA) and holds
a South African Honours degree in Finance
from UCT.
KEVIN ALCOCK (61)
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
BOARD APPOINTMENT
March 2022
Experience: Kevin’s business career
has been focused on financial services,
management consulting and technology. He
successfully founded an asset management
consultancy business which was later sold to
a London-listed Company, where he became
CEO. Over the past 15 years, he continues to
be active in various Non-Executive Director
roles, including board positions at prominent
asset management and outsource services
companies in the UK and Southern Africa.
Qualifications: Chartered Accountant.
DAVID NOKO (67)
INDEPENDENT
NON-EXECUTIVE DIRECTOR
BOARD APPOINTMENT
May 2022
Experience: David’s comprehensive
business acumen is the result of many
years of advising prominent companies.
He has held senior roles at General Electric
Company, Pepsi Cola International, South
African Breweries, De Beers Group, and
AngloGold Ashanti. David is Chairman of the
Council of the University of the Free State.
Qualifications: Mechanical Engineer; MBA
from Heriot Watt University; postgraduate
Diploma in Company Direction from
the Graduate Institute of Management
Technology.
A
E
R
D
MIRCO BARDELLA (65)
INDEPENDENT
NON-EXECUTIVE DIRECTOR
BOARD APPOINTMENT
March 2022
Experience: Chartered Accountant and
former EY Assurance Partner, Mirco has
led audits in the natural resources sector
and advised organisations on a range
of assurance and governance services.
Throughout his career, he has been involved
in mentorship programmes, diversity and
inclusiveness initiatives, as well as other
aspects of human resources.
Qualifications: Chartered Accountant;
Member of SAICA and the Institute of
Chartered Accountants in Australia and
in Scotland.
36
E
ESG Committee
D Disclosure Committee
N Nomination Committee
R Remuneration Committee
A Audit Committee
Denotes Chair
* The Disclosure Committee was expanded in March 2022 to include dealing with
ad hoc matters requiring attention outside of the quarterly Board meetings but
that did not necessitate a full Board meeting. However, all meetings last year were
treated as full Board meetings and there were no Disclosure Committee meetings.
Annual Report and Financial Results 2023 EXECUTIVE MANAGEMENT TEAM
Executive Management team
CRAIG W. COLTMAN (63)
CHIEF EXECUTIVE OFFICER
SINCE
July 2023
Experience: 30+ year career with De
Beers Consolidated Mines, with Craig’s
most recent role being Chief Financial
Officer and Executive Director. He has
extensive international project management
experience including serving on the boards
of JV companies between De Beers and the
Namibian and Botswanan Governments.
He was project Director for the migration of
the De Beers sales and marketing function
from London to Gaborone. Craig is currently
Chairman of De Beers Pension Fund.
Qualifications: Chartered Management
Accountant (CIMA) with South African
Honours degree in Finance from UCT.
ROBBIE TAYLOR (55)
INTERIM CHIEF FINANCIAL
OFFICER
SINCE
February 2024
Experience: Over 27 years’ experience
as a finance executive in various sectors.
In various sectors, Robbie has extensive
experience working with listed entities and
multinationals.
His professional skills include areas such
as mergers and acquisitions, cost control,
corporate governance, unit economics
(profit and cost per unit), profit optimisation,
management accounting, and financial
reporting and treasury.
Qualifications: Chartered Accountant with
a Bachelor’s degree in commerce from UCT.
LUCAS MSIMANGA (53)
GROUP EXECUTIVE: OPERATIONS
SINCE
July 2022
Experience: Lucas is a seasoned
metallurgical engineer with over 25 years’
experience in the mining and processing
sectors. He has held senior operational
roles at Rio Tinto, BHP Billiton and
South32, where he was exposed to different
commodities. He is also the former Vice-
President of Manganese South Africa.
Qualifications: BSc (Hons) Metallurgical
Engineering; Masters in Business
Leadership.
VIKI RAPELAS (45)
GROUP EXECUTIVE: LEGAL,
GOVERNANCE AND COMPLIANCE
SINCE
January 2019
Experience: Viki was admitted as an attorney
of the High Court of South Africa in 2004
and admitted as a notary and conveyancer
in 2012. She has been the legal adviser
to the Bushveld Minerals Group since
2007. She has over 20 years’ experience
in transactional advisory, mergers and
acquisitions and general corporate and
commercial law.
Qualifications: International Law
qualification from University of Antwerp
(Belgium); BProc and LLB from Rand
Afrikaans University (now University
of Johannesburg).
SIBU MAJOZI (40)
GROUP EXECUTIVE: HR,
CORPORATE AFFAIRS AND
SUSTAINABILITY
SINCE
August 2022
Experience: Sibu has over 16 years’
experience in corporate communications,
gained in South Africa and abroad. She
spent just over nine years at the De Beers
Group and has worked in corporate
communications for Suntory and Naspers/
Prosus in the Netherlands. She was
previously the Executive Manager for
Corporate Communications and Reputation
Management at Transnet Freight Rail.
Qualifications: Bachelor of Commerce
(Economics and Marketing from University
of KwaZulu Natal).
37
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW PRINCIPLE 3:
TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL RESPONSIBILITIES
AND THEIR IMPLICATIONS FOR LONG-TERM SUCCESS
Bushveld’s strategic intent of value beyond compliance is anchored
on the principle of creating shared, long-lasting value for all its
stakeholders. It is recognised that the successful execution of
its business strategy requires the Company to build and maintain
meaningful, well-functioning relationships with multiple stakeholders,
including, and very importantly, the communities around our projects
and operations. We, therefore, make every effort to meaningfully
engage with our stakeholders on material matters.
The Company’s sustainability strategy is focused on environmental,
social and governance (“ESG”) principles that aim to integrate material
ESG considerations into the decision-making process across the value
chain. Material ESG key performance indicators (“KPIs”) are reported
on, and a consistent message communicated to stakeholders on key
ESG commitments.
The ESG Committee, which was established in 2022, has oversight
of implementing Bushveld’s ESG strategy, which includes engaging
with wider stakeholders and ensuring our social licence is maintained
effectively.
More information and detail on this topic can be found within the
Sustainability section of this report.
PRINCIPLE 4:
EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING BOTH OPPORTUNITIES
AND THREATS, THROUGHOUT THE ORGANISATION
The Board has primary responsibility for establishing and maintaining
the Company’s governance structures, internal controls and risk
management systems, which are designed to meet the particular
needs of the Company and address the risks to which it is exposed.
The oversight responsibility for reviewing the adequacy and
effectiveness of these has been delegated to the Audit Committee.
The Company adheres to an Enterprise Risk Management (“ERM”)
Framework, developed in 2021, the primary purpose of which is to
formalise a systematic and collaborated risk management culture,
as well as guide and direct the Company’s governance and decision-
making. Further details on risk management are provided in the
Principal risks section of this report.
Other important tools to identify, evaluate and manage significant
risks are frequent Board meetings, which consider detailed reports
on the operations of the Company, as well as reports received from
the Internal Auditor and the Company’s External Independent Auditor,
via the Audit Committee, on the state of Bushveld’s internal controls.
CORPORATE GOVERNANCE REPORT
The Board collectively recognises that implementing an effective
corporate governance structure is of paramount importance to continue
delivering on the Company’s business objectives, while maintaining our
licence to operate to create long-term value for shareholders.
Bushveld continues to adhere to the Quoted Companies Alliance
Corporate Governance Code (“QCA Code”), which takes key elements
of good governance and applies them in a manner that supports the
different needs of growing companies.
The Board is satisfied that it is applying the 10 principles of the QCA
Code effectively across the business. These principles are set out below,
supplemented with details of how the Company is applying them and
how the principles will support the Company’s medium to long-term
success.
DELIVER GROWTH
PRINCIPLE 1:
ESTABLISH A STRATEGY AND BUSINESS MODEL THAT PROMOTES LONG-TERM VALUE
FOR SHAREHOLDERS
In the year under review, Bushveld overhauled its strategy to ensure
the viability of our business model in the context of sustained adverse
market conditions. The Board believes that this amended strategy,
which principally focuses on the stability of the core operating assets,
Vametco and Vanchem through greater efficiency measures and
effective management, will serve to unlock long-term value of these
operations and thereby deliver returns to shareholders.
The operating model defines the structures in which Bushveld operates
and the capabilities it requires to achieve its goals.
PRINCIPLE 2:
SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS AND EXPECTATIONS
The Board is committed to providing effective communication with
shareholders and attaches great importance to delivering clear and
transparent information on the Company’s activities and strategy.
Since assuming the role as Chief Executive Officer, Craig Coltman
has devoted time, through active engagement, to understand the
requirements of shareholders and other key stakeholders as a
fundamental step in meeting their needs and expectations.
The Bushveld Minerals investor relations team communicates
the value proposition to both institutional and private investors,
as well as the broader market, using different forms of engagement.
These engagements provide valuable feedback for the Board’s
decision-making process and determine how the Company can
best meet shareholder expectations.
The Company disseminates news on significant developments and
regular operational updates in stock exchange announcements via
the Regulatory News Service (“RNS”). These news releases are also
available on the Company’s website at http://www.bushveldminerals.
com/regulatory-news-rns/. The website contains a wealth of information
for existing and potential shareholders.
Conference calls are hosted by the Chief Executive Officer and Finance
Director after the release of quarterly operational updates and the
interim and full-year results.
Any shareholder enquiries can be directed to
info@bushveldminerals.com or chika.edeh@bushveldminerals.com.
38
Annual Report and Financial Results 2023 MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
PRINCIPLE 5:
MAINTAINING THE BOARD AS A WELL-FUNCTIONING, BALANCED TEAM LED
BY THE CHAIRMAN
The 2023 Board consisted of the Chair, three Non-Executive Directors
and two Executive Directors (the CEO and Finance Director).
PRINCIPLE 6:
ENSURE THAT THE DIRECTORS POOL THE NECESSARY UP-TO-DATE EXPERIENCE,
SKILLS AND CAPABILITIES
The Directors of Bushveld Minerals are appointed based on the varied
skills and experience they contribute, as well as their personal qualities
and capabilities. Their full biographical details are included on page 36.
In June 2023, having led the Company for over 11 years, Bushveld’s
co-founder and CEO, Fortune Mojapelo, stepped down from his role
and was replaced by Craig Coltman, former Chief Financial Officer
and Executive Director of De Beers Consolidated Mines.
Subsequent to that, in mid-November 2023, it was announced that
the Company’s Finance Director, Tanya Chikanza, had tendered her
resignation and concurrent with that had been suspended from her
contractual appointment pending the outcome of an investigation in
respect of alleged misconduct relating to failure to disclose a material
conflict of interest. Following the outcome of that investigation, Tanya’s
employment and position on the Board ended on 31 January 2024.
Thereafter, Bushveld appointed Robbie Taylor as Non-Board Interim
Chief Financial Officer.
Consequently, the Board currently consists of the Chairman, three
Non-Executive Directors and one Executive Director (the CEO). The
Chairman and Non-Executive Directors (Kevin Alcock, Mirco Bardella
and David Noko) are considered to be Independent of Management for
the purposes of corporate governance and free to exercise independent
judgement. Kevin Alcock was appointed as Senior Independent Non-
Executive Director with effect from December 2023. The shareholdings
of the Non-Executive Directors in the Company are not deemed material,
nor is it believed that it has an influence on their ability to make impartial
decisions or to act in the best interest of all shareholders.
The roles of the Chairman and CEO are clearly separated. The CEO is
responsible for the day-to-day operational management of the business
and is supported by the Executive Management team, while the
Chairman is responsible for the leadership and effective working of
the Board, and the implementation of sound corporate governance.
With respect to the time commitment required from Non-Executive
Directors, it is expected that they will spend circa 30 days per annum
on work for the Company. Furthermore, the Board met formally four
times during the year ended 31 December 2023, with an additional six
meetings held to consider matters falling outside the quarterly cycles.
Barring Tanya Chikanza, every Director on the Board attended all
meetings (Craig and Fortune only within their tenure).
The Board is supported by the Audit, Remuneration, ESG, Nomination,
and Disclosure Committees, which operate within specific terms of
reference, as described in more detail in Principle 9 below.
The Chairman’s Statement on page 6 includes details on some
expected changes to the composition of the Board.
The Board is able to engage independent advisers to seek external
expertise and advice, should the need arise. Additionally, as part of the
induction programme conducted by the Company’s nominated adviser,
Directors are briefed on regulations that are relevant to their role as
directors of an AIM-quoted company.
The Board is determined to maintain the right balance of Directors and the
Nomination Committee continually reviews the composition of the Board
to ensure that it has the necessary breadth and depth of skills to support
the Company’s strategy. Every year, at least one-third of Directors retire
by rotation and, if they offer themselves for re-election, this is put to a
vote of the shareholders at the Annual General Meeting (“AGM”).
PRINCIPLE 7:
EVALUATE BOARD PERFORMANCE BASED ON CLEAR AND RELEVANT OBJECTIVES,
SEEKING CONTINUOUS IMPROVEMENT
The Board recognises the importance of reviewing the effectiveness of
its performance and how the Directors and Committees work together
to achieve the Company’s objectives.
Responsibility for assessing and monitoring the performance of
the Executive Directors lies with the independent Non-Executive
Directors, using agreed KPIs. Further details can be found in the
Remuneration Report on page 44.
The Board as a whole evaluates its own performance internally, as
well as the performance of the Committees, and uses the evaluation
process to identify opportunities for improving the performance of
the Board and to solicit honest and constructive feedback. The last
evaluation process was initiated in February 2024 for 2023, led by the
Chairman and facilitated by the Company Secretary. This involves the
completion of a confidential questionnaire by each Director covering a
number of areas, including Board structure, strategy, risk management,
processes, Board dynamics, Committee effectiveness, evaluation of the
CEO and Chairman, and culture matters. A report is collated with the
responses received, on an unattributed basis, which is then presented
to the Board for discussion. The overall performance of the Board in
2023 was considered to have improved from 2022 with a great deal
achieved in the last six months of 2023.
As noted in Principle 6, succession planning is driven by the Nomination
Committee.
39
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CORPORATE GOVERNANCE REPORT CONTINUED
PRINCIPLE 8:
PROMOTE A CORPORATE CULTURE BASED ON ETHICAL VALUES AND BEHAVIOURS
Bushveld is committed to the highest standards of transparency
and accountability. It conducts its business in an honest and ethical
manner, following sound governance principles, and is determined
to ensure that ethical values and behaviours are fully embedded
throughout the Company. Bushveld seeks to ensure that responsible
business practices are fully integrated into the management of its
operations, which is essential for operational excellence and to
deliver the Company’s strategy.
PRINCIPLE 9:
MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES THAT ARE FIT FOR PURPOSE
AND SUPPORT GOOD DECISION MAKING BY THE BOARD
The Board’s role is to provide strategic leadership to the Company
within a framework of prudent and effective controls, enabling risk
to be assessed and managed. It is supported by Committees that
have the necessary skills and knowledge to discharge their duties and
responsibilities effectively. These Committees are primarily made up
of Non-Executive Directors. Descriptions of the various Committees
are provided below.
BUSHVELD HAS THE FOLLOWING POLICIES:
CONFLICTS OF INTEREST, ANTI-CORRUPTION AND BRIBERY POLICY
We take a zero-tolerance approach to bribery and corruption and
are committed to acting professionally, fairly and with integrity in
all our business dealings and relationships, wherever we operate.
The purpose of this policy is to provide clear guidelines and acceptable
practices to all employees to avoid potential and perceived conflicts
of interest. Bribery and corruption in any shape or form is strongly
discouraged and employees found to be contravening these policies
may be subject to disciplinary proceedings.
FRAUD PREVENTION AND FRAUD INVESTIGATION POLICIES
The purpose of these policies is to detail the Company’s expectations
on managing fraud risk and to develop awareness of that risk in the
organisation. They provide guidance to those who find themselves
having to deal with fraud, establish procedures and assign responsibility
for the investigation of fraud and related offences.
WHISTLE-BLOWING POLICY
This policy is intended to help counter silence and inaction and assist
in preventing corruption within Bushveld and the broader public sector
in which the Company operates. We want to encourage employees and
stakeholders to feel confident about raising breaches and concerns and
ensure that whistle-blowers will be protected from possible reprisals or
victimisation if and when disclosures are made in good faith.
SHARE DEALING POLICY
The Company’s policy for dealing in its shares incorporates all
obligations under both Rule 21 of the AIM Rules for Companies
and Article 19 of the Market Abuse Regulations. The policy explains
when shares in the Company can be bought or sold by Directors and
relevant employees, along with the requirements and procedures that
have to be followed when doing so. The Company has a memorandum
on inside information which provides additional information on
applicable laws and possible sanctions, market-abuse provisions
and communication requirements.
SOCIAL MEDIA POLICY
While the Company recognises the benefits of social media engagement
in reaching its stakeholders, this policy is in place to facilitate the
responsible use of social media and minimise the risks to the Company
through its misuse, which could affect its reputation.
AUDIT COMMITTEE
The Audit Committee is responsible for monitoring the integrity
of the financial statements of the Company, including its annual and
half-yearly reports, interim management statements, preliminary
results announcements and any other announcements relating
to financial performance, before they are presented to the Board
for approval. Its duties include reviewing and reporting on the
Company’s internal financial controls, risk management initiatives,
and governance structures.
The Committee is responsible for recommending the appointment
of the auditors and reviewing and monitoring their independence
and objectivity. It holds meetings at least three times a year at
appropriate intervals in the financial reporting and audit cycle,
and as otherwise required.
The Internal Audit and Risk function assists the Audit Committee
in executing its responsibilities.
The role of the Audit Committee and the duties it fulfilled during 2023,
along with membership details, are more fully described in the Report
of the Audit Committee.
The Audit Committee’s members are Mirco Bardella (as Chair),
and Kevin Alcock. The Committee had quarterly meetings.
REMUNERATION COMMITTEE
In 2023, the Remuneration Committee comprised Kevin Alcock
as Chair, Michael Kirkwood and Mirco Bardella. The Committee
determines the framework for the remuneration of the Company’s
Chairman and Executive Directors and, as appropriate, other senior
management, including pension entitlements, share option schemes
and other benefits. Remuneration of Non-Executive Directors is a
matter for the Board. No Directors or senior managers are involved
in any decisions on their own remuneration. A comprehensive
Remuneration Report can be found on pages 44-51. The Committee
met five times during the year.
40
Annual Report and Financial Results 2023 NOMINATION COMMITTEE
The Nomination Committee is responsible for reviewing the structure,
size and composition of the Board, making recommendations to the
Board on any changes, succession planning for Directors and senior
management, preparing a description of the role and capabilities
required for a particular appointment and nominating candidates
to fill Board positions as and when they arise. The Committee also
makes recommendations to the Board concerning membership of the
Audit, Remuneration and Disclosure Committees, in consultation with
the Chair of each of those committees. The Nomination Committee
comprises Michael Kirkwood (as Chair), David Noko and Craig Coltman.
The Committee met twice during the year.
BUILD TRUST
PRINCIPLE 10:
COMMUNICATE HOW THE COMPANY IS GOVERNED AND IS
PERFORMING BY MAINTAINING A DIALOGUE WITH SHAREHOLDERS
AND OTHER RELEVANT STAKEHOLDERS
Bushveld is committed to providing effective communication with
shareholders. We attach great importance to delivering clear and
transparent information on the Company’s strategy, activities and
financial position. Our strategies and activities for communicating
with shareholders, both existing and potential, are described under
Principle 2.
ESG COMMITTEE
The ESG Committee oversees Bushveld’s ESG strategy and management
system, ESG risks that can affect the Company’s strategy and
performance, and the Company’s ESG disclosures.
For other relevant stakeholders and social partners, Bushveld Minerals
has developed a stakeholder engagement strategy. This provides a
blueprint for building collaborative relationships and forging meaningful
social compacts with host communities and various local, regional and
national stakeholders in support of our strategic objectives.
The ESG Committee’s members are David Noko (as Chair), Mirco
Bardella and Craig Coltman. The Committee had quarterly meetings.
More information and detail on this issue can be found in our
Sustainability Report.
DISCLOSURE COMMITTEE
The purpose of the Disclosure Committee is to oversee the
implementation of the governance and procedures associated with the
assessment, control and disclosure of inside information in relation to
the Company. The Committee meets on an ad hoc basis, as required,
and consists of the Chairs of each of the other Committees and the
Executive Directors. The chairmanship of the Committee rotates
between its independent members.
41
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW REPORT OF THE AUDIT COMMITTEE
The Audit Committee’s main function is to assist the Board of Directors
in the fulfilment of its responsibilities by overseeing key areas such
as financial reporting, regulatory compliance and risk management.
The Audit Committee’s work is essential to ensuring the effectiveness
of the Group’s internal controls and the integrity of the Group
financial statements.
This report provides details of the role of the Audit Committee and the
duties it undertook during the year under review.
The Audit Committee consisted of independent Non-Executive
Directors Mirco Bardella (Chairman) and Kevin Alcock. Mirco and Kevin
are both chartered accountants and bring a wealth of experience with
them, as set out in their biographical details on page 36.
The Audit Committee meets quarterly and at other appropriate times
in the financial reporting and audit cycle, if required. The Finance
Director, Company Secretary, Internal Auditor and External Auditor are
all invited to attend the meetings. Other individuals may be invited to
attend all or part of any meeting, as and when required. In fulfilling its
duties, due consideration is given to applicable laws and regulations,
the requirements of the AIM Rules, and the QCA Code, as appropriate.
The Chairman of the Committee reports formally to the Board of
Directors on all matters within its remit and how it has discharged
its responsibilities after each meeting.
Key duties of the Audit Committee include:
• Monitoring the integrity of the Group’s financial statements;
• Reviewing the consistency of, and any changes to, accounting
policies both on a year-on-year basis and across the Group
and reviewing whether management has followed appropriate
accounting standards and made appropriate estimates and
judgements, taking into account the views of the External Auditor;
• Reviewing and reporting to the Board of Directors on significant
financial reporting issues and judgements which they contain,
having regard to the matters communicated to it by the
External Auditor;
• Reviewing the Group’s internal financial controls, systems of internal
control, and risk;
• Reviewing the adequacy and security of the Group’s whistle-blowing
facilities and ensuring that appropriate investigations and follow-up
action is conducted in respect of concerns raised;
• Reviewing the adequacy of the Group’s systems, procedures and
controls for detecting fraud, bribery and corruption;
• Making recommendations to the Board of Directors on the
appointment of the External Auditor;
• Managing and overseeing the relationship with the External Auditors,
including their terms of engagement and remuneration; and
• Meeting regularly with the External Auditors and reviewing
their findings.
The Audit Committee evaluates its performance periodically and will
conduct an annual review of its constitution and terms of reference to
ensure it is operating at maximum effectiveness. Any changes arising
from these reviews are then recommended to the Board of Directors
for approval.
42
FINANCIAL REPORTING
The Audit Committee reviewed and assessed the Group’s
financial reporting in the period, including its interim report,
results announcements and this Annual Report. This review included:
an assessment of the consistency of, and changes to, accounting
policies, estimates and judgements; the methods used to account
for significant or unusual transactions; the appropriateness of the
accounting standards used; the clarity and completeness of disclosures
and the context in which statements are made; and a review of material
disclosures regarding audit and risk management in the Group
financial statements.
In reviewing the Group financial statements, the Audit Committee has
considered the Group’s accounting policies, particularly in relation to
the treatment of the accounting estimates and judgements as described
on page 77. The Audit Committee reviewed the impairment assessment
made by management on Vametco and Vanchem cash generating
units in accordance with the requirements of the relevant accounting
standards. The Audit Committee found the key judgements made by
management in assessing the recoverable amount to be reasonable
and the impairment loss recognised for the Vanchem cash generating
unit appropriate. The Audit Committee reviewed the impairment
assessment of the Mokopane Project. Further details provided in note
13 of the Group financial statements. The Audit Committee reviewed
the assessment of control over Vanchem and found the key judgements
made by management appropriate. The Audit Committee reviewed the
Group’s cashflow forecasts taking into account its financial position,
expected future performance of its operations, its debt facilities and
debt service requirements, its working capital requirements, capital
expenditure commitments and forecasts, expected proceeds from the
sale of Vanchem and Mokopane and the outstanding equity proceeds.
The Group continue to adopt the going concern basis in preparing the
financial statements. Further details have been provided in note 3 of
the Group financial statements.
In addition to the publicly-released reports, the Audit Committee’s
review covered management reports as well as reports from and
discussions with the External Auditor. The Audit Committee provided
comment and feedback on this Annual Report before finalisation
and approval. The review concluded that, taken as a whole, this
Annual Report is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the Group’s position,
performance, business model and strategy.
INTERNAL AUDIT
The scope of the Internal Audit function has been summarised as below:
• Provide independent and objective assurance through evaluating
the Group’s governance, risk and internal control systems;
• Evaluate the adequacy and effectiveness of internal financial
controls over financial reporting and internal controls in general; and
• Review the extent of compliance with laws, regulations, standards
and codes.
The Audit Committee is satisfied, having considered the assurance
provided by the Group Internal Audit, that no significant or material issues
have been identified that would render the Group’s system of internal
financial controls ineffective. Consequently, the Committee is of the
view that reasonable assurance was provided and the financial records
may be relied upon for the preparation of the Group financial statements.
Annual Report and Financial Results 2023 RISK MANAGEMENT AND INTERNAL CONTROL
The Audit Committee is mandated to provide oversight on the Group’s
governance, internal control and risk management systems. Internal
controls and risk management systems are in place to support the
integrity of the financial reporting process and the preparation of
accounts. These systems include policies and procedures to ensure
that adequate accounting records are maintained, and transactions
are recorded accurately and fairly, to permit the preparation of Group
financial statements in accordance with UK-adopted International
Accounting Standards.
The key elements of the Group’s system of internal controls
are discussed in this report.
The Group’s Senior Executive Management – the Executive Committee
– is responsible for managing and monitoring the risks under the
stewardship of the Group Head: Internal Audit and Risk and the Audit
Committee actively reviews the key risks and mitigating controls.
The Audit Committee’s review of the system of internal controls is
supplemented by reports from the internal and External Auditors
regarding issues identified during their engagement, particularly those
relating to control weaknesses and the responses from management.
Mirco Bardella
Chairman of the Audit Committee
28 June 2024
EXTERNAL AUDITOR
RSM UK Audit LLP (RSM) is the Group’s Auditor and the Audit
Committee has recommended to the Board of Directors that
shareholders be asked to approve the re-appointment of RSM
as auditor at the Annual General Meeting.
The Audit Committee discharged its duties in accordance with its terms
of reference during the period, including:
• Approving the engagement of the External Auditor, and reviewing
and approving the annual audit plan;
• Meeting regularly with the External Auditor;
• Reviewing the findings of the audit of the Group financial statements
for the year ended 31 December 2023 with the External Auditor;
• Reviewing the management representation letter requested
by the External Auditor before it was signed by management,
and management’s response to the Auditor’s findings and
recommendations; and
• Reviewing the effectiveness of the audit process.
In the current period, audit fees of US$545,000 were paid in respect
of audit procedures on the Group financial statements for the year
ended 31 December 2023.
NON-AUDIT SERVICES
A policy is in place to govern the supply of non-audit services by the
External Auditor, in order to safeguard independence and objectivity.
The policy sets out the recommended maximum fees that should
be payable for non-audit services as a percentage of the audit fee
and contains guidelines as to the circumstances where a proposed
engagement should be subject to a tender process. In the current
period, non-audit fees of £18,000 were paid in respect of agreed-upon
procedures on the interim financial statements for the period ended
30 June 2023.
WHISTLE-BLOWING
The Group has a Whistle-Blowing Policy, coupled with a whistle-
blowing reporting system (Bushveld Minerals – ethics and fraud
hotline), facilitated and managed by an independent external service
provider, Advance Call. The policy aims to encourage stakeholders
and employees to raise any suspected breaches, irregularities or
concerns, without fear of reprisal, and to provide a secure platform for
stakeholders and employees to anonymously raise suspected breaches
or concerns and to prompt management to investigate all the reported
cases. The policy commits the Group to treat all such disclosures made
in good faith, in a confidential and sensitive manner. The Group receives
reports regarding any allegations made, for investigations in line with
our Fraud Investigation Policy.
Ongoing communication and training are also offered to our employees
on the whistle-blowing line to create awareness, and to educate them
about the whistle-blowing process and associated policies.
A total of four (4) issues were reported through the whistle-blowing
hotline to date, of which all were reviewed and resolved.
43
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW 2023 REMUNERATION REPORT
PART ONE: BACKGROUND STATEMENT FROM THE
REMUNERATION COMMITTEE CHAIRMAN
Dear Shareholders,
As the Chairman of the Remuneration Committee at Bushveld Minerals,
I am pleased to present the Remuneration Report for FY2023. Despite
FY2023 being a difficult year for the Group, we remain committed to
fostering a culture of fairness, transparency, and accountability in the
remuneration practices within our organisation.
Our Committee is focused on ensuring that our remuneration policies
align with the Group’s strategic objectives. We prioritise a balanced
approach that considers both short-term performance incentives and
long-term value creation, encouraging alignment between the interests
of our executives and shareholders.
We are committed to adhering to best practices in corporate
governance, regularly reviewing and benchmarking our remuneration
structures against industry standards and regulatory requirements.
This ensures that our compensation packages remain competitive,
equitable, and in line with our performance expectations.
Our overarching goal is to cultivate a culture of performance
achievement, where remuneration reflects individual contributions
and drives collective success. Through transparent communication
and continuous evaluation, we aim to uphold the highest standards of
integrity and accountability in all aspects of our remuneration practices.
The remuneration outcomes for FY2023 are reflective of our
performance for the year under review:
The outgoing CEO and Finance Director (“FD”) received fixed pay for
the periods that they were in employment. No bonuses were awarded
to the CEO and FD or to any other staff members that were eligible to
participate in the 2023 bonus scheme. The 2022 long-term incentives
awards were approved in November 2022 and issued to employees
in 2023. No employees received new long-term incentives for 2023.
Unvested long-term incentive performance awards held by the CEO
and FD were treated in accordance with the plan rules and unvested
deferred bonus awards have been forfeited. Lastly, no fee adjustments
were made to Non-Executive Director fees.
ROLE OF THE COMMITTEE AND KEY DECISIONS TAKEN
The Committee was established by the Bushveld Minerals Board. The
Committee’s main purpose is to ensure that the remuneration policies,
frameworks and practices are aligned with the Company’s strategy,
objectives and values in order to drive long-term shareholder value.
The Committee is responsible for and oversees the governance of
all Group remuneration matters. It is specifically responsible for
determining the individual remuneration of Directors (Executive and
Non-Executive) and Senior Executives. In all compensation matters,
the Committee retains full discretion to amend pay outcomes in
light of performance and reasonableness. In order to discharge its
responsibility, the Committee is required to:
• Oversee the establishment of a Remuneration Policy that will
promote the achievement of strategic objectives, encourage
individual performance and support Bushveld’s long-term interests.
The final approval of the Policy rests with the Board.
• Determine the remuneration framework applicable to Executives
of Bushveld Minerals.
• Review the Group’s remuneration strategy and its implementation
on an annual basis.
In the 2023 financial period, the Committee executed on their various
duties as set out in the Committee’s terms of reference, including:
• Review of the Group’s pay scales.
• Review of the short-term incentive (“STI”) policy.
• Review and approval of the STI performance conditions for FY2024
(Group companies).
• Review of the STI performance outcomes for FY2023 which resulted
in the payment of no bonuses.
• Approval of salary increases and adjustments for Executives,
management, and employees.
• Appointment of the Remuneration Advisor for a further three years.
In order to incentivise key staff during this critical turnaround period
for the Company, certain revisions to the STI scheme have been made
in the short term, particularly in relation to achievement of positive
EBITDA as a financial measure for the group after a number of loss
making years. The conventional LTI scheme has been suspended whilst
these short term revisions to the STI remain in place. Additionally, the
Remuneration Committee is currently considering a retention scheme
to retain key staff over the next critical period.
SHAREHOLDER ENGAGEMENT
When the shareholder register reflects more institutional shareholders,
the Group will engage to obtain views and comments on remuneration
policy and its implementation. For the time being, the Committee will
respond to any inward enquiries relating to this report.
44
Annual Report and Financial Results 2023 FUTURE FOCUS AREAS
• Evaluating the effectiveness of performance metrics used in
incentive plans to ensure they are challenging, relevant, and
conducive to driving stability and sustainable long-term growth.
• Assessing the design and structure of short-term and long-term
incentive plans to ensure they motivate Executives and employees
to achieve strategic objectives and create shareholder value.
• Supporting talent development initiatives to cultivate a pipeline
of skilled Executives and employees capable of driving the
Company’s long-term success.
• Communicating the rationale behind remuneration-related decisions
to stakeholders.
In FY2024, the focus is to continue embedding and strengthening
the Group’s remuneration and performance philosophy into the wider
people management framework. This includes:
• Reviewing the existing performance management framework.
• Considering the introduction of a total reward statement for
employees to better explain our employee value proposition.
• Monitor the implementation of the Interim Incentive for 2024
that will address the Group’s short-term strategic objectives,
while addressing the retention of key and critical employees
for the achievement of the Group’s long-term objectives.
REMUNERATION ADVISORS
The Committee used the services of PricewaterhouseCoopers (“PwC”),
an independent professional services firm with a global remuneration
practice, to act as independent advisors to the Committee. The
Committee is satisfied that they act independently.
We encourage and pursue open and regular dialogues with all our
stakeholders. Constructive input is valued and appreciated as we
continue to improve the remuneration system.
On behalf of the Committee, I thank you for your continued support
and feedback regarding our remuneration framework.
Kevin Alcock
Chairman of the Remuneration Committee
28 June 2024
45
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW 2023 REMUNERATION REPORT CONTINUED
PART TWO: REMUNERATION POLICY
GENERAL REMUNERATION POLICY
The Group Remuneration Policy seeks to enable Bushveld Minerals to attract, motivate and retain high-performing individuals.
It guides decision-making in relation to all aspects of remuneration and supports the execution of strategic deliverables, as expressed
in the Group’s performance framework.
The Committee aims for the Policy to be rolled-out to all subsidiaries where applicable and necessary, taking into account existing contractual
obligations and terms and conditions of employment. The Remuneration Policy follows the general principles of the Quoted Companies Alliance
(“QCA”) Code and is anchored on the following remuneration philosophy statements and principles:
Total guaranteed remuneration
is primarily set between the
lower quartile and the median
in the relevant market.
Incentive-based rewards
are earned by achieving
stretch performance
conditions consistent
with shareholder
interests over the
short, medium and
long term.
STIs relate to financial
and ESG measures.
LTIs include measures
of free cash flow margin
and total shareholder
return.
ENCOURAGE
A CULTURE THAT
SUPPORTS SUSTAINABLE
AND ENTREPRENEURIAL
BUSINESS GROWTH.
PROMOTE
THE ACHIEVEMENT
OF STRATEGIC
OBJECTIVES WITHIN
THE ORGANISATION’S
RISK APPETITE.
PROMOTE POSITIVE
OUTCOMES ACROSS
THE ECONOMIC, SOCIAL
AND ENVIRONMENTAL
CONTEXT IN WHICH THE
GROUP OPERATES.
PROMOTE A CULTURE
OF RESPONSIBLE
CORPORATE CITIZENSHIP.
Remuneration practices
are aligned with
corporate strategy.
Incentive plans, performance
measures and targets
are structured to operate
effectively throughout the
business cycle and include
an overall cap.
Remuneration is aimed at
being fair and responsible.
The Remuneration Policy,
principles and benchmarking
approaches will be
transparent.
The design of long-term
incentives is prudent and does
not expose shareholders to
unreasonable financial risk.
FAIR AND RESPONSIBLE REMUNERATION
The Committee’s stance is that “fair” remuneration is impartial and free from discrimination. It is also free from self-interest, prejudice or
favouritism. “Fair” does not mean “the same” and remuneration levels will differ according to a number of factors, such as productivity,
performance, skill, experience, risk and complexity, degree of challenge, level of responsibility of decision making, and consequence and impact
on the organisation. Equal contributions to performance should, however, be rewarded equally. The Company’s policy on fair and responsible
remuneration can be summarised as follows:
• All variable pay is subject to the achievement of performance metrics, carefully calibrated and approved by the Committee, ensuring a close
alignment with shareholder value creation over the performance period.
• Although remuneration is benchmarked, affordability is a key consideration when making pay adjustments. Variable pay is subject to reduction
(malus) and recoup (claw-back). Executives are also expected to build and maintain a minimum shareholding in the Company.
• Job profiles are in place for all roles within the organisation. Jobs are evaluated in accordance with a robust methodology and employees are
remunerated in accordance with the determined pay scales.
• The Group is committed to eliminating any unfair or unjustified differentiation within its remuneration implementation.
• Horizontal fairness is applied and employees performing the same or similar job requirements at the same or similar level of performance
receive similar remuneration, aligned to the Group pay scale.
• Vertical fairness is applied by assessing the pay ratio between the CEO and the pay levels of employees below the executive level – this is
monitored by way of tools such as the Gini coefficient.
• Pay is well administered, with employees paid accurately, on time and in a way that is convenient.
46
Annual Report and Financial Results 2023 ELEMENTS OF REMUNERATION
The Bushveld Minerals remuneration structure is made up of a combination of fixed and variable pay. The fixed pay component is referred to as the
total guaranteed pay (“TGP”) and the variable component includes the Group’s STIs and LTIs. As mentioned above, during 2024 no participation
will be offered in the normal STI and LTI programmes.
Below is a summary of the Policy as it applies to designated employees in the organisation (exclusions as explained above):
TOTAL GUARANTEED PAY, COMPRISING FIXED CASH SALARY PLUS BENEFITS
The main objective of the TGP is to provide individuals with a fixed income, priced in line with the market and aligned with the job that they do.
TGP consists of a cash package and benefits which include a Medical Aid, Retirement Fund, Group Life Cover, Disability Benefit and Death-
in-Service-Benefit. Our Policy is to set TGP for all levels of staff between the lower quartile and median of the market, while the total package
opportunity (inclusive of incentives) is set at the median or above of the market, in the case of the achievement of stretched targets, subject
to the Group’s discretion which will consider, among other factors, business needs to attract scarce skills to the Company.
For Executives, the benchmark is derived from a mix of foreign- and South African-listed companies with a similar profile to that of Bushveld
Minerals. Other employees are benchmarked against the mining circle of the REMchannel® remuneration survey.
Ordinarily, distribution of increases to employees outside the bargaining forums is done with reference to individual performance, inflation,
internal equity, competence and potential.
2024 INTERIM INCENTIVE
OVERVIEW
The objective of the Interim Incentive is to create a simplified incentive, considering softened financial targets to incentivise and retain employees
in the short to medium term while the Company recovers. The plan uses the normal STI scorecard that was used in the past, but EBITDA is set as
the financial measure (the detailed scorecard is disclosed below).
The Interim Incentive is proposed for the FY2024 performance period only. The full award will be settled in shares, subject to the following provisions:
• No more than 1.5% of the share capital of the Company can be used in settlement of the plan.
• The incentive will be delivered in three equal tranches at six-monthly intervals on 30 June 2025, 31 December 2025, and 30 June 2026.
Good leaver principles will be applied for employees on separation.
47
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW 2023 REMUNERATION REPORT CONTINUED
PART TWO: REMUNERATION POLICY CONTINUED
2024 SCORECARD
The following Group financial and non-financial targets will apply for the year:
FINANCIAL MEASURES: 70% weighted score
KPI
EBITDA
Threshold
On target
EBITDA
US$1.0 million
EBITDA
US$1.5 million
NON FINANCIAL MEASURES: 30% weighted score
Stretch
EBITDA
US$3.0 million
Compliance to IFC Environmental
and Social Performance Standards
n/a
100%
n/a
Total Recordable Injury Frequency
Rate (“TRIFR”)
≥2.5% performance
improvement
≥5% performance
improvement
≥10% performance
improvement
Lost time injury
New occupational disease cases
(No)
6
6
4
4
2
2
ISO 45001 Certification
Gap Audit (Stage 1)
Certified
Certified
Significant environmental incidents
Major environmental incidents
Environmental non-compliance
fines/directives
8
2
2
6
1
1
4
0
0
Environmental authorisations
80%
90%
100%
ISO 14001 certifications
(Vametco)/ISO 9001 accreditation
(Vanchem)
Retained with more
than five minor
non-conformances
Retained with less
than five minor
non-conformances
Retained with less
than three minor
non-conformances
Key performance area Weighting
Consolidated
economic profit
100%
Comprehensive
ESG
20%
100%
Occupational
health and
safety
Environment
Social licence
to operate
25%
30%
30%
20%
20%
20%
20%
20%
20%
20%
20%
20%
100% Acquire and maintain social licence
to operate
Compliance to
applicable regulatory
frameworks (MCII,
B-BBEE and DTI
Codes, etc)
Additional: Adherence
to MCIII plan milestones
and improvement on
previous year ratings on
DTI Scorecards
Additional: Effective cross-
functional internal forums
such as sustainability forums,
future forums transformational
forums inclusive of all
Business Unit Management,
Finance, Procurement, HR
and Stakeholder Engagement
Governance
15%
40%
40%
20%
TOTAL
100%
KPI/Performance contracts
in place
85% KPI/Performance
contracts in place
100% KPI/Performance
contracts in place
Retention of key/critical skills 35% retention of key/
critical skills
50% retention of key/
critical skills
70% KPI/Performance
contracts in place
75% retention of key/
critical skills
Employee engagement
(embedding of culture, values, and
engagement of our employees)
40% participation rate
55% participation rate
75% participation rate
THE CONVENTIONAL INCENTIVES
The conventional incentives will not be used in 2024 but are summarised below, should the Company elect to reintroduce these in subsequent years.
SHORT-TERM INCENTIVES
Middle management employees and above participate in the STI. Monthly cash production bonuses are in place for employees represented in the
bargaining counsel. The STI takes the form of a bottom-up structure, determined as the sum of business and personal performance and calculated as:
Qualifying Annual TGP x On-Target Incentive Percentage x {(Personal Score x Personal Weighting) + (Business Score x Business Weighting)}.
48
Annual Report and Financial Results 2023 EARNING POTENTIAL
The on-target incentive percentages are determined per grade and expressed as a percentage of an employee’s qualifying TGP and relates to
the potential STI that can be earned should on-target performance be achieved for the performance period. Current on-target cash STI is 45%
of TGP for the CEO and CFO.
WEIGHTINGS AND PERFORMANCE MEASURES
A combination of business (using a combination of financial and non-financial measures) and personal measures are used, each with an assigned
weighting depending on seniority. Executive performance is heavily weighted toward business performance, to ensure Executive and shareholder
alignment. The CEO and CFO’s performance is weighted 80% towards business measures and 20% towards personal measures. The applicable
targets are disclosed below.
As a result of the volatility in the market of the vanadium price and exchange rate, the Committee implemented a collar and cap approach for
the “consolidated economic profit” target. The intention of the collar and cap on the vanadium price and foreign exchange rate is to ensure that
management is partially insulated from factors that are beyond their control on both the upside and downside.
The personal score (with a 20% weighting) ranges between zero percent and 150% and will be dependent on the personal performance rating of
the employee for the relevant financial year. A personal score below threshold acts as a gatekeeper, which means even if the business score was
achieved, a participant with a personal score below threshold will not qualify for any bonus.
GATEKEEPER PROVISIONS
Payment of any STI is subject to the gatekeeper conditions which will result in no bonus being paid if:
•
•
• payment or settlement of the bonus will cause the Company to breach debt covenants; or
• payment or settlement of the bonus places the Company in financial distress.
the gatekeepers or any one of the following gatekeepers are not met; or
the Company is in a loss-making position; or
Due to the current financial situation, the Company’s STI awards as stated above have been amended to meet the objectives of the interim
turnaround incentive.
LONG-TERM INCENTIVES
PERFORMANCE AWARDS
The Company makes use of a conditional share plan (“CSP”) which grants performance awards. Eligible employees (middle management and
above) may receive performance awards which are subject to forward-looking Company performance conditions, measured over a three-year
performance period. Awards will vest subject to the achievement of the performance measures and continued employment for the duration of
the vesting period. However, due to the current financial situation, the LTI awards are put on hold until further notice.
The Company voluntarily imposed a dilution limit for the CSP: up to five percent of the issued share capital can be issued in settlement of awards
granted under the CSP. When required under listing rules, the Company would seek to formalise the limit in a general meeting.
MATCHING AWARDS
The incoming CEO is encouraged to build up a shareholding in the Company and is expected to purchase shares up to 100% of his fixed pay which
the Company will match on a 1:1 basis. The company matching portion is limited to 100% (£350,000) of his fixed pay. His own purchased portion
and the company matching portion will equate to 200% of his fixed pay, which is equal to the minimum shareholding requirement (“MSR”) target
that has been set for the CEO role. The matching shares will be awarded within 42 days of the FY end results announcement and will be fully vested
immediately. In FY 2023, Craig Coltman purchased 833,333 shares as part of the December 2023 Capital Raise.
FURTHER DETAILS RELATING TO EXECUTIVES AND DIRECTORS
To ensure further shareholder alignment, Executives are required to build up and maintain a percentage of their TGP in unencumbered Company
shares over a three-year period from date of implementation of the policy, or appointment. This shareholding can be built up as desired by
Executives. Any existing shareholding, as well as vested CSP shares (including those that are subject to the holding period), will be taken into
consideration when calculating the shareholding percentage.
The required shareholding levels, as a percentage of TGP (before tax) are as follows:
Chief Executive Officer (CEO) 200%
Chief Financial Officer (CFO) 175%
150%
Other Executives
49
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
2023 REMUNERATION REPORT CONTINUED
PART TWO: REMUNERATION POLICY CONTINUED
MALUS AND CLAW-BACK POLICY
Variable remuneration is subject to malus and claw-back. The purpose of this policy is to give the Board the discretion to recoup vested, settled
and/or paid incentives (also referred to as “claw-back”) and to reduce and cancel any unvested and/or unpaid incentive remuneration (also referred
to as “malus”) when trigger event(s) occur.
The policy may be implemented by the Board where there were material misstatements of financial results or other calculation errors that resulted in
the overpayment of incentives and gross misconduct on the part of the employee leading to dismissal. The policy applies to all variable pay as follows:
• Malus can apply at any time before vesting and settlement of the awards. Unvested STI bonus shares and unvested LTIs are subject to malus as
a pre-vesting forfeiture provision;
• Vested STI bonus shares and 50% of vested LTIs may be subject to claw-back as a post-vesting recoupment of paid/settled and vested
incentives; and
• LTIs that are subject to a holding period will be subject to claw-back as follows: 25% can be clawed back after a one-year period post vesting
and settlement, and the remaining 25% after a two-year period post vesting.
TERMINATION OF EMPLOYMENT
All newly appointed Executives’ contracts include a six-month restraint of trade period. The STI and LTI make a distinction between fault and
no-fault terminations as follows:
Reason for termination of employment
Treatment of incentives
Fault termination (resignation and dismissal)
The incentive is forfeited
No-fault termination (termination due to death, ill health,
disability, retrenchment, sale of an employer, retirement)
A pro-rata portion of the incentive is received, based on the number of complete months
in service, and adjusted for performance. The unvested or unpaid portion will lapse
NON-EXECUTIVE DIRECTOR FEES
Non-Executive Directors are appointed to the Bushveld Minerals Group based on their ability to contribute meaningfully to assist the Group to set
and achieve its objectives based on their competence, insights, and experience. Consequently, fees are set at levels to attract and retain the calibre
of Directors necessary to contribute to a highly effective Board.
Non-Executive Directors do not participate in either the STI or LTI. No arrangements exist for compensation in respect of loss of office. The
aggregate fees of all Directors shall not exceed £500,000 (US$609,459) per annum, or such higher amount as may be determined by ordinary
resolution (excluding amounts payable under any other provisions of the Articles). The fees paid to Non-Executive Directors did not exceed the
above threshold in the year under review.
The current approved fee structure was as follows:
Board Position
Chairman
Non-Executive Director
Senior Non-Executive Director
2022 Annual fee – US$
2023 Annual fee – US$
92,848
49,519
61,898
93,233
49,724
62,155
Board Committee Chairperson
2022 Annual fee – US$
2023 Annual fee – US$
Remuneration Committee
Audit Committee
Nominations Committee
Environmental, Social and Governance (ESG) Committee
Disclosure Committee
6,190
6,190
3,095
6,190
–
6,216
6,216
3,108
6,216
–
50
Annual Report and Financial Results 2023 PART THREE: REMUNERATION IMPLEMENTATION REPORT
REMUNERATION PAID TO EXECUTIVE DIRECTORS DURING THE YEAR: SINGLE FIGURE OF REMUNERATION TABLE
The Company’s increase cycle has been changed to allow for the finalisation of the financial results prior to increases being awarded. Increases will,
therefore, be made in July of 2024 and reported retrospectively in the 2024 Annual Report. Similar to FY2022, no cash STI was payable for FY2023.
Name
Executive Directors
F. Mojapelo4
C. Coltman
T. Chikanza5
Year
Guaranteed pay
US$
Benefits
US$
STI2
US$
LTI Reflected3
US$
Other
US$
Total single figure
of Remuneration
US$
2023
2022
2023
2022
2023
2022
347,523
374,280
167,912
–
270,882
280,647
–
–
–
–
–
–
–
–
351,6494
–
–
–
699,172
374,280
167,912
13,923
–
284,805
280,647
–
–
–
–
–
1 All amounts for the 2023 single figure disclosure were converted to US$ using the average exchange rate of 18,4621 for the 2023 financial year (2022: 16,32).
2 No cash STI were earned in relation to the 2023 financial year.
3 No bonus shares were earned in relation to the 2023 financial year and any performance awards with a performance period ended in 2023 did not vest.
4 Other payments for F. Mojapelo relates to separation agreement in terms of a six-month exit payment per his employment contract together with the write-off of the loan that was made to him at the
end of February 2021 to cover his tax liability on shares previously awarded. F. Mojapelo left the employ of the Company on 30 June 2023. The guaranteed pay disclosed is reflective of this period.
5 Other payments for T. Chikanza relate to accrued leave paid out in February 2024.
TABLE OF UNVESTED AWARDS
Names
Award
date
Vesting
date
Executive directors
Opening
balance
on 1 Jan
2022
Granted
during
2022
Forfeited
during
2022
Settled
during
2022
Closing
balance on
31 Dec
2022
Cash
value of
receipts
2022
(US$)1
Estimated
closing
fair value
on 31 Dec
2022
(US$)2
Granted
during
2023
Forfeited
during
20231
Settled
during
2023
Cash
value of
receipts
2023
(US$)1
Estimated
closing
fair value
on 31 Dec
2023
(US$)
Closing
balance
on 31 Dec
2023
F Mojapelo
CSP awards:
Performance
share award
Performance
share award
Oct–19
Oct–22
678,572
–
678,572
Nov–22
May–25
– 1,573,556
Bonus share
award
Jul–20
Bonus share
award
Jul–21
50% in Dec 2020
and 50% in
June 2021
75% in Dec 2021
and 25% in
June 2022
–
827,850
–
–
T Chikanza
CSP awards:
Performance
share award
Nov–22
May–25
– 1,179,877
Bonus share
award
Jul–21
75% in Dec 2021
and 25% in
June 2022
623,838
–
1 The performance share awards were forfeited.
2 The bonus share awards lapsed and been forfeited.
–
–
–
–
–
–
–
–
–
–
–
1,573,556
–
93,217
– 1,573 556
–
–
–
–
–
–
–
827,850
–
49,041
–
827,850
1,179,877
–
69,895
– 1,179,877
623,838
–
36,956
–
623,838
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
NON-EXECUTIVE DIRECTOR FEES PAID DURING THE YEAR
The fees paid during 2023 compared to 2022 are disclosed below.
Non-Executive Directors Fees
Michael Kirkwood
David Noko
Kevin Alcock
Mirco Bardella
Board
93,233
49,724
49,724
49,724
2023 Fees received by Non-Executive Directors (US$)
Remuneration
Committee Chair
Audit Committee
Chair
Nomination
Committee Chair
ESG Committee
Chair
Total Fees
received 2023
Total Fees
received 2022
6,216
6,216
3,108
6,216
96,341
55,940
55,940
55,940
71,373
33,425
47,043
48,281
51
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW DIRECTORS’ REPORT
The Directors of Bushveld Minerals Limited hereby present their Report
together with the consolidated financial statements for the year ended
31 December 2023.
PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND FUTURE
DEVELOPMENTS
Bushveld Minerals is a primary vanadium producer. It is one of only
three primary vanadium producers, offering compelling exposure to
vanadium through its upstream assets. Reviews of the Group’s financial
and operational performance and future developments are provided in
the Chairman’s Statement, Chief Executive Officer’s Review, and the
Chief Financial Officer’s Review.
RESULTS AND DIVIDEND
The Group’s results show a net loss before tax for the year of
US$105.0 million. Consequently, the Directors will not be
recommending the declaration of a dividend.
SHARE CAPITAL AND FUNDING
Full details of the authorised and issued share capital, together with
details of the movements in the Company’s issued share capital during
the year, are shown on page 87 of the Group financial statements. The
Company has one class of ordinary shares which carry no right to fixed
income. Each share carries the right to one vote at general meetings of
the Company.
DIRECTORS
The Directors who served the Company during the year and to date
are as follows:
Craig Coltman
Michael J. Kirkwood
Chief Executive Officer
(appointed 1 July 2023)
Chairman and Independent
Non-Executive Director
DIRECTORS’ INDEMNITY INSURANCE
The Group has maintained insurance throughout the year for its
Directors and Officers against the consequences of actions brought
against them in relation to their duties for the Group.
EMPLOYEE INVOLVEMENT POLICIES
The Group places considerable value on the awareness and
involvement of its employees in the Group’s activities. Within the
bounds of commercial confidentiality, information is disseminated
to all levels of staff about matters that affect the progress of the Group,
and that are of interest and concern to them as employees.
RELATED PARTY TRANSACTIONS
Details of related party transactions are detailed in note 35 of the Group
financial statements.
EVENTS AFTER THE REPORTING DATE
Events after the reporting date are detailed in note 36 of the Group
financial statements.
AUDITOR
The Company’s Auditor is RSM UK Audit LLP.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR
The Directors who were in office on the date of approval of these
financial statements have confirmed that, as far as they are aware,
there is no relevant audit information of which the auditor is unaware.
Each of the Directors has confirmed that they have taken all the steps
that they ought to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that it has been
communicated to the Auditor.
By order of the Board.
Kevin Alcock
Independent Non-Executive Director
Mirco Bardella
Independent Non-Executive Director
David Noko
Independent Non-Executive Director
K Bredin
Company Secretary
28 June 2024
Fortune Mojapelo
Tanya Chikanza
Chief Executive Officer
(resigned 30 June 2023)
Finance Director
(resigned 31 January 2024)
DIRECTORS’ INTERESTS
The Directors’ beneficial interests in the shares of the Company at
28 June 2024 were:
Craig Coltman
Michael Kirkwood
Kevin Alcock*
Ordinary shares of
1p each
28 June 2024
Ordinary shares of
1p each
31 December 2022
833,333
500,000
–
300,000
4,760,809
3,035,809
*
1,551,640 of these shares are held directly by Kevin Alcock, while 3,209,169 are
held by the Alcock Family Trust, which is deemed to be a person closely associated
with Kevin Alcock.
52
Annual Report and Financial Results 2023 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Group financial statements in accordance with applicable law and regulations.
Guernsey company law requires the Directors to prepare Group financial statements for each financial year in accordance with generally-accepted
accounting principles. The Directors are required by the AIM Rules of the London Stock Exchange and have elected under Guernsey company law
to prepare Group financial statements in accordance with UK-adopted International Accounting Standards.
The financial statements of the Group are required by law to give a true and fair view of the state of the Group’s affairs at the end of the financial
period and of the profit or loss of the Group for that period and are required by UK-adopted International Accounting Standards to present fairly
the financial position and performance of the Group.
In preparing the Group financial statements, the Directors should:
(i) Select suitable accounting policies and apply them consistently;
(ii) Make judgements and accounting estimates that are reasonable and prudent;
(iii) State whether they have been prepared in accordance with UK-adopted International Accounting Standards; and
(iv)
Prepare the Group financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions, and
disclose with reasonable accuracy, at any time, the financial position of the Group and enable them to ensure that the Group financial statements
comply with the requirements of the Companies (Guernsey) Law 2008. The Directors are also responsible for safeguarding the assets of the Group
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website.
Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Directors confirm they have discharged their responsibilities as noted above.
53
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW FINANCIAL STATEMENTS
Financial
statements
CONTENTS
Independent Auditor’s Report
56
63 Consolidated Statement of Profit or Loss
64 Consolidated Statement of Comprehensive Loss
65 Consolidated Statement of Financial Position
66 Consolidated Statement of Changes in Equity
67 Consolidated Statement of Cash Flows
68 Notes to the Consolidated Financial Statements
54
Annual Report and Financial Results 2023 55
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BUSHVELD MINERALS LIMITED
OPINION
We have audited the financial statements of Bushveld Minerals Limited and its subsidiaries (the “Group”) for the year ended 31 December 2023,
which comprise the Consolidated Statement of Profit or Loss, Consolidated Statement of Comprehensive Loss, Consolidated Statement of Financial
Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted
International Accounting Standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 December 2023 and of the Group’s loss for the year then ended;
• are in accordance with UK-adopted International Accounting Standards; and
• comply with the requirements of The Companies (Guernsey) Law, 2008.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent
of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
MATERIAL UNCERTAINTY RELATED TO GOING CONCERN
We draw attention to note 3 on page 69 in the financial statements, which indicates that the Group’s ability to continue as a going concern is
dependent on its ability to complete the sale of Vanchem and the Mokopane mining rights, complete the refinance of the Orion senior term loan,
the timings of the receipts of these transactions, the continuing support of Orion, and achieving the planned production levels at the estimated
average sales prices.
As stated in note 3, these events or conditions, along with the other matters as set forth in note 3, indicate that material uncertainties exist that may
cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group’s ability to continue to adopt the going concern basis
of accounting included:
• Reviewing the cash flow forecasts of the Group and challenging the assumptions made by management;
• Consideration of the impact of delays and/or non-receipt of cash flows due to the group in respect of asset disposals and planned financing;
• Obtaining management’s sensitivity analysis and assessing the impact of changes in sales price and production levels; and
• Reviewing the accuracy and completeness of disclosures in the financial statements.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
SUMMARY OF OUR AUDIT APPROACH
Key audit matters
Group
Investment by Southern Point Resources
Materiality
Group
• Overall materiality: US$2,790,000 (2022; US$1,850,000)
• Performance materiality: US$2,090,000 (2022: US$1,390,000)
Scope
Our audit procedures covered 100% of revenue, 96% of total assets and 95% of loss before tax
56
Annual Report and Financial Results 2023 KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group Financial Statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including
those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the Group Financial Statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below
to be the key audit matters to be communicated in our report.
INVESTMENT BY SOUTHERN POINT RESOURCES
Key audit matter
description
In September 2023 the Group entered into an agreement with Southern Point Resources (“SPR”) which included the
proposed sale of 50% of a subsidiary undertaking, Bushveld Vanchem (Pty) Limited (“Vanchem”) for a consideration
of US$20 million to US$21.3 million, the proposed sale of the mining rights to Mokopane for US$3.7 million and an equity
investment into the parent entity of US$12.5 million.
This is a key audit matter because the disposals are significant assets of the Group. The main impacts on our audit were:
THE ASSESSMENT OF CONTROL OVER VANCHEM POST DISPOSAL
As disclosed in the uses of estimates and judgements note on page 78, the Directors have determined that the Group
will continue to control Vanchem subsequent to the 50% disposal (which had not occurred at the reporting date).
Therefore, the assets and liabilities of Vanchem are fully consolidated into the financial statements at the reporting date
and have not been presented as held for sale. Furthermore, the Directors have determined that the decision to sell 100%
of Vanchem, subsequent to the reporting date (as disclosed in note 36), doesn’t alter this assessment.
IMPAIRMENT OF THE VANCHEM CASH GENERATING UNIT (“VANCHEM CGU”)
The agreed sale price of US$20 million to US$21.3 million for 50% of Vanchem gave rise to an implied fair value of the
Vanchem CGU of between US$40 million and US$42.6 million, less estimated costs of disposal.
As disclosed in the uses of estimates and judgements note on page 77, the Directors have determined that the
impairment charge should be based on the minimum sales price of US$20 million, as the additional payment of
US$1.3 million is dependent on completion of the Mokopane mining rights sale. Accordingly, an impairment charge
of US$8.2 million has been recognised in respect of Vanchem as disclosed in note 14.
Additionally, the Directors have determined that the agreement to dispose of the remaining 50% of Vanchem, subsequent
to the reporting date, for an undiscounted sales price of between US$15 million and US$20 million, does not alter this
valuation.
Furthermore, the Directors determined that the agreed sales price reflected fair value as:
a) the equity subscription by SPR, at a price of 3p per share, was at an equivalent price to that payable by other investors
at a similar date (therefore the premium payable over the prevailing share price at the time of the share issue did not
represent additional consideration for the disposals of Vanchem or Mokopane); and
b) the completion of the sales of Vanchem and Mokopane are not dependent upon each other.
IMPAIRMENT OF THE MOKOPANE EXPLORATION ASSET AND ITS PRESENTATION AS A HELD FOR SALE ASSET
As disclosed in note 13, the Group has recognised an impairment loss of US$49.6 million in respect of its Vanadium and
Iron Ore Intangible Asset (“Mokopane”).
It has been reclassified as an “Asset held for sale” in the balance sheet, at its fair value less costs to sell of US$3.7 million.
The Directors were required to determine whether the criteria for recognition of the asset as held for sale were met at the
reporting date and whether the impairment value charge was appropriately recognised.
57
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BUSHVELD MINERALS LIMITED CONTINUED
How the matter was
addressed in the audit
Our audit work included the following procedures:
THE ASSESSMENT OF CONTROL OVER VANCHEM POST DISPOSAL
• We obtained management’s accounting memorandum and challenged them on key terms of the agreement,
in particular the significance of the Chairman’s casting vote and how the Chairman is appointed.
• We considered whether the decision to sell 100% of Vanchem, subsequent to the reporting date, was a non-adjusting
post balance sheet, thereby not impacting the assessment.
• We reviewed the disclosures made in the estimates and judgements note and challenged Management on whether
they were accurate and complete and provided sufficient information in order to understand the significance of the
judgements made.
IMPAIRMENT THE OF VANCHEM CGU
• We obtained management’s accounting paper and reviewed their impairment calculation to check it had been
calculated correctly.
• We challenged Management on the appropriate sales price upon which to base the implied fair value of Vanchem.
In particular, we considered whether:
– the additional consideration of US$1.3 million, to be paid on completion of the Mokopane sale, should be included
as consideration for this purpose;
– the subsequent sale of the remaining 50% of Vanchem, for a lower range of consideration (being an undiscounted
amount of US$15 million to US$20 million), was indicative of a lower fair value (and hence higher impairment charge);
– the subscription price of 3p payable by SPR, representing a premium over the prevailing share price, should be
considered additional consideration for the Vanchem or Mokopane assets; and
– the completion of the sales of Vanchem and Mokopane are independent of each other.
• We reviewed the disclosures in the financial statements to assess whether they were accurate and complete.
IMPAIRMENT OF THE MOKOPANE EXPLORATION ASSET AND ITS PRESENTATION AS A HELD FOR SALE ASSET
• We obtained management’s accounting paper and reviewed their impairment calculation to check it had been
calculated correctly.
• We challenged management on whether the criteria to reclassify the asset as held for sale were met at the reporting date.
• We considered whether US$3.7 million was an appropriate carrying value of the asset and therefore that it was
•
appropriate to recognise the impairment charge of US$49.6 million calculated by management.
In particular, we considered whether:
– the subscription price of 3p payable by SPR, representing a premium over the prevailing share price, should be
considered additional consideration for the Vanchem or Mokopane assets; and
– the completion of the sales of Vanchem and Mokopane are independent of each other.
• We reviewed the disclosures made in the financial statements to assess whether they were accurate and complete.
OUR APPLICATION OF MATERIALITY
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit
procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a whole, could reasonably
influence the economic decisions of the users we take into account the qualitative nature and the size of the misstatements. Based on our
professional judgement, we determined materiality as follows:
Group
Overall materiality
US$2,790,000 (2022; US$1,850,000)
Basis for determining
overall materiality
5% of results before tax averaged over the past three years
Rationale for
benchmark applied
As a listed entity, result before tax is considered to be the most appropriate benchmark for users of the financial
statements. A three-year average is appropriate given the volatility caused by the vanadium price.
Performance materiality
US$2,090,000 (2022: US$1,390,000)
Basis for determining
performance materiality
75% of overall materiality
Reporting of misstatements
to the Audit Committee
Misstatements in excess of US$139,000 and misstatements below that threshold that, in our view, warranted
reporting on qualitative grounds.
58
Annual Report and Financial Results 2023
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The Group consists of 17 components, primarily located in Guernsey and South Africa. There are also operations of insignificant components
in Mauritius, Madagascar, United States of America and the United Kingdom.
The coverage achieved by our audit procedures was:
Full scope audit
Specific audit procedures
Total
Number of
components
Revenue
Total assets
Loss before tax
4
1
5
100%
0%
100%
86%
10%
96%
95%
0%
95%
Analytical procedures at Group level were performed for the remaining 12 components.
Of the above, full scope audits for two components and specific audit procedures for one component were undertaken by component auditors.
The specific audit procedures were undertaken in respect of property, plant and equipment, due to their significance to the total assets of the Group.
OTHER INFORMATION
The other information comprises the information included in the Annual Report, other than the financial statements and our Auditor’s Report
thereon. The Directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements
does not cover the other information and we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where The Companies (Guernsey) Law 2008 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the parent company; or
•
• we have failed to obtain all the information and explanations which, to the best of our knowledge and belief, are necessary for the purposes
the financial statements are not in agreement with the accounting records; or
of our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement set out on page 53, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
59
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BUSHVELD MINERALS LIMITED CONTINUED
THE EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit
evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in
the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have
a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations
identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to
fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and
implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity’s operations
are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the Group audit engagement team and
component auditors:
• obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks, that the Group operates
•
in and how the Group is complying with the legal and regulatory frameworks;
inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities,
including any known actual, suspected or alleged instances of fraud;
• discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the
financial statements may be susceptible to fraud.
All relevant laws and regulations identified at a Group level and areas susceptible to fraud that could have a material effect on the consolidated
financial statements were communicated to component auditors. Any instances of non-compliance with laws and regulations identified and
communicated by a component auditor were considered in our Group audit approach.
The most significant laws and regulations were determined as follows:
Legislation/Regulation
Additional audit procedures performed by the Group audit engagement team and component auditors included:
UK-adopted International Accounting Standards;
The Companies (Guernsey) Law, 2008;
AIM listing rules.
Review of the financial statement disclosures and testing to supporting documentation;
Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance regulations
Inspection of advice received from internal and external tax advisors where applicable.
Mining Charter of South Africa
and associated laws
Enquiry of management as to whether any breaches had been identified;
Review of supporting documentation where relevant.
UK Bribery Act
Inspection of policies and procedures, internal reports and minutes of meetings of the Board,
Committees and management.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the Group audit engagement team and component auditors:
Revenue recognition
• Substantive analytical procedures and the matching of sales to third party cash receipts,
to evidence occurrence;
• Tests of control in respect of occurrence; and
• Testing of transactions before and after the year-end date, to determine whether revenue
is recognised in the correct period.
Management override of controls
• Testing the appropriateness of journal entries and other adjustments;
• Assessing whether the judgements made in making accounting estimates are indicative
of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside
the normal course of business.
A further description of our responsibilities for the audit of the financial statements is included in appendix 1 of this Auditor’s Report. This
description, which is located at page 62, forms part of our Auditor’s Report.
60
Annual Report and Financial Results 2023 USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with section 262 of The Companies (Guernsey) Law 2008.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
RSM UK AUDIT LLP, Auditor
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
28 June 2024
61
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BUSHVELD MINERALS LIMITED CONTINUED
APPENDIX 1: AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. We include an explanation in the Auditor’s Report of the extent to
which the audit was capable of detecting irregularities, including fraud.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that the use of the going concern basis of accounting is appropriate and no material uncertainties have been identified,
we report these conclusions in the Auditor’s Report. If we conclude that a material uncertainty exists, we are required to draw attention in
our Auditor’s Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our Auditor’s Report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express
an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit.
We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence,
including the FRC’s Ethical Standard as applied to listed entities, and communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the
consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our Auditor’s Report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
We are required to include in the Auditor’s Report an explanation of how we evaluated management’s assessment of the Group’s ability to continue
as a going concern and, where relevant, key observations arising with respect to that evaluation.
62
Annual Report and Financial Results 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Figures in thousands of US$
Revenue
Cost of sales
Gross profit
Other operating income
Impairment losses
Selling and distribution costs
Other mine operating costs
Idle plant costs
Administration expenses
Operating loss
Finance income
Finance costs
Other losses
Fair value gain on derivative liability
Share of loss from investments in associate and joint venture
Loss before taxation
Taxation
Loss for the year
Loss attributable to
Owners of the parent
Non-controlling interest
Loss per ordinary share
Basic loss per share (cents)
Diluted loss per share (cents)
Notes
5
13, 14
7
8
9
10
28
18
11
2023
2022
137,471
(122,068)
148,448
(108,304)
15,403
2,059
(58,637)
(8,825)
(2,838)
(8,963)
(20,786)
(82,587)
523
(15,387)
(3,378)
32
(4,242)
(105,039)
(1,730)
(106,769)
(103,927)
(2,842)
(106,769)
40,144
2,733
(23,965)
(9,270)
(2,723)
(6,725)
(20,328)
(20,134)
494
(14,148)
(818)
2,934
(5,112)
(36,784)
1,345
(35,439)
(38,968)
3,529
(35,439)
12
12
(7.43)
(7.43)
(3.07)
(3.07)
The accounting policies on pages 68 to 79 and the notes on pages 68 to 101 form an integral part of the consolidated financial statements.
63
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
Figures in thousands of US$
Loss for the year
Consolidated other comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Other fair value movements
Items that may be reclassified to profit or loss
Currency translation differences
Other comprehensive loss for the year net of taxation
Total comprehensive loss
Total comprehensive loss attributable to
Equity holders
Non-controlling interest
Notes
2023
2022
(106,769)
(35,439)
15
140
(12,673)
(12,658)
(119,427)
(115,732)
(3,695)
(119,427)
(15,712)
(15,572)
(51,011)
(53,323)
2,312
(51,011)
The accounting policies on pages 68 to 79 and the notes on pages 68 to 101 form an integral part of the consolidated financial statements.
64
Annual Report and Financial Results 2023 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Figures in thousands of US$
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investment property
Deferred tax asset
Investments in associate and joint venture
Restricted investment
Total non-current assets
Current assets
Inventories
Trade and other receivables
Other financial assets
Cash and cash equivalents
Asset held for sale
Total current assets
Total assets
Equity and liabilities
Share capital
Share premium
Accumulated loss
Share-based payment reserve
Foreign currency translation reserve
Fair value reserve
Attributable to equity holders
Non-controlling interest
Total equity
Liabilities
Non-current liabilities
Post-retirement medical liability
Environmental rehabilitation liabilities
Deferred consideration
Borrowings
Lease liabilities
Deferred tax liability
Total non-current liabilities
Current liabilities
Trade and other payables
Provisions
Borrowings
Lease liabilities
Deferred consideration
Current tax payable
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2023
2022
13
14
15
16
18
21
19
20
17
22
13
23
23
23
24
23
23
25
26
27
28
29
16
30
31
28
29
27
–
99,744
2,173
464
2,360
2,881
107,622
42,273
25,018
24
1,281
68,596
3,700
72,296
179,918
26,944
140,272
(118,006)
261
(47,166)
(1,783)
522
288
810
1,577
16,633
306
38,008
7,746
–
64,270
46,295
1,944
60,567
682
2,304
3,046
114,838
179,108
179,918
53,469
127,409
2,412
–
3,151
2,710
189,151
54,990
9,498
3,075
10,874
78,437
–
78,437
267,588
17,122
127,702
(39,147)
515
(35,346)
(1,798)
69,048
36,583
105,631
1,675
16,610
1,527
35,272
6,721
1,191
62,996
45,896
1,714
47,858
561
901
2,031
98,961
161,957
267,588
The consolidated financial statements and the notes on pages 63 to 101 were approved by the Board of Directors on the 28 June 2024 and were
signed on its behalf by:
Craig Coltman
Chief Executive Officer
28 June 2024
The accounting policies on pages 68 to 79 and the notes on pages 68 to 101 form an integral part of the consolidated financial statements.
65
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Figures in thousands of US$
Share
capital
Share
premium
Foreign
currency
translation
reserve
Share-based
payment
reserve
Fair value
reserve
Accumulated
loss
Total
attributable
to equity
holders of
the Group
Non-
controlling
interest
Total
equity
Balance at 1 January 2022
16,797
125,551
(20,851)
Loss for the year
Other comprehensive income,
net of tax:
Currency translation differences
Other fair value movements
Total comprehensive loss for
the year
Transaction with owners:
Issue of shares
Share-based payment
Contribution from non-controlling
interest (note 28)
–
–
–
–
325
–
–
–
–
–
–
–
(14,495)
–
(14,495)
2,151
–
–
–
–
–
–
–
–
–
–
–
515
–
(1,938)
(179)
119,380
32,482
151,862
–
(38,968)
(38,968)
3,529
(35,439)
–
140
–
–
(14,495)
140
(1,217)
–
(15,712)
140
140
(38,968)
(53,323)
2,312
(51,011)
–
–
–
–
–
–
2,476
515
–
–
2,476
515
–
1,789
1,789
Balance at 1 January 2023
17,122
127,702
(35,346)
515
(1,798)
(39,147)
69,048
36,583
105,631
Loss for the year
Other comprehensive income,
net of tax:
Currency translation differences
Other fair value movements
Total comprehensive loss for
the year
Transaction with owners:
Issue of shares
Share issue costs
Share-based payment
Acquisition of non-controlling
–
–
–
–
–
–
–
–
–
(11,820)
–
(11,820)
6,874
–
9,977
(945)
–
–
–
–
–
–
–
–
–
–
(254)
–
–
–
(103,927)
(103,927)
(2,842)
(106,769)
–
15
–
–
(11,820)
15
(853)
–
(12,673)
15
15
(103,927)
(115,732)
(3,695)
(119,427)
–
–
–
–
–
–
16,851
(945)
(254)
–
–
16,851
(945)
(254)
25,068
31,554
(33,036)
(1,482)
–
–
522
436
288
436
810
interest
2,948
3,538
Contribution from non-controlling
interest (note 28)
–
–
Balance at 31 December 2023
26,944
140,272
(47,166)
261
(1,783)
(118,006)
66
Annual Report and Financial Results 2023 CONSOLIDATED STATEMENT OF CASH FLOWS
Figures in thousands of US$
Notes
2023
2022
Cash flows from operating activities
Loss before taxation
Adjustments for:
Depreciation property, plant and equipment (including right-of-use assets)
Share of loss from investments in associate and joint venture
Fair value gain on derivative liability
Finance income
Finance costs
Impairment losses
Loss on financial instruments and conversion of loan
Other non-cash movements
Foreign exchange differences
Changes in working capital
Income taxes paid
Net cash generated from/(used in) operating activities
Cash flows from investing activities
Finance income
Purchase of property, plant and equipment
Purchase of investments
Purchase of exploration and evaluation assets
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Proceeds from borrowings
Finance costs
Lease payments
Purchase of non-controlling interest
Equity proceeds (net)
Net cash generated from/(used in) financing activities
Total cash and cash equivalents movement for the year
Cash and cash equivalents at the beginning of the year
Effect of translation of foreign exchange rates
Total cash and cash equivalents at end of the year
(105,039)
(36,784)
16,491
4,242
(32)
(523)
15,387
58,637
2,052
2,415
(4,302)
7,151
(2,705)
(6,226)
367
(5,725)
–
(322)
(5,680)
(2,232)
8,990
(3,265)
(703)
(643)
794
2,941
(8,965)
10,874
(628)
1,281
18,475
5,112
(2,934)
(494)
14,148
23,965
–
1,138
(6,949)
6,154
(648)
21,183
336
(18,197)
(1,211)
(517)
(19,589)
(5,623)
4,222
(3,217)
(728)
–
–
(5,346)
(3,752)
15,433
(807)
10,874
14
18
28
8
9
13, 14
18
13
28
28
28
29
23
23
22
The accounting policies on pages 68 to 79 and the notes on pages 68 to 101 form an integral part of the consolidated financial statements.
67
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
Bushveld Minerals Limited (“Bushveld” or the “Company”) and its subsidiaries and interest in equity accounted investments (together the “Group”)
is an integrated primary vanadium producer and energy storage solutions provider. The Company was incorporated and domiciled in Guernsey on
5 January 2012 and admitted to the AIM market in London on 26 March 2012. The address of the Company’s registered office is Oak House,
Hirzel Street, St Peter Port, Guernsey, GY1 3RH.
As at 31 December 2023, the Bushveld Group comprised of:
Note
Equity holding and
voting rights
Country of
incorporation
Nature of activities
n/a
100%
100%
64%
100%
100%
62.5%
74%
51%
100%
84%
100%
40%
55%
72.6%
40% & 30%
30.58%
100%
100%
100%
100%1
100%
100%
100%
99%
100%
99%
100%
100%
1
2
2
2
13
2
2
2
2
1
4
12
12
4
1, 4
14
2
7
8
11
9
10
1
5
3
6
3
3
Guernsey
Guernsey
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
South Africa
Mauritius
South Africa
South Africa
South Africa
Guernsey
UK
Guernsey
Guernsey
United States
South Africa
South Africa
South Africa
South Africa
Mauritius
Madagascar
Mauritius
Madagascar
Mauritius
South Africa
Ultimate holding company
Holding company
Processing company
Mining right holder
Group support services
Processing company
Vanadium and iron ore exploration
Vanadium and iron ore exploration
Vanadium and iron ore exploration
Holding company
Holding company
Energy development
Energy development
Energy development
Holding company
Energy development
Holding company
Sales of vanadium
Holding company
Holding company
Mining right holder
Mining and manufacturing company
Property owning company
Holding company
Coal exploration
Holding company
Power generation company
Holding company
Coal exploration
Company
Bushveld Minerals Limited
Bushveld Resources Limited
Ivanti Resources (Pty) Limited
Pamish Investments No 39 (Pty) Limited
Bushveld Minerals SA (Pty) Limited
Bushveld Vanchem (Pty) Limited
Great 1 Line Invest (Pty) Limited
Gemsbok Magnetite (Pty) Limited
Caber Trade and Invest 1 (Pty) Limited
Bushveld Vanadium 2 (Pty) Limited
Bushveld Energy Limited
Bushveld Energy Company (Pty) Limited
Bushveld Vametco Hybrid Mini-Grid Company (RF)
(Pty) Limited
Bushveld Electrolyte Company (Pty) Ltd
VRFB Holdings Limited
Vanadium Electrolyte Rental Limited
Enerox Holdings Limited
Bushveld Vametco Limited
Strategic Minerals Connecticut LLC
Bushveld Vanadium 1 (Pty) Limited
Bushveld Vametco Holdings (Pty) Limited
Bushveld Vametco Alloys (Pty) Limited
Bushveld Vametco Properties (Pty) Limited
Lemur Holdings Limited
Coal Mining Madagascar SARL
Imaloto Power Project Limited
Imaloto Power Project Company SARL
Lemur Investments Limited
Lemur SA (Pty) Ltd
1. Held directly by Bushveld Minerals Limited
2. Held by Bushveld Resources Limited
3. Held by Lemur Holdings Limited
4. Held by Bushveld Energy Limited
5. Held by Lemur Investments Limited
6. Held by Imaloto Power Limited
7. Held by Bushveld Vametco Limited
8. Held by Strategic Minerals Connecticut LLC
9. Held by Bushveld Vametco Holdings (Pty) Limited
10. Held by Vametco Alloys (Pty) Limited
11. Held by Bushveld Vanadium 1 (Pty) Limited
12. Held by Bushveld Energy Company (Pty) Limited
13. Held by Bushveld Vanadium 2 (Pty) Limited
14. Held by VRFB Holdings Limited
1
The company acquired the 26% minority interest in Bushveld Vametco Holdings on 20 December 2023 (see note 23).
68
Annual Report and Financial Results 2023 2. ADOPTION OF NEW ACCOUNTING STANDARDS
The following new accounting pronouncements are effective for annual periods beginning on or after 1 January 2023 and have been incorporated
into the consolidated financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies.
Amendments to IAS 8: Definition of Accounting Estimates.
Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
International Tax Reform – Pillar Two Model Rules. Amendments to IAS 12 were issued to give entities temporary mandatory relief from accounting
for deferred taxes arising from the Organisation for Economic Co-operation and Development’s international tax reform. The amendments became
effective upon issuance, except for certain disclosure requirements which become effective for annual reporting periods beginning on or after
1 January 2023.
The adoption of these pronouncements did not have a significant impact on the consolidated financial statements of the Group.
NEW ACCOUNTING STANDARDS ISSUED BUT NOT EFFECTIVE
Certain pronouncements have been issued by the International Accounting Standards Board (“IASB”) that are mandatory for accounting periods
after 31 December 2023:
Amendments to IAS 1: Classification of Liabilities as Current or Non-current effective for annual periods beginning on or after 1 January 2024.
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback effective for annual periods beginning on or after 1 January 2024.
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements effective for periods on or after 1 January 2024.
Amendments to IAS 21: Lack of Exchangeability effective for annual periods on or after 1 January 2025.
Pronouncements related to IFRS 16, IAS 7 and IFRS 7 are not expected to have a significant impact on the Group’s consolidated financial
statements upon adoption. Pronouncements related to IAS 1 which the Group is still reviewing could have a material impact on the Group’s
consolidated financial statements upon adoption. The Group does not intend to early adopt these standards.
3. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
BASIS OF PREPARATION
The consolidated financial statements of the Company and its subsidiaries and interest in equity accounted investments as at the year ended
31 December 2023 have been prepared in accordance with the UK-adopted International Accounting Standards.
The consolidated financial statements have been prepared under the historical cost basis, except for certain financial instruments and
investment properties measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for
the assets.
GOING CONCERN
The consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities
and the realisation of assets and discharge of liabilities in the normal course of business.
The Group recorded a net loss after tax of US$106.77 million for the year ended 31 December 2023 of which US$58.64 million related to
impairment losses (31 December 2022: US$23.97 million). As at 31 December 2023 the Group had cash and cash equivalents of US$1.28 million
(31 December 2022: US$10.87 million) and total borrowings of US$98.58 million (31 December 2021: US$83.13 million).
The Directors closely monitor and manage the liquidity risk of the Group by ensuring that the Group has sufficient funds for all ongoing operations.
As part of the annual budgeting and long-term planning process, the Directors reviewed the approved Group budget and cashflow forecast through
to 30 June 2025. The current cashflow forecast has been amended in line with any material changes identified during the year. Equally, where
funding requirements are identified from the cashflow forecast, appropriate measures are taken to ensure these requirements can be met.
The Group has entered into a revised sales agreement with SPR, which was approved by the shareholders, whereby the Group will sell 100% of
Vanchem. The closing of the Vanchem sale remains conditional upon approval by the Competition Tribunal. The Group also entered into revised
agreements with Orion whereby the Group will receive additional funding of up to US$10 million under the senior term loan facility and the
repayment of interest and capital are extended to 31 December 2025. The drawdown of the additional facility is subject to SARB approval.
69
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
The Directors have performed an assessment of whether the Group would be able to continue as a going concern for at least twelve months from the
date of this report. In their assessment, the Group has taken into account its financial position, expected future performance of its operations, its
debt facilities and debt service requirements, its working capital requirements, capital expenditure commitments and forecasts, expected proceeds
from the sale of Vanchem and Mokopane and outstanding equity proceeds. Additionally the Directors factored in the favourable relationship with
Orion, demonstrated by the restructuring of agreements to accommodate market conditions and constructive engagement in relevant matters.
The cashflow forecast for Vametco takes into consideration production levels achieved to date, annual planned maintenance shutdowns are undertaken,
and these shutdowns proceed in line with the planned timetable and no unplanned shutdowns are experienced during the going concern period.
With regards to pricing, the short to medium term assumptions, which are based on external forecasts, are that the average price achieved by the
Group will be US$27.73/kgV through to 31 December 2024 and an average of US$34.40/kgV throughout 2025. The year-to-date average price
achieved by the Group was circa US$26/kgV.
The Group’s ability to continue as a going concern is dependent on its ability to complete the sale of Vanchem and Mokopane and the timing
of those sales proceeds, complete the refinance of the Orion senior term loan and the timing of receiving the additional funding, the continued
support of Orion, and achieving the planned production levels at the estimated average sales prices.
These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group’s ability to continue as a going
concern. The consolidated financial statements for the year ended 31 December 2023 have been prepared on a going concern basis as, in the
opinion of the Directors, the Group will be in a position to continue to meet its operating and capital costs requirements and pay its debts as and
when they fall due for at least twelve months from the date of this report.
Accordingly, these consolidated financial statements do not include adjustments to the recoverability and classification of recorded assets and
liabilities and related expenses that might be necessary should the Group be unable to continue as a going concern.
BASIS OF CONSOLIDATION
The consolidated financial statements present the consolidated statement of financial position and changes therein, consolidated statement of profit
or loss, consolidated statement of comprehensive loss and consolidated statement of cash flows for the Group. Where necessary, adjustments are
made to the results of subsidiaries and equity accounted investments to ensure the consistency of their accounting policies with those used by the
Group. Intercompany transactions, balances and unrealised profits and losses between Group companies are eliminated on consolidation.
SUBSIDIARIES
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Where the
Group’s interest in a subsidiary is less than 100%, the Group recognises a non-controlling interest.
DISPOSAL OF SUBSIDIARIES
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the
change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
ASSOCIATES AND JOINT VENTURES
An associate is an entity over which the Group has significant influence but neither control nor joint control. A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Investments in associates and
joint ventures are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate and joint
venture is recognised in profit or loss and the share of the movements in other comprehensive income is recognised in other comprehensive
income. Investments in associates and joint ventures are carried in the statement of financial position at cost plus post-acquisition changes in the
consolidated entity’s share of net assets of the associate and joint venture. Goodwill relating to the associate and joint venture is included in the
carrying amount of the investment and is neither amortised nor individually tested for impairment. Income earned from associate or joint venture
entities reduces the carrying amount of the investment.
NON-CONTROLLING INTERESTS
Non-controlling interests in subsidiaries are identified separately from the Group’s shareholders therein. Those interests of non-controlling
shareholders that present ownership interests entitling their holders to a proportionate share of the net assets upon liquidation are initially
measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Black Economic Empowerment (“BEE”) interests are accounted for as non-controlling interests on the basis that the Group does not control these
entities. The Company acquired the 26% interest in Bushveld Vametco Holdings on 20 December 2023 (see note 23).
70
Annual Report and Financial Results 2023 3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
BUSINESS COMBINATIONS
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary
is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group.
The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or
at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. Acquisition-related costs
are expensed as incurred.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree
is remeasured to fair value at the acquisition date; any gains or losses arising from such remeasurement are recognised in profit or loss.
Subsequent transactions that do not result in the obtaining of control are accounted for as equity transactions as follows:
• The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in
the subsidiary.
• Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid is recognised
directly in equity and attributed to the owners of the parent.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair
value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in profit or loss. Contingent
consideration that is classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (“CODM”).
The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief
Executive Officer and the Executive Committee. Operating segments whose revenues, net earnings or losses or assets exceed 10% of the total
consolidated revenues, net earnings or losses or assets, are reportable segments.
In order to determine the reportable operating segments, various factors are considered, including geographical location and managerial structure.
FUNCTIONAL AND PRESENTATIONAL CURRENCY
The functional currency of each entity in the Group is determined as the currency of the primary economic environment in which it operates. For
the purpose of the consolidated financial statements, the results and financial position of each entity within the Group are expressed in US Dollars,
which is the presentation currency for the consolidated financial statements.
Transactions denominated in foreign currencies are translated into the entity’s functional currency as follows:
• Monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date;
• Non-monetary assets and liabilities are translated at historical exchange rates prevailing at each transaction date;
• Deferred tax assets and liabilities are translated at the exchange rate in effect at the balance sheet date with translation gains and losses
recorded in income tax expense; and
• Revenues and expenses are translated at the average exchange rates throughout the reporting period, except depreciation, which is translated
at the rates of exchange applicable to the related assets, and share-based compensation expense, which is translated at the rates of exchange
applicable at the date of grant of the share-based compensation.
Exchange gains or losses on translation of transactions are included in the consolidated statement of profit or loss.
The results and financial position of all entities within the Group that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at the closing rate;
•
Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates
of the transactions); and
• All resulting exchange differences are recognised in other comprehensive income and accumulated in foreign currency translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign currency translation reserve relating to that entity
up to the date of disposal are transferred to the consolidated statement of profit or loss as part of the profit or loss on disposal.
71
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
REVENUE RECOGNITION – SALE OF GOODS
IFRS 15 requires revenue from contracts with customers to be recognised when the separate performance obligations are satisfied, which is when
control of promised goods or services are transferred to the customer.
The Group satisfies a performance obligation by transferring control of the promised goods or services to the customer on delivery of the goods.
The Group recognises revenue at the amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring
goods or services to a customer. Revenue with contract customers is generated from sale of goods and is recognised upon transferring control of
the goods to the customer, at a point in time, and comprises the invoiced amount of goods to customers, net of value added tax.
COST OF SALES
When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is
recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the
period in which the write-down or loss occurs.
SHARE-BASED PAYMENTS
The fair value of bonus shares granted to employees for nil consideration under the short-term incentive (“STI”) scheme is recognised as an
expense over the relevant service period, being the year to which the bonus relates and the vesting period of the shares. The fair value is measured
at the grant date of the shares and is recognised in equity in the share-based payment reserve. The number of shares expected to vest is estimated
based on the non-market vesting conditions.
Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expenses previously recognised in relation to such
shares are reversed effective from the date of the forfeiture.
The fair value of the performance shares issued under the long-term incentive scheme (“LTI”) is recognised as an expense over the vesting period.
Non-vesting conditions and market vesting conditions are factored into the fair value of the performance shares granted. An option pricing model
is used to measure the fair value of the performance shares.
FINANCE INCOME
Interest income is recognised when it is probable that economic benefits will flow to the Group and the amount of income can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial
recognition.
CURRENT AND DEFERRED INCOME TAX
The tax expense represents the sum of the tax currently payable and deferred income tax.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the reporting date in the countries in which
the Group’s subsidiaries operate and generate taxable income.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the “balance sheet
liability” method.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable
that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that
are expected to apply to the year when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the
reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive
income, in which case the deferred tax is also dealt with in other comprehensive income.
ASSETS HELD FOR SALE
Non-current assets and disposal groups are classified as held for sale if their carrying value will be recovered principally through a sale transaction
rather than through continuing use. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset
or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the
asset or disposal group and the sale expected to be completed within one year from the date of the classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs
of disposal (“FVLCD”). If the FVLCD is lower than the carrying amount, an impairment loss is recognised in the consolidated statement of profit
or loss. Non-current assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are
presented separately as current items in the consolidated statement of financial position.
72
Annual Report and Financial Results 2023 3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
INTANGIBLE EXPLORATION AND EVALUATION ASSETS
All costs associated with mineral exploration and evaluation including the costs of acquiring prospecting licences; mineral production licences and
annual licences fees; rights to explore; topographical, geological, geochemical and geophysical studies; exploratory drilling; trenching, sampling
and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource, are capitalised as intangible exploration
and evaluation assets and subsequently measured at cost.
If an exploration project is successful, the related expenditures will be transferred at cost to property, plant and equipment and amortised over
the estimated life of the commercial ore reserves on a unit of production basis (with this charge being taken through profit or loss). Where a project
does not lead to the discovery of commercially viable quantities of mineral resources and is relinquished, abandoned, or is considered to be of no
further commercial value to the Group, the related costs are recognised as an impairment loss in the consolidated statement of profit or loss.
The recoverability of capitalised exploration costs is dependent upon the discovery of economically viable ore reserves, the ability of the Group
to obtain necessary financing to complete the development of ore reserves and future profitable production or proceeds from the extraction or
disposal thereof.
IMPAIRMENT OF EXPLORATION AND EVALUATION ASSETS
Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the asset is reviewed for
impairment. Assets are also reviewed for impairment at each reporting date in accordance with IFRS 6. An asset’s carrying value is written down
to its estimated recoverable amount (being the higher of the fair value less costs of disposal and value in use) if that is less than the asset’s carrying
value. Impairment losses are recognised in the consolidated statement of profit or loss.
An impairment review is undertaken when indicators of impairment arise but typically when one of the following circumstances applies:
• Unexpected geological occurrences that render the resources uneconomic; or
• Title to the asset is compromised; or
• Variations in mineral prices that render the project uneconomic; or
• Variations in the foreign currency rates; or
• The Group determines that it no longer wishes to continue to evaluate or develop the field.
PROPERTY, PLANT AND EQUIPMENT (EXCLUDING RIGHT-OF-USE ASSETS)
Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, except for investment
properties which are carried at fair value. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire
the asset and includes costs directly attributable to making the asset capable of operating as intended.
Depreciation on assets commences when they are available for use by the Group. Depreciation for property, plant and equipment is charged on a
systematic basis over the estimated useful lives of the assets after deducting the estimated residual value of the assets, using the straight-line method.
The depreciation method applied, the estimated useful lives of assets and their residual values are reviewed at least at each financial year end, with
any changes accounted for as a change in accounting estimate to be applied prospectively. The depreciation charge for each period is recognised
in the consolidated statement of profit or loss.
The useful life of an asset is the period of time over which the asset is expected to be used. The estimated useful lives of items of property, plant and
equipment are as follows:
• Buildings and other improvements
• Plant and machinery
• Motor vehicles, furniture and equipment
• Decommissioning asset
• Waste stripping asset
20-25 years
5-20 years
3-10 years
Life-of-mine
21 months
Assets under construction are not depreciated.
Repairs and maintenance expenditure is generally charged in profit and loss during the financial period in which it is incurred. However renovations
are capitalised and included in the carrying amount of the asset when it is probable that future economic benefits will flow to the Group. Major
renovations are depreciated over the remaining useful life of the related asset.
An item of property, plant and equipment is derecognised upon disposal or when no future benefits are expected from its use or disposal. Any gain
or loss arising from derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in the consolidated statement of profit or loss in the year the asset is derecognised.
73
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
IMPAIRMENT LOSSES
At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit (“CGU”) to which the asset belongs.
In assessing whether an impairment is required, the carrying value of the asset or CGU is compared with its recoverable amount. The recoverable
amount is the higher of the CGU’s fair value less costs of disposal (“FVLCD”) and value in use (“VIU”). In the absence of market-related information
or similar transactions, the FVLCD is estimated based on discounted future estimated cash flows (expressed in real terms) expected to be generated
from the continued use of the CGU using market-based commodity price and exchange assumptions, estimated quantities of recoverable minerals,
production levels, operating costs and capital requirements, including any expansion projects, and its eventual disposal, based on the latest
life-of-mine (“LOM”) plans. These cash flows were discounted using a real post-tax discount rate that reflected current market assessments
of the time value of money and the risks specific to the CGU.
Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are sourced from the planning
process, including the LOM plans, two-year budgets and CGU-specific studies.
INVESTMENT PROPERTY
Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in the consolidated statement
of profit or loss. Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the
carrying amount of the item) is recognised in the consolidated statement of profit or loss.
INVENTORIES
Inventories are valued at the lower of cost or estimated net realisable value. Cost is determined on the following basis:
• Raw materials
• Consumable stores
• Work in progress
• Finished product
weighted average cost
weighted average cost
weighted average cost
weighted average cost
Work in progress and finished goods are measured at the lower of weighted average production cost and net realisable value. Raw materials and
consumables are measured at the lower of average purchase cost and net realisable value.
Production costs include cost of raw materials, direct labour, other direct costs and related production overheads, but exclude borrowing costs.
Production overheads are allocated to inventory based on the normal operating capacity of the production facilities.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated selling
expenses.
Any write-down to net realisable value is recognised as an expense in the period in which the write-down occurs. Any reversal is recognised in the
consolidated statement of profit or loss in the period in which the reversal occurs.
Provision is made, if necessary, for slow-moving, obsolete or defective inventory.
FINANCIAL ASSETS AND LIABILITIES
Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group becomes a party
to the contractual provisions of the instrument. Financial instruments are classified into specified categories dependent upon the nature and purpose
of the instruments at the time of initial recognition
FINANCIAL ASSETS
MEASUREMENT
At initial recognition, the Group measures all financial assets at fair value plus, in the case of a financial asset not at fair value through profit or loss
(“FVTPL”), transaction costs. Transaction costs of financial assets carried at FVTPL are expensed in the consolidated statement of profit or loss.
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value though other comprehensive income
(“FVOCI”) or FVTPL.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s
business model for managing them.
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Annual Report and Financial Results 2023
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
DEBT INSTRUMENTS
In order for a financial asset to be classified and measured at amortised cost or FVOCI, it needs to give rise to cash flows that are ‘solely payments
of principal and interest’ (“SPPI”) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash
flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Financial assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is
subsequently measured at FVTPL is recognised in the consolidated statement of profit or loss and presented net within other income/(expenses)
in the period in which it arises.
EQUITY INSTRUMENTS
The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and
losses on equity investments in other comprehensive income (“OCI”) (however, the cumulative gain/loss on disposal is represented within equity),
there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from
such investments continue to be recognised in profit or loss as other income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVTPL are recognised in other income/(expenses) in the consolidated statement of profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value.
DERECOGNITION
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership.
TRADE AND OTHER RECEIVABLES
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components,
then they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore
measures them subsequently at amortised cost using the effective interest method, less any allowance for expected credit losses.
To determine the expected credit loss allowance for trade receivables, the Group applies the simplified approach permitted by IFRS 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables, see note 33.6 for further details.
Other receivables consist of prepayments and deposits, which are initially recognised as non-financial assets and realised over time.
RESTRICTED INVESTMENT
Restricted investment comprises of an investment in an insurance fund. These funds are dedicated towards future rehabilitation expenditure
on the mine property. This is classified as a financial asset and measured at amortised costs.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value.
FINANCIAL LIABILITIES
Accounts payable, accrued liabilities and borrowings are accounted for at amortised cost, using the effective interest rate method.
CONVERTIBLE LOAN
Interest-bearing loans are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their
amortised cost and finance charges, including premiums payable on settlement, redemption or conversion, are recognised in profit or loss over
the term of the instrument using the effective rate of interest.
Instruments where the holder has the option to redeem for cash or convert into a pre-determined quantity of equity shares are classified as compound
instruments and presented partly as a liability and partly as equity.
Instruments where the holder has the option to redeem for cash or convert into a variable quantity of equity shares are classified separately as a
loan and a derivative liability.
Where conversion results in a fixed number of equity shares, the fair value of the liability component at the date of issue is estimated using the
prevailing market interest rate for a similar non-convertible instrument. The difference between the proceeds of issue and the fair value assigned to
the liability component, representing the embedded option to convert the liability into equity of the Group, is included in equity. Where conversion
is likely to result in a variable quantity of equity shares the related derivative liability is valued and included in liabilities.
75
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar non-convertible debt
to the instrument. The difference between this amount and the interest paid is added to the carrying value of the convertible loan note.
Derivative liabilities are revalued at fair value at the reporting date, and changes in the valuation amounts are credited or charged to the profit or loss.
BORROWINGS
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference
between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the reporting period.
Borrowing costs are capitalised and allocated specifically to qualifying assets when funds have been borrowed, either to specifically finance a project
or for general borrowings during the period of construction. Qualifying assets are defined as assets that require more than a year to be brought to
the location and condition intended by management. Capitalisation of borrowing costs ceases when such assets are ready for their intended use.
LEASES
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits
from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using
the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The discount rate used ranges
between 10% to 11% depending on the nature of the underlying asset.
fixed lease payments (including in-substance fixed payments), less any lease incentives;
Lease payments included in the measurement of the lease liability comprise:
•
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
•
•
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured
by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is
remeasured by discounting the revised lease payments using a revised discount rate.
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which
cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments
change is due to a change in a floating interest rate, in which case a revised discount rate is used).
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured
by discounting the revised lease payments using a revised discount rate.
The Group did not make any such adjustments during the periods presented.
76
Annual Report and Financial Results 2023 3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement
day and any initial direct costs.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the
underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. The costs
are included in the related right-of-use asset, unless those costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the
underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is
depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Group applies IAS 36
to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.
PROVISIONS
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised
as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated
statement of profit or loss, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.
Where discounting is used the increase in the provision due to the passage of time is recognised as a finance cost.
I. ENVIRONMENTAL REHABILITATION LIABILITIES
The Group is exposed to environmental liabilities relating to its operations. Full provision for the cost of environmental and other remedial work
such as reclamation costs, close down and restoration costs, and pollution control is made based on the estimated cost as per the Environmental
Management Programme Report. Annual increases in the provisions relating to change in the net present value of the provision are shown in the
consolidated statement of profit or loss as a finance cost. Changes in estimates of the provision are accounted for in the year the change in estimate
occurs, and is charged to either the consolidated statement of profit or loss or the decommissioning asset in property, plant and equipment,
depending on the nature of the liability.
II. POST-RETIREMENT MEDICAL LIABILITY
The liability in respect of the defined benefit medical plan is the present value of the defined benefit obligation at the reporting date together with
adjustments for actuarial gains/losses. Any actuarial gains or losses are accounted for in other comprehensive income. The defined benefit obligation
is calculated annually by independent actuaries using the projected unit of credit method.
III. PROVIDENT FUND CONTRIBUTIONS
The Group’s contributions to the defined contribution plan are charged to profit and loss in the year to which they relate.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of consolidated financial statements in conformity with the UK-adopted International Accounting Standards requires management
to make judgements, estimates and assumptions that affect the reported amount of assets, liabilities and contingent liabilities at the date of the
consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are
continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed
to be reasonable under the circumstances.
Assumptions about the future and other major sources of estimation uncertainty at the end of the reporting period have a significant risk of
resulting in a material adjustment to the carrying amounts of assets and liabilities, within the next financial year. The most significant judgements
and sources of estimation uncertainty that the Group believes could have a significant impact on the amounts recognised in its consolidated
financial statements are described below.
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Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
I. IMPAIRMENT OF NON-CURRENT ASSETS
JUDGEMENTS MADE IN RELATION TO ACCOUNTING POLICIES
Both internal and external sources of information are required to be considered when determining the presence of an impairment indicator or
an indicator of reversal of a previous impairment. Judgement is required around significant adverse changes in the business climate which may
be indicators of impairment such as a significant decline in the asset’s market value, decline in resources and/or reserves including as a result of
geological reassessment or change in timing of extraction of resources and/or reserves which would result in a change in the discounted cash flow,
and lower commodity prices or higher input cost prices than would have been expected since the most recent valuation. Judgement is also required
when considering whether significant positive changes in any of these items indicate a previous impairment may have reversed.
KEY SOURCES OF ESTIMATION UNCERTAINTY
If an indication of impairment or reversal of a previous impairment charge exists an estimate of a CGU’s recoverable amount is calculated. The
recoverable amount is based on the higher of FVLCD and VIU using a discounted cash flow methodology taking into account assumptions that
would be made by market participants, unless there is a market price available based on a recent purchase or sale.
If the recoverable amount is based using a discounted cash flow methodology, expected future cash flows used are inherently uncertain and could
materially change over time and impact the recoverable amounts. The cash flows and recoverable amount are significantly affected by a number of
factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and
future commodity prices, discount rates, foreign currency exchange rates, estimates of costs to produce products, and future capital expenditure.
The Group entered into sales agreements with Southern Point Resources (“SPR”) to sell 50% of Bushveld Vanchem (“Vanchem”) for a consideration
of between US$20.0 million and US$21.3 million and to sell its interest in the Mokopane Project for a consideration of US$3.7 million. The sales
price for Vanchem is dependent on if the Mokopane sale close within one year following the closing of the Vanchem sale. As the completion of either
sale is not dependent upon the other, the directors are satisfied that the consideration for each reflects the fair value. The directors determined that
the premium paid on the equity subscription price did not represent additional consideration for the disposal of Vanchem or Mokopane as the price
payable was equivalent to other investors.
The recoverable amount of Vanchem CGU was based on the minimum sales price offered of US$20.0 million as the increase in the sales price to
US$21.3 million is dependent on the closing of Mokopane which does not form part of the Vanchem CGU. An impairment loss of US$8.22 million
was recognised in the consolidated statement of profit and loss to align the carrying value of the CGU with the recoverable amount of US$39.75
million, which is US$40.0 million less cost of disposal of US$0.25 million (see note 14). The directors have determined that the agreement to
dispose of the remaining 50% of Vanchem (see note 36) for an undiscounted sales price of between US$15-20 million does not alter this valuation
as it is considered a non-adjusting subsequent event.
The recoverable amount of the Mokopane Project was based on the sales price offered of US$3.7 million (see note 13). An impairment loss of
US$49.62 million was recognised in the consolidated statement of profit or loss to align the carrying value with the recoverable amount.
II. ASSESSMENT OF CONTROL
JUDGEMENT MADE IN RELATION TO ACCOUNTING POLICIES
The Group needs to determine if it will continue to control its investment in Vanchem following the closing of the transaction. The Group will initially
have the right to appoint half of the board of Vanchem (the “Board”), including the Chairman, who will have a casting vote. The Chairman of the
Board will rotate between the shareholders every three years, unless SPR has the right to appoint a director on the Board of the Group which would
remove the requirement for the Chairman rotate. The Board has the authority to manage and direct the business and affairs of Vanchem and there
are no limitations on the Board’s authority. All matters required to be approved by the Board, including capital investment, operating, and financing
decisions and annual budgets will be made by a simple majority vote. In case there is a deadlock on these decisions, the Chairman will have a
casting vote in addition to his/her deliberation vote. There is no limitations on the Chairman’s casting vote.
The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Based on the ability to appoint the initial Chairman of the board and the expectation that the Chairman
will continue to be a Group appointee because SPR would have representation on the Group’s Board, the directors have made a significant judgement
that the Group will continue to control its investment in Vanchem. As the reduction in the level of ownership of Vanchem will not result in a loss of
control the assets and liabilities have not been classified as held for sale.
Subsequent to year-end (see note 36), the Group amended the agreement with SPR whereby it will acquire the entire Vanchem asset. This is
considered a non-adjusting subsequent event and does not impact the above assessment.
78
Annual Report and Financial Results 2023 3. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
OTHER JUDGEMENT AND ESTIMATES
I. ENVIRONMENTAL REHABILITATION LIABILITIES
KEY SOURCES OF ESTIMATION UNCERTAINTY
Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements
as most of the obligations will be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions
are further influenced by changing technologies, political, environmental, safety, business and statutory considerations (see note 26).
4. SEGMENTAL REPORTING
Bushveld Minerals Limited’s operating segments are identified by the Chief Executive Officer and the Executive Committee, collectively named as
the CODM. The operating segments are identified by the way the Group’s operations are organised. As at 31 December 2023, the Group operated
within three operating segments, vanadium mining and production, which consists of the Vametco and Vanchem operations; energy and mineral
exploration activities for vanadium; and coal exploration (together “Exploration”). Activities take place in South Africa (vanadium and energy),
Madagascar (coal), other African countries (energy project development), and global (battery investment, vanadium sales). Corporate includes
the remaining balances within the Group.
SEGMENT REVENUE AND RESULTS
The following is an analysis of the Group’s revenue and results by reportable segment.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
2023 (Figures in thousands of US$)
Vanadium mining and production
Exploration
Energy
Corporate
Total
Revenues
137,471
–
–
–
137,471
Cost of
sales1
(122,068)
–
–
–
Other
costs2
Administrative
expenses3
Impairment
losses
(18,815)
–
25
223
(6,139)
(4)
(924)
(13,719)
(9,017)
(49,620)
–
–
(122,068)
(18,567)
(20,786)
(58,637)
Includes depreciation of US$15.97 million.
1
2 Other costs include other operating income, other mine operating costs, selling and distribution costs and idle plant costs.
3
Includes depreciation of US$0.11 million for Vanadium mining and production, US$0.28 million for Energy and US$0.13 million for Corporate.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
2022 (Figures in thousands of US$)
Vanadium mining and production
Exploration
Energy
Corporate
Total
Revenues
148,446
–
2
–
148,448
Cost of
sales1
(108,304)
–
–
–
(108,304)
Other
costs2
Administrative
expenses3
Impairment
losses
(16,525)
–
171
369
(15,985)
(8,435)
(21)
(952)
(10,920)
(20,328)
(18,454)
(5,137)
(374)
–
(23,965)
Includes depreciation of US$18.04 million.
1
2 Other costs include other operating income, other mine operating costs, selling and distribution costs and idle plant costs.
3
Includes depreciation of US$0.15 million for Vanadium mining and production, US$0.10 million for Energy and US$0.18 million for Corporate.
Operating
loss
(18,568)
(49,624)
(899)
(13,496)
(82,587)
Operating
loss
(3,272)
(5,158)
(1,153)
(10,551)
(20,134)
OTHER SEGMENTAL INFORMATION
Figures in thousands of US$
Vanadium mining and production
Exploration
Energy
Corporate
Total
2023
2022
Total assets
Total liabilities
Total assets
Total liabilities
139,018
4,114
19,094
17,692
179,918
107,662
141
13,189
58,116
179,108
186,460
53,679
17,432
10,017
267,588
104,351
38
10,836
46,732
161,957
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Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5. REVENUE
Figures in thousands of US$
Revenue from contracts with customers
Sale of goods
Other
Disaggregation of revenue from contracts with customers
The Group disaggregates revenue from customers as follows:
Sale of goods
Local sales of vanadium – NV12
Local sales of vanadium – NV16
Local sales of vanadium – MVO
Total local sales
Export sales of vanadium – NV12
Export sales of vanadium – NV16
Export sales of vanadium – AMV
Total export sales
Other
Total revenue from contract with customers
2023
2022
137,471
–
137,471
148,446
2
148,448
4,514
1,973
128
6,615
34,861
83,439
12,556
5,503
2,650
4
8,157
34,939
99,672
5,678
130,856
140,289
–
2
137,471
148,448
Revenue with contract customers is generated from sale of goods and is recognised upon delivery of the goods to the customer, at a point in time
and comprises the invoiced amount of goods to customers, net of value added tax.
6. STAFF COSTS
Figures in thousands of US$
Production staff
Administrative staff
Key management personnel
2023
24,055
7,212
1,836
33,103
Details of directors’ remuneration are included in note 35 (related-party transactions) and the Remuneration Report on page 44.
7. ADMINISTRATIVE EXPENSES BY NATURE
Figures in thousands of US$
Key management personnel
Staff costs
Depreciation of property, plant and equipment
Professional fees
Share-based payments
Other
8. FINANCE INCOME
Figures in thousands of US$
Bank interest
Interest on restricted investment
Other finance income
9. FINANCE COSTS
Figures in thousands of US$
Interest on borrowings
Unwinding of discount on environmental rehabilitation liabilities
Interest on lease liabilities
Other finance costs
80
2022
25,799
7,259
2,068
35,126
2022
2,068
7,259
439
6,007
315
4,240
2023
1,836
7,212
520
7,051
(254)
4,421
20,786
20,328
2023
149
218
156
523
2023
12,151
1,873
724
639
15,387
2022
206
127
161
494
2022
11,189
1,726
974
259
14,148
Notes
28
26
29
Annual Report and Financial Results 2023 10. OTHER LOSSES
Figures in thousands of US$
Movement in earnout estimate
Loss on financial instrument
Loss on conversion of loan
Write-off loan
Notes
27
17
17
2023
6
1,700
352
1,320
3,378
2022
693
125
–
–
818
The Group provided a working capital loan to Mustang Energy Plc (“Mustang”) of US$0.42 million which was repaid by issuing equity in the
capital of Mustang. The difference between the loan amount and the fair value of the equity received was recognised as a loss in the consolidated
statement of profit or loss.
The Group provided additional funding to Enerox GmbH of US$1.32 million which were written-off as the loan is not repayable.
11. TAXATION
Figures in thousands of US$
Current
Current income tax on profits for the year
Deferred
Deferred income tax movement for current year
Prior year adjustment
Income tax expense/(recovery)
2023
2022
3,196
3,294
(1,456)
(10)
(1,466)
1,730
(4,659)
20
(4,639)
(1,345)
The income tax expense/(recovery) represents the sum of the tax currently payable and the deferred tax adjustment for the year.
Loss before tax
Tax at the applicable tax rate of 27% (2022: 28%)1
Tax effect on non-deductible items
Origination and reversal of temporary differences
Deferred tax asset (recognised)/not recognised
Recognised deferred tax assets – initial recognition
Tax rate change
Foreign jurisdictions subject to a different tax rate
Taxation recovery for the year
2023
2022
(105,039)
(28,361)
13,697
3,979
7,376
–
–
5,039
1,730
(36,784)
(10,300)
1,423
(2,045)
7,916
(17)
(210)
1,888
(1,345)
1 Based on South African tax rate as it is the primary economic environment in which the Group operates.
12. LOSS PER SHARE
BASIC LOSS PER SHARE
Basic loss per share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary
shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.
Figures in thousands of US$
Numerator
Net loss attributable to equity holders
Denominator (in thousands)
Weighted average number of common shares
Basic loss per share attributable to equity holders (cents)
2023
2022
(103,927)
(38,968)
1,399,650
1,270,637
(7.43)
(3.07)
DILUTED LOSS PER SHARE
Due to the Group being loss making for the year, instruments are not considered dilutive and therefore the diluted loss per share is the same as
basic loss per share for both financial years.
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Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
13. INTANGIBLE ASSETS
Figures in thousands of US$
Balance, 1 January 2022
Capitalised expenditures
Impairment loss
Exchange differences
Balance, 31 December 2022
Capitalised expenditures
Impairment loss
Exchange differences
Transfer to asset held for sale
Balance, 31 December 2023
Vanadium and
Iron Ore
53,856
174
–
(561)
53,469
322
(49,620)
(471)
(3,700)
–
Coal
5,398
343
(5,137)
(604)
–
–
–
–
–
–
Total
59,254
517
(5,137)
(1,165)
53,469
322
(49,620)
(471)
(3,700)
–
MOKOPANE VANADIUM AND IRON ORE PROJECT
The Group has an interest in Prospecting right 95. The Department of Mineral Resources and Energy (“DMRE”) executed a 30-year mining right
on 29 January 2020 in favour of Pamish, over five farms: Vogelstruisfontein 765 LR; Vriesland 781 LR; Vliegekraal 783 LR; Schoonoord 786 LR;
and Bellevue 808 LR (the “Mining Right”) situated in the District of Mogalakwena, Limpopo, which make up the Mokopane Project.
The Mining Right required Pamish to commence mining activities, including in-situ activities associated with the Definitive Feasibility Study (“DFS”)
by end of January 2021. The Covid-19 pandemic resulted in a significant delay in the commencement of the DFS and the necessary engagement
with local communities required to finalise land use arrangements and, consequently, this deadline was not met. Application to the DMRE for an
extension to commence mining activities has been submitted and Pamish is awaiting a response.
The Group entered into a sale of shares agreement with SPR on 14 December 2023 to sell its interest in the Mokopane Project for US$3.7 million.
The transaction is subject to certain regulatory approvals as well as other customary closing conditions. The Competition Commission approved
the sale subsequent to year end.
At 31 December 2023, the Mokopane intangible asset met the criteria to be classified as held for sale and has been classified as a current asset held
for sale on the consolidated statement of financial position. During the year ended 31 December 2023, an impairment charge of US$49.62 million
was recognised in the consolidated statements of profit or loss to align the carrying value of the asset with the sales price. The intangible asset forms
part of the exploration segment.
BRITS VANADIUM PROJECT
The Group re-evaluated the Brits Vanadium Project and after careful consideration it was concluded that the Project should be discontinued.
There was no loss recognised as the costs were not previously capitalised.
COAL PROJECT
Coal exploration licences have been issued to Coal Mining Madagascar SARL, a 99% subsidiary of Lemur Investments Limited. The exploration is
in south west Madagascar covering 11 concession blocks in the Imaloto Coal basin known as the Imaloto Coal Project and Extension. The Imaloto
Coal Project was impaired in 2023 as no further expenditures were budgeted. All further expenditures on the Imaloto Coal Project was expensed
as incurred. Subsequent to year-end, the Group entered into an agreement to sell its interest in the Imaloto Coal Project.
82
Annual Report and Financial Results 2023 14. PROPERTY, PLANT AND EQUIPMENT
Figures in thousands of US$
Cost
At 1 January 2022
Additions
Transfers within PPE
Changes in environmental rehabilitation
liabilities
Exchange differences
At 31 December 2022
Additions
Changes in environmental rehabilitation
liabilities
Scrapping of obsolete assets
Transfers within PPE
Exchange differences
At 31 December 2023
Accumulated depreciation
At 1 January 2022
Depreciation charge for the year
Impairment
Exchange differences
At 31 December 2022
Depreciation charge for the year
Scrapping of obsolete assets
Impairment
Exchange differences
At 31 December 2023
Net Book Value
At 31 December 2022
At 31 December 2023
*
Include decommissioning assets.
Buildings and
other
improvements
Plant and
machinery*
Motor
vehicles,
furniture and
equipment
Right of use
asset
Waste
stripping asset
Assets under
construction
Total
6,957
–
63
169,484
691
19,376
–
(445)
(1,705)
(9,298)
6,575
178,548
–
–
–
(34)
264
(556)
(336)
(4,443)
2,106
(12,055)
1,374
138
34
–
(92)
1,454
245
–
(192)
–
(119)
5,066
2,989
–
–
(435)
7,620
1,729
–
(424)
–
(664)
–
1,850
–
19,147
15,988
(19,473)
202,028
21,656
–
–
(68)
–
(1,098)
(1,705)
(11,436)
1,782
14,564
210,543
616
5,454
8,044
–
–
–
(157)
–
–
(2,370)
(1,301)
(336)
(5,093)
–
(14,852)
6,249
163,820
1,388
8,261
2,241
16,347
198,306
(1,280)
(330)
(898)
122
(45,318)
(17,233)
(17,920)
2,776
(2,386)
(77,695)
(331)
32
(421)
198
(14,120)
3,651
(7,750)
4,530
(2,908)
(91,384)
4,189
3,341
100,853
72,436
(759)
(219)
(10)
56
(932)
(185)
191
(14)
73
(867)
522
521
(1,560)
(297)
–
117
(1,741)
(433)
424
–
144
(1,605)
–
(396)
–
14
(382)
(1,422)
–
–
42
(1,761)
–
–
–
–
–
–
–
(37)
–
(37)
(48,917)
(18,475)
(18,828)
3,085
(83,134)
(16,491)
4,298
(8,222)
4,987
(98,562)
5,880
6,656
1,401
480
14,564
127,409
16,310
99,744
The right of use asset of US$6.65 million relates to land and buildings of US$6.62 million and plant and machinery of US$0.03 million.
IMPAIRMENT DISCLOSURE
At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exist, the recoverable amount of the asset is estimated in order to determine the extent of
the impairment loss (if any).
VANCHEM CASH GENERATING UNIT (CGU)
An impairment loss of US$8.22 million was recognised in the consolidated statement of profit and loss within impairment losses and in the
consolidated statement of financial position as a reduction to property, plant, and equipment to align the carrying value of the Vanchem CGU
with the recoverable amount of US$39.75 million (see note 3).
OTHER
The Group also recognised an impairment charge of US$0.79 million in the consolidated statement of profit or loss related to items of property,
plant and equipment that were identified as being no longer in use.
83
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
15. INVESTMENT PROPERTY
Figures in thousands of US$
Balance, beginning of the year
Fair value movement
Exchange differences
Balance, end of the year
2023
2,412
(32)
(207)
2,173
2022
2,595
(17)
(166)
2,412
Investment properties comprise residential housing in Brits and Elandsrand, North West Province.
Investment properties are stated at fair value (level 3 of the fair value hierarchy), which has been determined based on valuations performed by
Domus Estate Management, an accredited independent valuer, as at 31 December 2023. Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following valuation techniques and key inputs were used in the valuation of the investment properties:
i. Physical inspection of each property;
ii. Consultation with estate agencies to discuss current sales market trends; and
iii. Comparative sales reports were obtained for locations where properties are situated in South Africa.
16. DEFERRED TAX ASSET/(LIABILITY)
Figures in thousands of US$
Deferred tax liability
Investment properties
Property, plant and equipment
Prepayments
Expected credit losses
Total deferred tax liability
Deferred tax asset
Provisions
Environmental rehabilitation liabilities
Lease liabilities
Non-deductible expenses
Post-retirement medical liability
Deferred tax balance from temporary differences other than unused tax losses
Unused tax losses
Total deferred tax asset
Deferred tax liability
Deferred tax assets
Total net deferred tax asset/(liability)
2023
2022
(371)
(15,167)
(16)
(64)
(15,618)
895
4,491
1,373
1,360
426
8,545
7,537
16,082
(15,618)
16,082
464
(517)
(17,925)
(15)
(18)
(18,475)
(642)
4,549
1,521
1,029
460
6,917
10,367
17,284
(18,475)
17,284
(1,191)
The evidence supporting recognition of a deferred tax asset is forecast for Vametco to which the losses relate which indicate with reasonable
certainty the availability of sufficient future taxable profits and the existence of corresponding deferred tax liabilities against which the losses
can be utilised.
2023 (Figures in thousands of US$)
Deferred tax liability
Investment properties
Property, plant and equipment
Prepayments
Expected credit losses
Deferred tax asset
Provisions
Non-deductible expenses
Environmental rehabilitation liabilities
Lease liabilities
Post-retirement medical liability
Unused tax losses
84
Beginning
balance
Statement of
profit or loss
(517)
(17,925)
(15)
(18)
(642)
1,029
4,550
1,521
459
10,367
(1,191)
7
1,223
(3)
(48)
1,491
422
336
(17)
5
(1,950)
1,466
Other
comprehensive
income
Exchange
differences
Ending balance
139
1,535
2
2
46
(91)
(395)
(131)
(40)
(880)
187
(371)
(15,167)
(16)
(64)
895
1,360
4,491
1,373
426
7,537
464
–
–
–
–
–
–
–
–
2
–
2
Annual Report and Financial Results 2023 16. DEFERRED TAX ASSET/(LIABILITY) CONTINUED
2022 (Figures in thousands of US$)
Deferred tax liability
Investment properties
Property, plant and equipment
Prepayments
Expected credit losses
Deferred tax asset
Provisions
Non-deductible expenses
Environmental rehabilitation liabilities
Lease liabilities
Post-retirement medical liability
Unused tax losses
17. FINANCIAL ASSETS
Figures in thousands of US$
Balance, beginning of the year
Additions
Loss on financial instrument
Finance income
Transfer to investments in joint ventures
Exchange differences
Balance, end of the year
Beginning
balance
Statement of
profit or loss
Other
comprehensive
income
Exchange
differences
Ending
balance
(577)
(25,722)
(24)
–
711
–
5,049
195
534
13,820
(6,014)
24
6,374
8
(19)
(1,358)
1,068
(181)
1,389
–
(2,666)
4,639
–
–
–
–
–
–
–
–
(34)
–
(34)
Notes
18
36
1,423
1
1
5
(39)
(318)
(63)
(41)
(787)
218
2023
3,075
24
(1,700)
138
(987)
(526)
24
(517)
(17,925)
(15)
(18)
(642)
1,029
4,550
1,521
459
10,367
(1,191)
2022
–
2,923
–
159
–
(7)
3,075
The Group subscribed in 2022 for two convertible loan notes issued by Mustang Energy Plc (“Mustang”) with a principle amount of US$2.93 million
bearing 10% interest per annum in exchange for a convertible loan note issued to Primorius and share capital issued to Lind Partners (see note 23
and 28).
The convertible loan notes were cancelled upon the exercise of the Mustang backstop agreement and the Group received Mustang’s interest in
VRFB (see note 18 and 23). The difference between the fair value of the convertible loan notes and the fair value of Mustang’s interest in VRFB
was recognised as a loss on financial instrument in the consolidated statement of profit or loss.
18. INVESTMENTS IN ASSOCIATE AND JOINT VENTURES
Figures in thousands of US$
Balance, 1 January 2022
Transfer from financial assets
Share of loss
Exchange differences
Balance, 31 December 2022
Additional investment on issue of shares
Transfer from financial assets
Share of loss
Exchange differences
Balance, 31 December 2023
VRFB
Mini-Grid
7,855
–
(5,112)
(751)
1,992
1,886
987
(4,242)
678
1,301
–
1,211
–
(52)
1,159
–
–
–
(100)
1,059
Total
7,855
1,211
(5,112)
(803)
3,151
1,886
987
(4,242)
578
2,360
85
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
18. INVESTMENTS IN ASSOCIATE AND JOINT VENTURES CONTINUED
VRFB HOLDINGS LIMITED (“VRFB”) – ASSOCIATE
The Group acquired a 50.5% interest in VRFB in April 2021, which is the holding company for the Group’s 50% investment in Enerox GmbH
(“CellCube”). Upon the exercise of the Mustang backstop agreement (see note 23), Mustang transferred its 22.1% interest in VRFB to the Group.
The Group did not participate in the fund raisings of CellCube and its investment in CellCube was diluted from 50% to 30.58%.
The Group accounts for its effective shareholding in CellCube through VRFB as an investment in associate.
Figures in thousands of US$
Summarised financial information in respect of VRFB is set out below:
Revenue
Net loss
Other comprehensive income
Comprehensive loss
2023
2022
2,923
(11,744)
–
(11,744)
11,183
(20,389)
275
(20,114)
HYBRID MINI-GRID COMPANY PROPRIETARY LIMITED (‘MINI-GRID”) – JOINT VENTURE
The Group entered into a shareholders’ agreement with NESA Investment Holdings, whereby it holds a 40% interest in Mini-Grid.
The Group accounts for its 40% shareholding as an investment in joint venture as the relevant decisions require unanimous consent.
19. INVENTORIES
Figures in thousands of US$
Finished goods
Work in progress
Raw materials
Consumable stores
Total inventories
2023
12,702
15,566
2,510
11,495
42,273
2022
23,511
14,740
4,435
12,304
54,990
The cost of inventories recognised as an expense during the year was US$104.97 million (2022: US$88.60 million).
The Group recognised a net realisable value write-down of finished goods amounting to US$0.84 million (31 December 2022: US$0.33 million)
and work in progress amounting to US$0.94 million (31 December 2022: US$0.19 million). The Group recognised a write-down of raw materials
and work in progress for US$1.19 million (31 December 2022: US$ nil).
20. TRADE AND OTHER RECEIVABLES
Figures in thousands of US$
Financial assets:
Trade receivables
Other receivables
Expected credit losses
Subscription receivables
Non-financial assets:
Value-added taxes
Deposits
Prepaid expenses
Total trade and other receivables
CATEGORISATION OF TRADE AND OTHER RECEIVABLES
Trade and other receivables are categorised as follows in accordance with IFRS 9: Financial Instruments:
Figures in thousands of US$
At amortised cost
Non-financial instruments
Notes
2023
2022
23
7,590
525
(116)
13,917
2,510
133
459
25,018
2023
21,916
3,102
25,018
3,134
2,856
(78)
–
3,163
19
404
9,498
2022
5,912
3,586
9,498
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due
for settlement within 15-90 days and therefore are all classified as current.
The fair value of trade and other receivables approximate the carrying value due to the short maturity.
86
Annual Report and Financial Results 2023 20. TRADE AND OTHER RECEIVABLES CONTINUED
IMPAIRMENT AND RISK EXPOSURE
Information about the impairment of trade receivables and the Group’s exposure to credit risk, interest rate risk and foreign currency risk can be
found in note 33.
21. RESTRICTED INVESTMENT
Figures in thousands of US$
Rehabilitation insurance fund
Split between non-current and current portions
Non-current assets
2023
2,881
2022
2,710
2,881
2,710
The Group is required by statutory law in South Africa to hold this restricted investment in order to meet environmental rehabilitation liabilities on
the statement of financial position (see note 26 and 34 for further details).
22. CASH AND CASH EQUIVALENTS
Figures in thousands of US$
Cash and cash equivalents consist of:
Bank balances
Short-term deposits
2023
2022
1,280
1
1,281
8,348
2,526
10,874
Cash and cash equivalents (which are presented as a single class of assets on the face of the statement of financial position) comprise cash at bank
and other short-term highly liquid investments with an original maturity of three months or less.
The total cash and cash equivalents denominated in South African Rand amount to US$0.78 million (2022: US$6.72 million).
The fair value of cash and cash equivalents approximates the carrying value due to the short maturity.
23. SHARE CAPITAL, SHARE PREMIUM AND RESERVES
Figures in thousands of US$
Balance, 1 January 2022
Shares issued – Directors and staff
Shares issued – Primorus Convertible
Shares issued – Lind
Balance, 31 December 2022
Shares issued – Mustang backstop agreement
Shares issued – Acquisition of minority interest
Shares issued – Equity raise (net of cost)
Number
of shares
Share
capital
Share
premium
1,260,458,857
2,324,842
4,157,645
20,876,937
1,287,818,281
270,393,578
232,836,255
395,897,277
16,797
29
54
242
17,122
1,886
2,948
4,988
125,551
494
476
1,181
127,702
–
3,538
9,032
Balance, 31 December 2023
2,186,945,391
26,944
140,272
Total share
capital and
premium
142,348
523
530
1,423
144,824
1,886
6,486
14,020
167,216
The Board may, subject to Guernsey law, issue shares or grant rights to subscribe for or convert securities into shares. It may issue different classes
of shares ranking equally with existing shares. It may convert all or any classes of shares into redeemable shares. The Company may also hold
treasury shares in accordance with the law. Dividends may be paid in proportion to the amount paid up on each class of shares.
As at the 31 December 2023, the Company owns 670,000 (31 December 2022: 670,000) treasury shares with a nominal value of 1 pence.
SHARES ISSUED
DIRECTORS AND STAFF
The Company issued in 2022 2,324,842 new ordinary shares of 1 pence each in the Company in respect of the short-term incentive plans.
PRIMORUS INVESTMENTS PLC (“PRIMORUS”)
The Company issued a convertible loan note to Primorus. The Company issued a total of 4,157,645 new ordinary shares of 1 pence each in accordance
with the conversion provisions.
87
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
23. SHARE CAPITAL, SHARE PREMIUM AND RESERVES CONTINUED
LIND GLOBAL MACRO FUND, LP (“LIND”)
The Company issued 20,876,937 new ordinary shares of one pence each to Lind in accordance with the Investment Agreement between the
Company and Mustang.
MUSTANG BACKSTOP AGREEMENT
The Company entered into an investment agreement with Mustang whereby the holders of the Mustang convertible loan notes (“CLN”) would
be able to request the issuance of new shares if Mustang’s shares had not been readmitted to trading on the LSE by 31 July 2023.
In August 2023, each of the CLN holders had elected to redeem their CLNs and were issued 270,393,578 new ordinary shares of one pence each
in Bushveld.
ACQUISITION OF MINORITY INTEREST
The Company acquired on 20 December 2023, the 26% minority interest in Bushveld Vametco Holdings owned by a Black Economic
Empowerment (“BEE”) consortium in return for the issue of 232,836,255 shares in the Company, cash payment of ZAR18 million and the
cancellation of a US$0.51 million loan.
EQUITY RAISE
The Company completed an equity raised on 27 December 2023 whereby it issued 395,897,277 new ordinary shares at a price of three pence per
share for gross proceeds of US$14.97 million. The Company incurred transaction costs of US$0.95 million of which US$0.25 million was paid. The
Company received US$0.79 million in net proceeds and recorded a receivable of US$13.92 million for the proceeds received subsequent to year end.
NATURE AND PURPOSE OF OTHER RESERVES
SHARE PREMIUM
The share premium reserve represents the amount subscribed for share capital in excess of nominal value.
SHARE-BASED PAYMENT RESERVE
The share-based payment reserve represents the cumulative fair value of share options granted to employees.
FOREIGN EXCHANGE TRANSLATION RESERVE
The translation reserve comprises all foreign currency differences arising from the translation of financial statements of foreign operations.
FAIR VALUE RESERVE
The fair value reserve comprises the cumulative net change in the fair value of financial assets at fair value through other comprehensive income
until the assets are derecognised or impaired and actuarial changes recognised on the post retirement medical aid liability.
RETAINED INCOME RESERVE
The retained income reserve represents other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.
24. SHARE-BASED PAYMENTS
SHORT-TERM INCENTIVE (“STI”)
Deferred share awards
Balance, beginning of the year
Vested
Forfeited
Balance, end of the year
Number of shares
2023
2022
–
–
–
–
1,212,360
(1,099,404)
(112,956)
–
The Group awarded 2,424,720 deferred share awards to certain employees on 5 August 2021 under its short-term incentive plan. The deferred
share awards vested in equal tranches after 12 months (31 December 2021) and 18 months (30 June 2022). The vesting of the deferred share
awards is dependent on the employees still being employed on the respective vesting dates. The deferred share awards are settled directly by the
Company, in its own shares. The fair value of the deferred share awards was US$0.42 million which is the market price of the Company’s share at
grant date (£0.13) and the exchange rate on that date.
The Group awarded 2,801,300 deferred share awards to certain employees on 5 August 2021 in lieu of a cash bonus. These deferred share awards
vested on 31 December 2021. The vesting of the deferred share awards is dependent on the employees still being employed on the vesting date.
The deferred share awards are settled directly by the Company, in its own shares. The fair value of the deferred share awards was US$0.50 million
which is the market price of the Company’s share at grant date (£0.13) and the exchange rate on that date.
The Company issued in 2022 2,324,842 new ordinary shares of one pence each in respect to the STI (see note 23) and 2,788,222 shares are still
to be issued to certain employees being in a closed period.
88
Annual Report and Financial Results 2023 24. SHARE-BASED PAYMENTS CONTINUED
LONG-TERM INCENTIVE (“LTI”)
Performance awards
Balance, beginning of the year
Granted
Vested
Forfeited
Lapsed
Balance, end of the year
Number of shares
2023
2022
–
16,750,860
–
(6,599,110)
–
10,151,750
2,458,443
–
–
–
(2,458,443)
–
The Remuneration Committee approved performance awards in 2022, which were awarded in 2023. The performance awards vest over a period
of three years (1 January 2022 – 31 December 2024) and is subject to both employment and performance conditions. The performance conditions
states that 60% of the number of performance awards will vest based on the performance of the Company’s total shareholder return (“TSR”) and
40% of the performance awards will vest based on the performance of the Group’s normalised cash return on equity (“nCROE”). Based on the
Group’s performance on both TSR and nCROE being below the threshold, it is expected that the performance awards will not vest.
The Group awarded performance awards to certain employees in 2019 and at vesting date it was determined that zero percent of the performance
awards vested as the performance conditions were not met.
25. POST-RETIREMENT MEDICAL LIABILITY
The benefit comprises medical aid subsidies provided to qualifying retired employees. Actuarial valuations are made annually with the most recent
valuation on 31 December 2023. The present value of the post-retirement medical liability were measured using the projected unit credit method.
The following table summarises the components of the net benefit expense recognised in the consolidated statement of profit or loss and the
consolidated statement of comprehensive income or loss and the amounts recognised in the consolidated statement of financial position.
Figures in thousands of US$
Balance, beginning of the year
Net expense recognised in profit or loss
Actuarial changes recognised in other comprehensive income or loss
Exchange differences
Balance, end of the year
The principal assumptions used for the purposes of the actuarial valuation was as follows:
Actual age
Discount rates
Health care cost inflation
Duration of liability
2023
1,675
3
44
(145)
1,577
2022
1,906
13
(126)
(118)
1,675
2023
2022
77.8 years
11.70%
7.70%
77.3 years
11.60%
7.80%
8.62 years
8.8 years
A one percent change in the assumed rate of healthcare costs inflation would have the following effect on the present value of the unfunded
obligation: Plus one percent – US$0.12 million (2022: US$0.13 million); Less one percent – US$0.11 million (2022:US$0.12 million).
A one percent change in the assumed interest rate would have the following effect on the current service cost and interest cost: Plus one percent –
US$0.18 million (2022: US$0.20 million); Less one percent – US$0.16 million (2022: US$0.17 million).
26. ENVIRONMENTAL REHABILITATION LIABILITIES
Figures in thousands of US$
Balance, beginning of the year
Unwinding of discount
Change in estimates charged to profit or loss
Change in estimates capitalised to property, plant and equipment
Exchange differences
Balance, end of the year
Notes
9
14
2023
16,610
1,873
(75)
(336)
(1,439)
16,633
2022
18,031
1,726
(291)
(1,705)
(1,151)
16,610
89
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
26. ENVIRONMENTAL REHABILITATION LIABILITIES CONTINUED
The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a discounted basis at the time
of developing the mine and installing and using those facilities.
The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred up to 2052,
which is when the producing mine properties are expected to cease operations. These provisions have been created based on the Group’s internal
estimates. Assumptions based on the current economic environment have been made, which management believes are a reasonable basis upon
changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation
works required that will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the
mines cease to produce at economically viable rates. This, in turn, will depend upon future vanadium prices, which are inherently uncertain.
The provision is calculated using the following key assumptions:
Inflation rate
Discount rate
2023
11.26%
12.26%
2022
10.41%
11.41%
A one percent change in the assumed discount rate would have the following effect on the present value of the provision: Plus one percent –
decrease of US$3.77 million; Less one percent – increase of US$4.93 million.
A one percent change in the assumed inflation rate would have the following effect on the present value of the provision: Plus one percent –
increase of US$4.93 million; Less one percent – decrease of US$3.83 million.
27. DEFERRED CONSIDERATION
Figures in thousands of US$
Balance, beginning of the year
Finance costs
Movement in earnout estimate
Balance, end of the year
Split between non-current and current portions
Current deferred consideration
Non-current deferred consideration
Notes
10
2023
2,428
176
6
2,610
2,304
306
2,610
2022
1,684
51
693
2,428
901
1,527
2,428
The Group is required to pay an earnout amount to EVRAZ on the acquisition of the Vametco Group which is based on the annual percentage of
additional revenue ascribed to Bushveld Vametco Alloys as a result of the prevailing price being above the trigger price in respect of each financial
year commencing on 1 January 2018 and ending on 31 December 2025, up to a maximum amount of US$5.55 million.
Management updated their estimated earnout payment to reflect actual production and price for the year ended 31 December 2023 and estimated
production and price for future years which resulted in an increase of US$0.06 million in the estimated earnout payment.
28. BORROWINGS
Figures in thousands of US$
Orion production financing agreement (“PFA”)
Orion convertible loan notes (“CLN”)
Southern Point Resources (“SPR”) interim working capital facility
Industrial Development Corporation (“IDC”) shareholder loan
IDC property, plant and equipment loan
Other
Split between non-current and current portions
Non-current
Current
90
2023
35,635
46,766
7,812
2,664
3,574
2,124
98,575
38,008
60,567
98,575
2022
35,146
39,742
–
1,999
3,481
2,762
83,130
35,272
47,858
83,130
Annual Report and Financial Results 2023 28. BORROWINGS CONTINUED
Figures in thousands of US$
Balance, 1 January 2022
Cash changes:
Proceeds from borrowings
Repayment of principle and interest
Non-cash changes:
Convertible loan note in exchange
for financial assets
Conversion of convertible loan notes
Finance costs
Fair value gain on derivative liability
Adjustment to reflect market value of loan
Exchange differences
Balance, 1 January 2023
Cash changes:
Proceeds from borrowings
Repayment of principle and interest
Non-cash changes:
Finance costs1
Fair value gain on derivative liability
Remeasurement of financial liabilities
Exchange differences
Orion PFA
Orion CLN
33,512
36,282
–
(2,906)
–
–
–
–
4,420
–
–
120
–
–
6,394
(2,934)
–
–
35,146
39,742
–
(3,859)
4,450
–
–
(102)
–
–
7,056
(32)
–
–
SPR interim
working capital
facility
–
–
–
–
–
–
–
–
–
–
7,505
(263)
420
–
–
150
IDC loans
3,282
3,416
–
–
–
470
–
(1,789)
101
5,480
942
–
590
–
(436)
(338)
Other
6,821
806
(5,934)
1,636
(530)
375
–
–
(412)
2,762
543
(1,375)
225
–
–
(31)
35,635
46,766
7,812
6,238
2,124
Total
79,897
4,222
(8,840)
1,636
(530)
11,659
(2,934)
(1,789)
(191)
83,130
8,990
(5,497)
12,741
(32)
(436)
(321)
98,575
1 Finance costs include capitalised borrowing cost of US$0.59 million (31 December 2022: US$0.47 million) to property, plant and equipment.
ORION MINE FINANCE PRODUCTION FINANCING AGREEMENT
The Group signed a long-term production financing agreement (“PFA”) of US$30 million with Orion Mine Finance (“Orion”) in December 2020,
primarily to finance its expansion plans at Bushveld Vametco Alloys Proprietary Limited and debt repayment. Exchange control authorisation from
the South Africa Reserve Bank Financial Surveillance Department was granted in October 2020.
PFA DETAILS
The Group will repay the principal amount and pay interest via quarterly payments determined initially as the sum of:
• a gross revenue rate (set at 1.175% for 2020 and 2021 and 1.45% from 2022 onwards, subject to adjustment based on applicable quarterly
vanadium prices) multiplied by the gross revenue for the quarter; and
• a unit rate of US$0.443/kgV multiplied by the aggregate amount of vanadium sold for the quarter.
Once the Group reaches vanadium sales of approximately 132,020 mtV during the term of the facility, the gross revenue rate and unit rate will
reduce by 75% (i.e. to 25% of the applicable rates).
On each of the first three loan anniversaries, the Group had the option to repay up to 50% of both constituent loan parts (each may only be repaid once).
If the Group utilises the loan repayment option, the gross revenue rate and/or the unit rate will reduce accordingly.
The PFA capital will provide funding to continue to grow production at Vametco to more than 4,300 mtV per annual production level and debt repayment.
Part of the proceeds were used by the Group to prepay in full the Nedbank ZAR250 million term loan.
FIRST AMENDMENT
The Group entered into a first amendment to the agreement on 6 August 2021. In terms of the amendment, US$17.8 million of the funds ringfenced
for the Vametco Phase 3 Expansion was reallocated to Vanchem mainly for capital expenditure on Kiln-3.
The original PFA had a cap of 1,075 mtV per quarter. This amounted to 4,300 mtV per annum expected from 2024 onwards following the completion
of the Vametco Phase 3 expansion project. The amended agreement, with the addition of the Vanchem production volumes from 1 July 2021
resulted in the initial cap of 4,300 mtV being brought forward, from 1 July 2022 instead of from 2024.
ORION MINE FINANCE CONVERTIBLE LOAN NOTES INSTRUMENT
The Company subscribed to a US$35 million convertible loan notes instrument in December 2020 (the “Instrument”) with Orion Mine Finance
(“Orion”). The Instrument’s proceeds were used towards the first phase of Vanchem’s critical refurbishment programme and debt repayment.
91
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
28. BORROWINGS CONTINUED
The terms of the Instrument are:
• A fixed 10% per annum coupon with a three-year maturity date from the drawdown date.
• All interest will accrue and be capitalised on a quarterly basis in arrears but compounded annually.
• Accumulated capitalised and accrued interest is convertible into Bushveld ordinary shares. All interest and principal, to the extent not converted
into ordinary shares, is due and payable at maturity date.
• Conversion price set at 17 pence.
The conversion features are:
Between drawdown and the Instrument’s maturity date Orion may, at their option, convert an amount of the outstanding debt, including capitalised
and accrued interest, into Bushveld’s ordinary shares as follows:
• First six months: Up to one third of the outstanding amount;
• Second six months: Up to two thirds of the outstanding amount (less any amount previously converted);
• From the anniversary of drawdown until the maturity date: The outstanding amount under the Instrument may be converted;
• The Company also has the option to convert all, but not some, of the amount outstanding under the Instrument, if its volume weighted average
share price is more than 200% of the conversion price over a continuous 15 trading day period, a trading day being a day on which the AIM market
is open for the trading of securities.
At any time until the convertible maturity date, Orion may convert the debt as above mentioned into an amount of ordinary shares equal to the total
amount available for conversion under the Instrument divided by the conversion price of 17 pence.
The Company entered into an agreement on 27 November 2023 with Orion to extend the maturity date of the Instrument to 31 January 2024 and
subsequently refinanced the Instrument (see note 36).
Figures in thousands of US$
Balance, 01 January 2022
Finance costs and fair value gain
Balance, 31 December 2022
Finance costs and fair value gain
Balance, 31 December 2023
Loan
33,316
6,394
39,710
7,056
46,766
Derivative
liability
2,966
(2,934)
32
(32)
–
Total
36,282
3,460
39,742
7,024
46,766
The Orion borrowings are secured against certain group companies and associated assets.
SPR INTERIM WORKING CAPITAL FACILITY
Bushveld Vanchem (“Vanchem”) entered into a loan agreement with SPR on 19 September 2023 whereby SPR borrowed ZAR150.0 million to Vanchem.
The loan bears interest, which is payable in cash every two weeks, in the following amount:
•
•
•
If the Vanadium Price is less than US$35/kgV, an amount equal to 0.54% of ZAR150,000,000;
If the Vanadium Price is equal to or more than US$35/kgV but less than US$40/kgV, an amount equal to 0.58% of ZAR150,000,000; and
If the Vanadium Price is equal to or more than US$40/kgV, an amount equal to 0.62% of ZAR150,000,000.
The loan is repayable in full on the maturity date, which is the first of:
• The date on which the lender gives a step-in notice (this is when an event of default continues for more than 30 days); or
• The date on when the Vanchem and Mokopane Acquisition have been fully implemented; or
• First anniversary of the advance date (22 September 2024).
The loan is secured by a Mortgage Bond of ZAR750 million over the movable property of Vanchem and Notarial Bond of ZAR750 million over the
immovable property of Vanchem.
The Group incurred transaction costs of US$0.41 million which have been capitalised and offset against the carrying amount of the loan and are
being amortised using the effective interest rate method.
INDUSTRIAL DEVELOPMENT CORPORATION SHAREHOLDER LOAN
Bushveld Electrolyte Company (“BELCO”) is 55% owned by Bushveld Energy Company (“BEC”) and 45% by the Industrial Development Corporation
(“IDC”). The loan represents the IDC’s contribution to BELCO and consists of the initial capitalised cost of ZAR4.38 million (US$0.24 million;
31 December 2022: ZAR4.38 million (US$0.26 million)) and the subsequent subscription amount of ZAR72.71 million (US$3.91 million;
31 December 2022: ZAR55.31 million (US$3.26 million)).
The loan is interest free, unsecured, subordinated in favour of BELCO’s creditors and has no fixed term of repayment and shall only be repaid from
free cash flow when available. BELCO has the unconditional right to defer settlement until it has sufficient free cash flow to settle the outstanding
amount, which is estimated at the end of 2028. The loan has been classified as non-current.
92
Annual Report and Financial Results 2023 28. BORROWINGS CONTINUED
The shareholder loan is measured at the present value of the future cash payments discounted using an interest rate of 8.5%, which is the
estimated prevailing market rate. The difference between the fair value and the nominal amount of US$0.43 million (31 December 2022:
US$1.79 million) was recognised as a capital contribution from the non-controlling interest.
A general notarial bond for a minimum amount of ZAR140 million plus an additional sum of 30% for ancillary costs and expenses was registered
over all the movable assets owned by BELCO.
INDUSTRIAL DEVELOPMENT CORPORATION PROPERTY, PLANT AND EQUIPMENT LOAN
The IDC provided a property, plant and equipment loan to BELCO as part of the funding for the construction of the electrolyte plant. The loan bears
interest at the South African prime rate plus 2.5% margin and is repayable in 84 equal monthly installments starting in July 2024.
DEVELOPMENT BANK OF SOUTHERN AFRICA – FACILITY AGREEMENT
Lemur Holdings Limited entered into a US$1.0 million facility agreement with the Development Bank of Southern Africa Limited in March 2019.
The purpose of the facility is to assist with the costs associated with delivering the key milestones to the power project. The repayment is subject
to the successful bankable feasibility study of the project at which point the repayment would be the facility value plus an amount equal to an
Internal Rate of Return (“IRR”) of 40% capped at 2.5 times, which ever is lower. As at 31 December 2023, US$1.0 million (31 December 2022:
US$1.0 million) was drawn down.
PRIMORIUS
The Company issued a convertible loan note to Primorus for the nominal amount of £1.20 million bearing interest at 10% per annum. The
convertible loan note may be converted into Bushveld ordinary shares at any time within the conversion period (the six conversion periods being:
28 February 2022 to 14 April 2022; 15 April 2022 to 14 July 2022; 15 July 2022 to 14 October 2022; 15 October 2022 to 16 January 2023;
17 January 2023 to 14 April 2023; 15 April 2023 to 14 July 2023) at a conversion price of £0.098987. Primorus converted £0.41 million of the
principal amount and was issued a total of 4,157,645 Bushveld ordinary shares.
The Company and Primorus agreed on 14 July 2023 to amend the terms of repayment whereby the Company will make the following payments:
• An initial payment of US$150,000, followed by bi-weekly payments of US$125,000 with the final payment to be made prior to the 30 November
2023.
The Company settled the outstanding amount.
NESA INVESTMENT HOLDINGS (“NESA”)
The Group entered into a loan agreement with Nesa to fund US$0.81 million (ZAR12.08 million) bearing interest at South African prime rate plus
3.5% margin. The maturity date of the loan was extended from 30 August 2023 to 30 August 2024 and the repayments will consist of the following:
• Accrued interest up to 31 August 2023 repaid on 31 August 2023;
• ZAR2.00 million capital repayment on 21 September 2023; and
• Thereafter 10 consecutive monthly payments starting from 30 November 2023.
The Group entered into a second loan agreement with Nesa to fund US$0.54 million (ZAR10.0 million) bearing interest at South African prime rate
plus 4% margin. The maturity date of the loan was extended to 31 August 2026 and the repayments will consist of the following:
• Accrued interest up to 31 October 2023 repaid on 31 October 2023;
• ZAR0.53 million capital and interest repayment on 30 November 2023; and
• Thereafter 11 consecutive quarterly payments starting from 29 February 2024.
29. LEASE LIABILITIES
Figures in thousands of US$
Balance, beginning of the year
Additions
Finance cost
Payments
Exchange differences
Balance, end of the year
Non-current lease liabilities
Current lease liabilities
Notes
9
2023
7,282
1,762
724
(703)
(637)
8,428
7,746
682
8,428
Leases are entered into and exist to meet specific business requirements, considering the appropriate term and nature of the leases asset.
The Group leases relate to land leases, office leases and equipment lease.
2022
4,485
2,989
974
(728)
(438)
7,282
6,721
561
7,282
93
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. LEASE LIABILITIES CONTINUED
EXTENSION OPTIONS
Some property leases contain extension options exercisable by the Group. The Group assesses at the lease commencement date whether it is
reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise its options if there is a
significant event or significant changes within its control.
30. TRADE AND OTHER PAYABLES
Figures in thousands of US$
Financial liabilities:
Trade payables
Trade payables – related parties
Accruals and other payables
Non-financial liabilities:
Value-added taxes
Financial liabilities and non-financial liabilities components of trade and other payables
At amortised cost
Non-financial instruments
2023
2022
41,784
10
4,461
40,573
61
5,257
40
5
46,295
45,896
46,255
40
46,295
45,891
5
45,896
Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for
trade purchases is 120 days.
The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms. No interest has
been charged by any suppliers as a result of late payment of invoices during the year.
The directors consider that the carrying amount of trade and other payables is approximate to their fair value.
The total trade and other payables denominated in South African Rand amount to US$33.73 million (2022: US$29.78 million).
31. PROVISIONS
RECONCILIATION OF PROVISIONS – 2023
Figures in thousands of US$
Leave pay
Other
RECONCILIATION OF PROVISIONS – 2022
Figures in thousands of US$
Leave pay
Performance bonus
Other
Opening
balance
1,588
126
1,714
Additions
Utilised during
the year
Exchange
differences
10
467
477
(98)
–
(98)
(136)
(13)
(149)
Opening
balance
Additions
Utilised during
the year
Exchange
differences
1,629
1,923
170
3,722
80
–
–
80
(40)
(1,923)
(13)
(1,976)
(81)
–
(31)
(112)
Total
1,364
580
1,944
Total
1,588
–
126
1,714
LEAVE PAY
Leave pay represents employee leave days due multiplied by their cost to the company employment package.
OTHER
The other provisions represents estimates for retrenchment costs.
94
Annual Report and Financial Results 2023 32. NON-CONTROLLING INTEREST
Selected summarised financial information of subsidiaries that have material non-controlling interest are provided below:
Figures in thousands of US$
Bushveld Vametco Holdings
Percentage of voting rights held by non-controlling interest
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Revenues
Net earnings/(loss) for the year
Net earnings/(loss) attributable to non-controlling interest
Net cash generated from/(used in) operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
2023
2022
–
–
–
–
–
–
83,727
2,396
623
(5,027)
(3,111)
–
(8,138)
26%
85,598
80,228
(25,517)
(45,311)
94,998
117,226
21,401
5,564
14,270
(10,649)
(6,020)
(2,398)
The Company acquired the 26% interest in Bushveld Vametco Holdings on 20 December 2023 (see note 23).
33. FINANCIAL INSTRUMENTS
The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the
Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented
throughout these consolidated financial statements.
33.1. CATEGORIES OF FINANCIAL INSTRUMENTS
PRINCIPAL FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
• Trade and other receivables
• Cash and cash equivalents
• Restricted investments
• Trade and other payables
• Borrowings
• Other financial assets
• Lease liabilities
• Deferred consideration
The Group holds the following financial assets and financial liabilities:
Figures in thousands of US$
Financial assets at amortised cost
Trade and other receivables
Restricted investment
Cash and cash equivalents
Financial assets at fair value
Other financial assets at fair value through profit or loss
Total financial assets
Financial liabilities at amortised cost
Trade and other payables
Borrowings
Lease liabilities
Financial liabilities at fair value
Borrowings – derivative liability
Deferred consideration
Total financial liabilities
2023
2022
21,916
2,881
1,281
26,078
24
26,102
46,255
98,575
8,428
5,912
2,710
10,874
19,496
3,075
22,571
45,891
83,098
7,282
153,258
136,271
–
2,610
2,610
32
2,428
2,460
155,868
138,731
95
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
33. FINANCIAL INSTRUMENTS CONTINUED
33.2. GENERAL OBJECTIVES, POLICIES AND PROCESSES
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. The Board receives reports
through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness
and flexibility. Further details regarding these policies are set out below:
33.3. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising returns to shareholders.
In order to maintain or adjust the capital structure, the Group may issue new shares or arrange debt financing. At 31 December 2023, the Group
had borrowings of US$98.58 million (2022: US$83.13 million).
The capital structure of the Group consists of cash and cash equivalents, equity and borrowings. Equity comprises of issued capital and
retained income.
Figures in thousands of US$
Cash and cash equivalents
Borrowings
Equity
2023
1,281
98,575
810
100,666
2022
10,874
83,130
105,631
199,635
The Group is not subject to any externally imposed capital requirements.
33.4 PRICE RISK
The Group’s exposure to commodity price risk is dependent on the fluctuating price of the various commodities that it mines, processes and sells.
The average market price of each of the following commodities was:
Vametco
Ferro Vanadium (FEV)
Nitrovan (NV)
Ammonium Metavanadate (AMV)
Modified Vanadium Oxide (MVO)
Vanchem
Vanadium Pentoxide Flake (FVP)
Vanadium Pentoxide Chemical (VCM)
Sodium Ammonium Vanadate (SAV)
Ammonium Metavanadate (AMV)
Ferro Vanadium (FEV)
Vanadyl Oxalate Solution (VOX)
Potassium Metavanadate
2023
US$/kgV
–
36.39
–
28.69
2023
US$/kgV
29.15
31.15
42.91
23.11
31.69
188.30
29.45
2022
US$/kgV
50.17
44.45
30.05
–
2022
US$/kgV
31.82
35.85
55.07
52.80
35.73
197.79
42.41
If the average price of each of these commodities increased/decreased by 10%, assuming the same levels of production, the total sales related
to each of these commodities would have increased/decreased as follows:
Effect on
2023
net loss
Figures in
thousands of US$
Effect on
2023
revenue
–
8,505
–
13
8,518
–
6,123
–
10
6,133
Effect on
2022
revenue
358
11,568
81
–
12,007
Effect on
2022
net loss
258
8,329
58
–
8,645
Vametco (Figures in thousands of US$)
Ferro Vanadium (FEV)
Nitrovan (NV)
Ammonium Metavanadate (AMV)
Modified Vanadium Oxide (MVO)
96
Annual Report and Financial Results 2023 33. FINANCIAL INSTRUMENTS CONTINUED
Vanchem (Figures in thousands of US$)
Vanadium Pentoxide Flake (FVP)
Vanadium Pentoxide Chemical (VCM)
Sodium Ammonium Vanadate (SAV)
Ammonium Metavanadate (AMV)
Ferro Vanadium (FEV)
Vanadyl Oxalate Solution (VOX)
Potassium Metavanadate
Effect on
2023
revenue
Effect on
2023
net loss
Effect on
2022
revenue
Effect on
2022
net loss
1,175
514
116
73
2,524
48
116
4,566
858
375
85
53
1,842
35
85
3,333
494
329
182
34
2,391
63
157
3,650
356
237
131
25
1,721
45
113
2,628
33.5. LIQUIDITY RISK
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Ultimate responsibility for liquidity
risk management rests with the Board. The Board manages liquidity risk by regularly reviewing the Group’s gearing levels, cash-flow projections
and associated headroom and ensuring that excess banking facilities are available for future use. The Group maintains good relationships with its
banks and lenders, which have high credit ratings and its cash requirements are anticipated via the budgetary process.
At 31 December 2023, the Group had US$1.28 million (2022: US$10.87 million) of cash and cash equivalents. At 31 December 2023, the Group
had borrowings of US$98.58 million (2022: US$83.13 million), lease liabilities of US$8.43 million (2022: US$7.28 million) and trade and other
payables of US$46,30 million (2022: US$45.90 million).
2023 (Figures in thousands of US$)
*Orion PFA
Orion CLN
SPR interim working capital facility
IDC shareholder loan
IDC property, plant and equipment loan
Development Bank of South Africa
Other
Lease liabilities
Trade and other payables
2022 (Figures in thousands of US$)
*Orion PFA
Orion CLN
IDC shareholder loan
IDC property, plant and equipment loan
Development Bank of South Africa
Other
Lease liabilities
Trade and other payables
Carrying
amount
35,635
46,766
7,812
2,664
3,574
1,000
1,124
8,428
46,255
Contractual
cash flows
135,482
47,154
8,944
4,148
5,981
1,000
1,270
22,752
46,255
Carrying
amount
Contractual
cash flows
35,146
39,742
1,999
3,481
1,000
1,762
7,282
45,891
139,795
46,585
3,515
5,725
1,000
1,794
22,577
45,891
<1 year
4,130
47,154
8,944
–
427
1,000
889
750
46,255
<1 year
4,181
46,585
–
477
–
1,794
704
45,891
1-2 years
3-4 years
>4 years
8,748
–
–
–
1,709
_–
381
1,048
–
8,951
–
–
–
1,709
–
–
1,596
–
1-2 years
3-4 years
8,626
–
–
1,636
1,000
–
901
–
8,833
–
–
1,636
–
–
1,348
–
113,653
–
–
4,148
2,136
–
–
19,358
–
>4 years
118,155
–
3,515
1,976
–
–
19,624
–
*
The contractual cash flows are based on estimated principal and interest payments calculated as the sum of the gross revenue rate multiplied by the gross revenue for the quarter and the
unit rate multiplied by the aggregate amount of vanadium sold for the quarter.
33.6. CREDIT RISK
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.
The maximum amount of credit risk is equal to the balance of cash and cash equivalents, restricted investments, trade and other receivables
and other financial assets.
Credit risk is managed on a Group basis. Credit verification procedures are undertaken for all customers with whom we trade on credit. Otherwise,
if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience
and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The compliance with
credit limits by customers is regularly monitored by line management.
Trade account receivables comprise a limited customer base. Ongoing credit evaluation of the financial position of customers is performed and
granting of credit is approved by directors.
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Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
33. FINANCIAL INSTRUMENTS CONTINUED
The Group holds cash and cash equivalents and restricted investments in creditworthy financial institutions that comply with the Company’s credit
risk parameters. The Group has a significant concentration of cash held on deposit with large banks in South Africa, Mauritius, United States of
America and the United Kingdom with A ratings and above (Standards and Poors).
The concentration of credit risk by currency was as follows:
Figures in thousands of US$
Pound Sterling
Euro
South African Rand
United States Dollar
2023
436
4
785
56
2022
20
–
6,702
4,152
1,281
10,874
IMPAIRMENT OF FINANCIAL ASSETS
The Group’s only financial assets that are subject to the expected credit loss model are third-party trade receivables.
The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade
receivables and contract assets.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of sales over a period of 36 month before 31 December 2023 and the corresponding
historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on
macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment
rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based
on expected changes in these factors.
On that basis, the loss allowance as at 31 December 2023 and 31 December 2022 was determined as follows for trade receivables:
Subsidiary – 2023 (Figures in thousands of US$)
Bushveld Vametco Alloys (Pty) Ltd
Bushveld Vametco Limited
Bushveld Vanchem (Pty) Ltd
Ivanti Resources (Pty) Ltd
Other Group Companies
Subsidiary – 2022 (Figures in thousands of US$)
Bushveld Vametco Alloys (Pty) Ltd
Bushveld Vanchem (Pty) Ltd
Ivanti Resources (Pty) Ltd
Bushveld Energy Company (Pty) Ltd
Expected credit
loss rate
Gross carrying
amount
Loss allowance
0.22%
–%
0.99%
1.07%
81.08%
1,183
1,760
4,409
156
82
7,590
3
–
45
2
66
116
Expected credit
loss rate
Gross carrying
amount
Loss allowance
0.15%
0.27%
7.74%
100.00%
1,135
1,487
121
63
2,806
2
4
9
63
78
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a
period of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously
written off are credited against the same line item. There were no impairment losses on trade receivables for the 2023 and 2022 financial year.
98
Annual Report and Financial Results 2023 33. FINANCIAL INSTRUMENTS CONTINUED
33.7. INTEREST RATE RISK
Interest rate risk is the risk that the fair values and future cash flows of the Group’s financial instruments will fluctuate because of changes in market
interest rates. The Group has interest bearing financial assets and borrowings. As part of the process of managing the Group’s interest rate risk,
interest rate characteristics of new borrowings and the refinancing of existing borrowings are positioned according to expected movements in
interest rates.
As at 31 December 2023, the majority of the Groups’ borrowings was at fixed rates. A one percent increase or decrease in the interest rates would
result in a nominal increase or decrease in the Group’s earnings in respect of borrowings held at variable rates. There was no significant change
in the Group’s exposure to interest rate risk during the year ended 31 December 2023.
33.8. FOREIGN EXCHANGE RISK
The presentation currency of the Group is United States Dollar and the functional currency of its major subsidiaries are South African Rand.
The Group has foreign currency denominated assets and liabilities. Exposure to exchange rate fluctuations therefore arise. The Group has
transactional foreign exchange exposures, which arise from sales or purchases by the subsidiaries in currencies other than their functional currency.
The vanadium market is predominately priced in US$ which exposes the Group to the risk of fluctuations in the ZAR:USD exchange rate. The carrying
amount of the Groups foreign currency denominated monetary assets and liabilities, all in US$, are shown below:
Figures in thousands of US$
Cash and cash equivalents
Trade and other receivables
Trade and other payables
2023
2022
1,224
23,214
(36,888)
(12,450)
6,723
11,226
(32,652)
(14,703)
The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.
33.9. FAIR VALUE
The fair value hierarchy categorises into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives
the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to
unobservable inputs (Level 3 inputs).
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities which the entity can access at the measurement date.
• Level 2 inputs are inputs other than quoted prices included within Level 1 which are observable for the asset or liability, either directly or indirectly
such as those derived from prices.
• Level 3 inputs are unobservable inputs for the asset or liability.
There have been no changes in the classification of the financial instruments in the fair value hierarchy.
(A) FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS
2023 (Figures in thousands of US$)
Assets
Other financial assets
Liabilities
Derivative liability – conversion option on Orion CLN
Deferred consideration
2022 (Figures in thousands of US$)
Assets
Other financial assets
Liabilities
Derivative liability – conversion option on
Orion CLN
Deferred consideration
Carrying
amount
24
–
2,610
Carrying
amount
3,075
32
2,428
Level 1
Level 2
Level 3
–
–
–
–
–
–
Total
fair value
24
–
24
–
2,610
2,610
Level 1
Level 2
Level 3
Total
fair value
–
–
–
–
32
–
3,075
3,075
–
32
2,428
2,428
99
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
33. FINANCIAL INSTRUMENTS CONTINUED
(B) FINANCIAL ASSETS AND LIABILITIES MEASURED AT AMORTISED COSTS
2023
2022
Financial assets (Figures in thousands of US$)
Book value
Fair value
Book value
Fair value
Trade and other receivables
Restricted investments
Cash and cash equivalents
21,916
2,881
1,281
21,916
2,881
1,281
5,912
2,710
10,874
5,912
2,710
10,874
2023
2022
Financial assets (Figures in thousands of US$)
Book value
Fair value
Book value
Fair value
Trade and other payables
46,255
46,255
45,891
45,891
The Directors are of the opinion that the book value of financial instruments measured at amortised costs approximates fair value due to the short-
term maturities of these instruments. The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values.
The Directors consider that sufficient information to understand the borrowings of the Group is disclosed in note 28.
34. CONTINGENT LIABILITIES
BANK GUARANTEE
As required by the Minerals and Petroleum Resources Development Act (South Africa), a guarantee amounting to US$10.91 million (2022: US$11.94
million) before tax and US$7.97 million (2022: US$8.60 million) after tax was issued in favour of the DMRE for the unscheduled closure of the
Bushveld Vametco Alloys mine. This guarantee was issued on condition that a portion be deposited in cash with Centriq Insurance Company Ltd
with restricted use by the Group. The restricted cash consists of US$2.88 million (2022: US$2.71 million) held by Centriq Insurance Company.
35. RELATED PARTIES
RELATIONSHIPS
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note.
VM Investment Company (Pty) Ltd (“VM Investments”) is a related party due to the former Director, Fortune Mojapelo, being majority shareholder
of VM Investments. VM Investments owns the offices rented by Bushveld Minerals Limited. The rent paid in 2023 financial period was US$144,237
(2022: US$206,209). The outstanding balance owned to VM Investments was US$nil as at 31 December 2023.
The Company paid on behalf of Mr Fortune Mojapelo, tax on historic shares to the value of US$351,649. The tax arises from historic shares issued
to Mr Mojapelo. The Company had an obligation to settle the tax on behalf of Mr Fortune Mojapelo. The amount was previously reflected as a debtor
but was written-off during the year as the Company agreed the amount is not repayable.
The remuneration of key management personnel, being the Directors and other Executive Committee members, is set out below. Further
information about the remuneration of individual directors is provided in the Directors’ Remuneration Report.
2023
1,911
32
(107)
1,836
2022
1,866
95
107
2,068
Figures in thousands of US$
Salaries and fees
Short-term incentives
Long-term incentives
100
Annual Report and Financial Results 2023 36. EVENTS AFTER THE REPORTING PERIOD
ORION MINE FINANCE CONVERTIBLE LOAN NOTE REFINANCING
The Company completed the refinancing of its convertible loan notes issued to Orion Mine Finance on 31 January 2024. The convertible debt
obligations were refinanced as follows:
• US$4.7 million of the convertible debt obligations were capitalised into a subscription for 124,747,016 new ordinary shares;
• A new convertible loan note of US$14.1 million maturing on 30 June 2028;
• A term senior loan of US$28.3 million maturing on 30 June 2026; and
• Supplemental royalty at not more than 0.264% of the Group’s gross revenues and reducing by 80% at the term loan maturity.
In June 2024, the Company entered into revised agreements with Orion Mine Finance whereby the Company will receive additional funding of up
to US$10 million under the term senior loan facility. The repayment of interest and capital on the term senior loan was also amended whereby the
repayment of both interest and capital will only start on 31 December 2025 and will consist of equal quarterly instalments with the final payment
on 31 December 2029. The drawdown of the additional facility is subject to SARB approval.
In addition to the changes in the term senior loan, the supplemental royalty agreement was also amended to increase the royalty rate from 0.264%
up to 0.5% depending on the amount of the additional drawdown on terms senior loan facility and reducing by 50% at the term loan maturity.
SALE OF VANCHEM
The Group has entered into a binding term sheet with SPR to conditionally sell the entire Vanchem asset for a total consideration of up to US$41.3
million, comprising an initial consideration of up to US$21.3 million and a deferred consideration of between US$15 million and US$20 million
(the “Disposal”). The proposed terms of the Disposal replace those announced on 20 November 2023 for the sale of a 50% interest in Vanchem.
The Disposal is conditional upon consent of Orion and Competition Commission approval. The shareholders approved the Disposal on 31 May
2024. The Disposal is expected to close in the second half of 2024.
The Vanchem CGU was written-down to its recoverable amount during the year (see note 14). As at 31 December 2023, the Vanchem asset did not
meet the criteria for held for sale accounting in line with IFRS 5. Following the closing of the Disposal, the assets and liabilities of Vanchem will be
derecognised and no longer form part of the consolidated results of the Group.
101
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW SUPPLEMENTARY INFORMATION
102
Annual Report and Financial Results 2023 Supplementary
Information
CONTENTS
104 Mineral Resources and Reserves
109 Notice of Annual General Meeting
113 Company information
103
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW MINERAL RESOURCES AND RESERVES
DEFINITION
Mineral Resources are the estimated quantities of material with potential for eventual economic extraction from the Group’s properties.
Ore Reserves are a subset of Measured and/or Indicated Mineral Resources that can be demonstrably extracted, economically and legally.
Measured/Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical
characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to
support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing
of information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough for geological and grade continuity to be reasonably assumed.
Ore Reserves are declared for open pits inside the life-of-mine pit design (the optimised pit shell in this instance), which include the dilution
of materials and allowances for losses which may occur when the material is mined or extracted. They are defined by studies at pre-feasibility
or feasibility level, as appropriate, and include the application of modifying factors. Those studies demonstrate that, at the time of reporting,
extraction could reasonably be justified (JORC, 2012). Ore Reserves are declared for in-whole rock tonnes in the pits and exclude any stockpiles.
Economic assumptions used to estimate reserves change from one period to another as additional technical and operational data is generated.
BUSHVELD MINERALS: VANADIUM RESOURCE AND RESERVES
VAMETCO MINE
The Vametco Mine is situated about 6.5km north east of the town of Madibeng (formerly known as Brits). It is an operational opencast vanadium
mine, located in the Bojanala Platinum District within the North West Province of the Republic of South Africa.
The operation comprises an open pit mine which supplies ore directly to the vanadium processing plant located on the same property. The open
pit is approximately 3.5km long, in an east-west direction. The vanadium is extracted from magnetite occurring near the basal contact of the Upper
Zone of the Bushveld Igneous Complex. The mine has been in operation since 1967.
MINERAL RESOURCES & ORE RESERVES
The Mineral Resources and Ore Reserves estimates for Vametco Mine reported herein are based on the Competent Person’s depletion statement
prepared by an independent consultancy company, MSA Group, as at 31 December 2023.
KEY HIGHLIGHTS
• The total Ore Reserves have increased by approximately 10% from the previous Ore Reserve estimate as at 31 December 2022. The Ore Reserves
are reported as at 31 December 2023 at 293,400 tonnes V2O5 in magnetite at a grade of 2.00% V2O5 (in magnetite).
• The combined Inferred and Indicated Mineral Resource comprises three seams (the Lower, Intermediate and Upper Seams) and is reported
as at 31 December 2023 at 180.4 million tonnes (Mt) at an average grade of 1.98% V2O5 (in magnetite), with an average magnetite content of
35.0% (in whole rock) for 694.6 thousand tonnes of contained vanadium. The previously reported combined Inferred and Indicated Mineral
Resource, as at 31 December 2022, was 181.5 Mt at an average grade of 1.98% V2O5 (in magnetite), with an average magnetite content
of 35.0% (in whole rock) for 699.0 thousand tonnes of contained vanadium.
• Within this, the Ore Reserve in the Probable Category comprise three seams (the Lower, Intermediate and Upper Seams) and is reported as 51.0 Mt
at an average grade of 2.00% V2O5 (in magnetite), with an average magnetite content of 28.9% (in whole rock) for 164,300 tonnes of vanadium.
• The Lower Seam is the main ore seam and the thickest, ranging from 13.8 to 52.0 metres in thickness, comprising a Probable Reserve of 41.2 Mt
at an average grade of 2.03% V2O5 (in magnetite), with an average magnetite content of 28.2% (in whole rock) for 132,200 tonnes of vanadium.
• The decrease in the total 2023 Mineral Resource, by 0.61% less tonnes than the 31 December 2022 estimate, is attributed to mining of the
seams over the last 12 months. No Mineral Resource exploration was carried out over the period.
• The year-on-year depletion which was calculated to be 1.1 Mt, was offset by an increase in tonnage through improved definition of the existing pit
design (1.7 Mt) and an adjustment to the modifying factors (4.1 Mt), resulting in an increase in the total Ore Reserves from 46.4 Mt to 51.0 Mt as
at 31 December 2023. The Ore Reserve modifying factors (mining loss and dilution) were adjusted based on pit to plant reconciliation production
data supplied by Bushveld Vametco Alloys (Pty). Ltd. This resulted in a significant increase in the Upper Seam ore tonnes from 36.2 Mt to 41.2 Mt.
104
Annual Report and Financial Results 2023 TABLE 1: VAMETCO MINERAL RESOURCE AT A CUT-OFF GRADE OF 20% MAGNETITE, AS AT 31 DECEMBER 2023
Class
Indicated
Inferred
Indicated and Inferred
Seam Name
Upper
Intermediate
Lower
Total
Upper
Intermediate
Lower
Total
Upper
Intermediate
Lower
Total
Tonnes
(Millions)
V2O5 grade of
whole rock
%
Magnetite grade
of whole rock
%
V2O5 grade in
magnetite
%
Tonnes V2O5 in
magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
5.3
27.3
105.3
137.9
10.1
7.0
25.4
42.5
15.4
34.4
130.6
180.4
1.44
0.67
0.72
0.74
1.46
0.67
0.74
0.90
1.45
0.67
0.72
0.77
65.9
32.9
32.4
33.7
63.6
32.1
31.3
39.1
64.4
32.7
32.1
35.0
1.78
1.91
2.03
2.00
1.75
1.92
2.00
1.93
1.76
1.91
2.03
1.98
61.7
171.3
692.7
925.7
112.9
43.4
158.4
314.7
174.6
214.7
851.1
1,240.4
34.6
95.9
387.9
518.4
63.2
24.3
88.7
176.2
97.8
120.2
476.6
694.6
Notes:
1 All tabulated data have been rounded and as a result minor computational errors may occur.
2 Mineral Resources which are not Ore Reserves have no demonstrated economic viability.
3 Mineral Resources are inclusive of Ore Reserves (not indicated in the table).
4 Magnetite content (grade) is determined as the proportion of magnetite concentrate recovered using Davis Tube methodology.
5 Due to the magnetite grade being a recovered grade, differences will occur between whole rock V2O5 grades back-calculated from concentrate, versus those derived from whole rock assays.
6 Depleted using the 31 December 2023 pit survey.
7 Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 100%.
TABLE 2: VAMETCO MINERAL RESOURCE AT A CUT-OFF GRADE OF 20% MAGNETITE, 31 DECEMBER 2023 VERSUS 31 DECEMBER 2022
Class
Seam Name
Tonnes
(Millions)
Indicated
Inferred
Upper
Intermediate
Lower
Total
Upper
Intermediate
Lower
Total
Indicated
and
Inferred
Upper
Intermediate
Lower
Total
5.3
27.3
105.3
137.9
10.1
7.0
25.4
42.5
15.4
34.4
130.6
180.4
V2O5
grade of
whole
rock
%
Magnetite
grade of
whole
rock
%
V2O5
grade in
magnetite
%
Tonnes V2O5
in magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
Tonnes
(Millions)
V2O5
grade of
whole
rock
%
Magnetite
grade of
whole
rock
%
V2O5
grade in
magnetite
%
Tonnes V2O5
in magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
1.44
0.67
0.72
0.74
1.46
0.67
0.74
0.90
1.45
0.67
0.72
0.77
31 December 2023
31 December 2022
65.9
32.9
32.4
33.7
63.6
32.1
31.3
39.1
64.4
32.7
32.1
35.0
1.78
1.91
2.03
2.00
1.75
1.92
2.00
1.93
1.76
1.91
2.03
61.7
171.3
692.7
925.7
112.9
43.4
158.4
314.7
174.6
214.7
851.1
34.6
95.9
387.9
5.4
27.6
105.9
518.4
139.0
63.2
24.3
88.7
176.2
97.8
120.2
476.6
10.2
7.0
25.4
42.6
15.5
34.7
131.3
1.98
1,240.4
694.6
181.5
1.44
0.67
0.72
0.74
1.46
0.67
0.74
0.90
1.45
0.67
0.72
0.77
65.9
32.9
32.4
33.8
63.6
32.1
31.3
39.1
64.4
32.7
32.1
35.0
1.78
1.91
2.03
2.00
1.75
1.92
2.00
1.93
1.76
1.91
2.03
62.7
173.1
697.2
933.0
113.3
43.4
158.4
315.2
176.0
216.5
855.6
1.98
1,248.2
35.1
97.0
390.4
522.5
63.5
24.3
88.7
176.5
98.6
121.3
479.2
699.0
Notes:
1 All tabulated data have been rounded and as a result minor computational errors may occur.
2 Mineral Resources which are not Ore Reserves have no demonstrated economic viability.
3 Mineral Resources are inclusive of Ore Reserves (not indicated in the table).
4 Magnetite content (grade) is determined as the proportion of magnetite concentrate recovered using Davis Tube methodology.
5 Due to the magnetite grade being a recovered grade, differences will occur between whole rock V2O5 grades back-calculated from concentrate, versus those derived from whole rock assays.
6 2022 depletion as at 31 December 2022.
7 2023 depletion as at 31 December 2023.
8 Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 100%.
105
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW MINERAL RESOURCES AND RESERVES CONTINUED
TABLE 3: VAMETCO ORE RESERVES, 31 DECEMBER 2023 – GROSS BASIS
Class
Probable
Seam Name
Upper
Intermediate
Lower
Total
Tonnes
(Millions)
1.8
8.0
41.2
51.0
V2O5 grade of
whole rock
%
Magnetite grade
of whole rock
%
V2O5 grade in
magnetite
%
Tonnes V2O5 in
magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
1.15
0.57
0.62
0.63
53.5
26.8
28.2
28.9
1.77
1.87
2.03
2.00
17.3
39.9
236.2
293.4
9.7
22.4
132.2
164.3
Notes:
1 All tabulated data have been rounded and as a result minor computational errors may occur.
2 Ore Reserve tonnes and grades reported on dry run of mine (“RoM”) (plant feed) basis after mining modifying factors have been applied but before beneficiation down-stream recoveries/
losses have been applied.
3 Reporting was prepared on a Mineral Resource model developed by MSA.
4 Ore Reserves depleted as at 31 December 2023 using 31 December 2023 pit survey.
5 Ore Reserve estimate was based on a revised pit design completed in September 2022.
6 Ore Reserve modifying factors adjusted by seam based on analysis of pit to plant production information.
7 Ore Reserve estimate depleted using Datamine Studio 5DP Open Pit software and latest topography supplied by Vametco as of 31 December 2023.
8 Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 100%.
TABLE 4: VAMETCO ORE RESERVE AT A CUT-OFF GRADE OF 20% MAGNETITE, 31 DECEMBER 2023 VERSUS 31 DECEMBER 2022 – GROSS BASIS
Class
Seam Name
Tonnes
(Millions)
V2O5
grade of
whole
rock
%
Magnetite
grade of
whole
rock
%
V2O5
grade in
magnetite
%
Tonnes V2O5
in magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
Tonnes
(Millions)
V2O5
grade of
whole
rock
%
Magnetite
grade of
whole
rock
%
V2O5
grade in
magnetite
%
Tonnes V2O5
in magnetite
(Thousands)
Tonnes V in
magnetite
(Thousands)
31 December 2023
Probable
Upper
Intermediate
Lower
Total
1.8
8.0
41.2
51.0
1.15
0.57
0.62
0.63
53.5
26.8
28.2
28.9
1.77
1.87
2.03
2.00
17.3
39.9
236.2
293.4
9.7
22.4
132.2
164.3
1.9
8.3
36.2
46.4
1.07
0.57
0.62
0.63
31 December 2022
50.2
26.7
28.1
28.7
1.77
1.87
2.03
1.99
16.7
41.3
206.7
264.6
9.3
23.1
115.7
148.2
Notes:
1 All tabulated data have been rounded and as a result minor computational errors may occur.
2 Ore Reserve tonnes and grades reported on dry RoM (plant feed) basis after mining modifying factors have been applied but before beneficiation down-stream recoveries/losses have been applied.
3 Reporting was prepared on a Mineral Resource model developed by MSA.
4 2022 depletion as at 31 December 2022.
5 2023 depletion as at 31 December 2023.
6 Ore Reserve estimate was based on a revised pit design completed in September 2022.
7 Ore Reserve modifying factors adjusted by seam based on analysis of historical pit to plant production information.
8 Ore Reserve estimate depleted using Datamine Studio 5DP Open Pit software and latest topography supplied by Vametco as of 31 December 2023.
9 Ore Reserve estimate compared to previous depleted Ore Reserves estimate compiled in December 2022.
10 Reported on a Gross Basis. Bushveld Minerals shareholding in Bushveld Vametco Alloys is 100%.
TABLE 5: MML AND MML-HW MINERAL RESOURCES AT A 0.30% V₂O₅ CUT-OFF, ≤120 M DEPTH, AS AT 15 OCTOBER 2017
Width
(m)
Tonnes
(Mt1)
Density
(t/m3)
V2O5
(%)
Fe
(%)
Fe2O3
(%)
TiO2
(%)
SiO2*
(%)
Al2O3*
(%)
P2O5*
(%)
S*
(%)
V2O5
(Kt)
Fe
(Mt)
Layer name
UG-C
UG-A
UMG1
UMG2
MAG1-HW GAB**
MAG1
MAG2
MML-HW
Total
MAG3
PART
MAG4
Total
Mineral
resource
category
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
Inferred
4.04
1.64
3.24
2.03
17.53
1.31
1.10
5.89
31.8
12.7
25.5
15.7
72.3
12.0
9.2
42.3
3.48
3.31
3.30
3.40
3.02
3.96
3.57
3.01
0.64
0.59
0.59
0.69
0.31
1.07
0.83
0.32
25.7
23.2
22.9
25.9
13.1
40.0
30.2
13.4
36.7
33.1
32.7
37.0
18.8
57.1
43.1
19.2
Inferred
36.77 221.5
3.21
0.50
19.8
28.3
Indicated
Indicated
Indicated
4.09
2.16
3.59
27.5
11.4
24.3
4.08
3.16
4.00
1.50
0.58
1.46
45.5
20.9
43.9
Indicated
9.84
63.2
3.85
1.32
40.4
65.1
29.9
62.7
57.8
5.9
5.3
5.4
6.2
2.9
9.7
7.2
2.5
4.4
10.0
3.5
9.3
8.6
5.4
30.2
32.5
32.6
29.4
42.0
15.6
25.1
42.2
15.4
17.5
17.6
16.7
21.9
10.8
15.1
21.6
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.02
0.12
0.01
0.01
0.01
0.12
0.06
0.06
0.11
202.8
75.6
150.4
107.7
223.3
128.7
76.3
136.0
8.2
3.0
5.8
4.1
9.5
4.8
2.8
5.7
35.7
18.9
0.01
0.08 1,100.8
43.8
10.6
34.5
11.8
15.4
31.2
7.8
19.0
8.9
10.2
0.01
0.01
0.01
0.01
0.12
0.17
0.24
0.18
412.5
66.3
354.9
833.7
12.5
2.4
10.7
25.6
17.0
0.01
0.10 1,934.5
69.4
Total Mineral Resources1
46.61 284.8
3.33
0.68
24.4
34.8
Notes:
1 Rounding may cause computational errors; no geological losses applied.
*
** A 0.30% V2O5 cut-off has been applied laterally across this layer, so only material greater than 0.30% V2O5 is included in the tonnage listed in this table.
Included for information purposes only, no value will be derived from these materials.
106
Annual Report and Financial Results 2023 TABLE 6: PROBABLE ORE RESERVES FOR MOKOPANE PROJECT
Orebody
MML Upper (MAG3)
MML Lower (MAG4)
Total/Average*
True thickness
(m)
Specific gravity
(t/m³)
4.09
3.59
7.68
4.08
4.00
4.04*
Tonnes
(millions)
15,342
13,154
28,496
V₂O₅
(%)
1.43
1.39
1.41*
Notes:
Mineral Resource is reported at a 40% Fe2O3 cut-off; no geological losses applied.
*
Included for informative purposes only, no value will be derived from these materials.
TABLE 7: AB ZONE MINERAL RESOURCE AT 0.3% V₂O₅ CUT-OFF, ≤120 M VERTICAL DEPTH, AS AT 15 OCTOBER 2017
Layer name
AB Upper
AB Parting
AB Lower
Total1
Mineral
Resource
category
Inferred
Inferred
Inferred
Inferred
Tonnes
(Mt1)
Thickness
(m)
Density
(t/m3)
2.7
3.7
6.0
12.5
1.93
2.86
4.51
9.30
3.29
3.07
3.21
3.18
V2O5
(%)
0.89
0.48
0.75
0.70
Fe2O3
(%)
34.7
20.9
29.1
27.9
TiO2
(%)
5.4
3.0
4.3
4.2
P2O5*
(%)
0.01
0.01
0.01
0.01
SiO2*
(%)
30.3
40.0
34.6
35.3
Al2O3*
(%)
17.1
19.7
18.6
18.6
S*
(%)
0.06
0.01
0.01
0.02
V2O5
(%)
24.3
17.9
45.1
87.3
Notes:
1 Rounding may cause computational errors; no geological losses applied.
*
Included for informative purposes only, no value will be derived from these materials.
The Mineral Resources and Ore Reserves estimates are based on the Competent Person’s Report prepared by MSA Group as at 15 October 2017.
TABLE 8: N-Q ZONE (WEATHERED + UNWEATHERED) INDICATED MINERAL RESOURCE LESS THAN 200 M DEPTH, AS AT 8 MARCH 2013
Layer name
Q3
Q2
Q1
PMAG
PFWDISS*
OMAG*
NMAG
Total
Tonnes
(millions)
138.63
81.17
26.36
34.44
67.28
2.63
4.58
355.09
Specific
gravity
(g/cm3)
3.61
4.01
3.59
3.62
3.38
4.00
4.41
3.67
Fe
(%)
Fe2O3
(%)
Fe metal
(Mt)
TiO2
(%)
V2O5
(%)
SiO2
(%)
Al2O3
(%)
P2O5
(%)
S
(%)
31.7
41.9
32.5
32.4
26.9
37.2
48.7
45.4
59.9
46.6
46.3
38.5
53.2
69.6
43.99
34.00
8.58
11.15
18.13
0.98
2.23
10.2
15.2
10.5
10.1
7.1
11.1
16.0
33.51
47.65
119.06
10.85
0.13
0.28
0.28
0.29
0.22
0.49
0.56
0.22
25.2
12.6
22.3
21.3
30.1
18.5
6.9
22.37
9.9
6.5
9.9
10.5
12.8
7.9
5.3
9.66
0.06
0.02
0.02
0.03
0.03
0.01
0.03
0.05
0.40
0.27
0.27
0.80
0.33
0.12
0.11
0.38
*
Layer reported at a 35% Fe₂O₃ cut-off; no geological losses applied.
TABLE 9: N-Q ZONE (UNWEATHERED) INFERRED MINERAL RESOURCE, 200 M TO 400 M DEPTH, AS AT 8 MARCH 2013
Layer Name
Q3
Q2
Q1
PMAG
PFWDISS*
OMAG*
NMAG
Total
Tonnes
(millions)
Density
(t/m3)
Fe
(%)
Fe2O3
(%)
Fe metal
(Mt)
TiO2
(%)
V2O5
(%)
SiO2
(%)
Al2O3
(%)
P2O5
(%)
S
(%)
139.03
92.64
23.42
38.28
76.51
1.87
7.22
378.97
3.59
3.99
3.64
3.58
3.37
3.77
4.32
3.66
30.2
40.2
32.7
30.6
26.8
32.4
46.3
43.3
57.5
46.8
43.7
38.3
46.3
66.2
42.05
37.27
7.66
11.70
20.49
0.61
3.34
8.8
14.1
10.8
9.8
6.9
9.5
15.6
32.47
46.47
123.12
10.07
0.09
0.23
0.27
0.26
0.21
0.40
0.49
0.19
28.3
15.3
22.2
23.5
30.2
23.1
8.3
10.3
7.6
10.6
11.5
12.8
10.4
5.8
24.24
10.20
0.13
0.02
0.02
0.04
0.03
0.02
0.02
0.06
0.61
0.55
0.36
0.74
0.43
0.10
0.14
0.55
*
Layer reported at a 35% Fe2O3 cut-off; no geological losses applied.
107
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW MINERAL RESOURCES AND RESERVES CONTINUED
TABLE 10: P-Q ZONE INFERRED MINERAL RESOURCE, SURFACE TO 300 M VERTICAL DEPTH AT A 35% FE₂O₃ CUT-OFF FOR THE FARMS SCHOONOORD 786LR AND BELLEVUE 808LR,
AS AT 15 OCTOBER 2017
Layer Name
Q3
Q2
Q1
PMAG
PFWDISS*
Total
Tonnes
(millions)
Density
(t/m3)
Fe
(%)
Fe2O3
(%)
Fe metal
(Mt)
TiO2
(%)
V2O5
(%)
SiO2
(%)
75.3
85.5
13.1
19.7
27.3
220.8
3.77
4.14
3.82
3.52
3.45
3.85
34.3
42.6
36.4
27.6
27.8
36.2
49.1
60.9
52.1
39.5
39.8
51.9
25.82
36.40
4.76
5.45
7.60
80.03
10.5
14.9
12.2
8.3
8.0
11.8
0.10
0.26
0.30
0.23
0.22
0.20
23.0
13.1
19.1
29.1
28.3
20.1
Al2O3
(%)
9.4
6.9
9.8
12.4
12.9
9.2
P2O5
(%)
0.28
0.03
0.03
0.06
0.06
0.12
S
(%)
0.55
0.50
0.46
1.00
0.55
0.57
*
Layer reported at a 35% Fe2O3 cut-off; no geological losses applied.
THE PQ PHOSPHATE PROJECT MINERAL RESOURCES
The PQ Phosphate Project resource lies immediately above the iron ore and titanium resource of the PQ Project. The Company reported on 3 June
2014, a maiden phosphate resource statement for the PQ deposit of 442 Mt, with average phosphate grades of 3.6% P₂O₅ as shown in Table 13.
Although the grades are low, the PQ Phosphate deposit is in the immediate hanging wall of the PQ Project and would be mined concurrently with
the stripping of the latter. Of particular interest is that laboratory-scale test work has shown that 37% P₂O₅ concentrate grades are achievable from
this deposit.
Figures are based on the Competent Person’s Report prepared by MSA Group as at 15 October 2017.
TABLE 11: INFERRED MINERAL RESOURCE OF PHOSPHATE ZONE AT A THREE PERCENT P₂O₅ CUT-OFF, AS AT 15 OCTOBER 2017
Farm
Vliegekraal
Malokong
Schoonoord
Bellevue
Total1
Tonnes
(millions)
330.0
1.8
104.9
5.0
441.6
P2O5
(%)
3.6
3.2
3.6
3.6
3.6
Fe2O3
(%)
32.1
35.5
34.1
34.4
32.6
S*
(%)
0.39
0.37
0.40
0.41
0.39
SiO2*
(%)
34.0
35.4
33.0
33.3
33.7
*CaO*
(%)
Density
(t/m³)
9.1
8.6
8.8
8.9
9.0
3.30
3.27
3.37
3.36
3.32
1 All tabulated data has been rounded and as a result minor computational errors may occur.
LEMUR HOLDINGS LIMITED
The Mineral Resource estimates are based on the Competent Person’s Report prepared by Sumsare Consulting Group CC as at 26 April 2023.
TABLE 12: RESOURCE FOR THE IMALOTO COAL PROJECT
Gross
Mineable (SAMREC 2016)
Net attributable (99%)
Operator
Category
Raw coal quality (ADB)
Raw coal quality (ADB)
Raw coal quality (ADB)
Coal Resource per asset
Measured
Indicated
Inferred
Indicated and Inferred
Total
Tonnes
(millions)
90.448
41.206
8.733
49.939
140.387
Ash
(%)
CV
(MJ/Kg)
MTIS
(Mt)
Ash
(%)
CV
(MJ/kg)
Tonnes
(millions)
Ash
(%)
CV
(MJ/kg)
33.5
37.0
36.6
36.9
34.7
19.26
17.66
18.42
17.79
76.500
33.274
6.637
39.911
18.74
116.411
33.5
37.0
36.6
36.9
34.7
19.26
17.66
18.42
17.79
75.735
32.941
6.571
39.512
18.75
115.247
33.5
37.0
36.6
36.9
34.7
19.26
17.66
18.42
17.79
18.75
Lemur Holdings
Limited
108
Annual Report and Financial Results 2023 NOTICE OF ANNUAL GENERAL MEETING
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to what action you should take, you are recommended to seek your own financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial advisor who specialises in advising on shares or other securities and who is,
in the case of UK shareholders, authorised under the Financial Services and Market Act 2000.
If you have sold or transferred your shares in Bushveld Minerals Limited, please forward this document at once to the purchaser or transferee or to
the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you have sold or
transferred part of your registered holding of shares, please consult the stockbroker, bank or other agent through whom the sale or transfer was effected.
NOTICE OF ANNUAL GENERAL MEETING
BUSHVELD MINERALS LIMITED
(Incorporated in Guernsey under registered number 54506)
REGISTERED OFFICE:
Oak House, Hirzel Street, St Peter Port,
Guernsey, GY1 3RH.
28 June 2024
Notice is hereby given of an Annual General Meeting of Bushveld Minerals Limited to be held at 12:00 noon on 7 August 2024 at Oak House,
Hirzel Street, St Peter Port, Guernsey, GY1 3RH.
PLEASE READ CAREFULLY – ARRANGEMENTS FOR THE ANNUAL GENERAL MEETING
The Board recognises that travel to Guernsey may not be feasible for the majority of shareholders and so would like to draw the attention of
shareholders to the following:
1. The Company urges shareholders to vote by proxy and to appoint the chairman of the Meeting as their proxy for that purpose. If a shareholder
appoints someone other than the chairman of the meeting as their proxy, that proxy, if not present in Guernsey, may not be able physically to
attend the meeting or cast the shareholder’s vote. All votes on the resolutions contained in this Notice will be held by poll, so that all voting rights
exercised by shareholders who are entitled to do so at the Meeting will be counted.
2. The Board encourages all shareholders to exercise their votes by proxy, and to submit any questions in respect of the Meeting in advance. This
should ensure that your votes are registered in the event that attendance at the Meeting is not possible. Shareholders are encouraged to use the
online voting facilities detailed below where possible rather than submitting a paper proxy card.
3. The arrangements for the Meeting proposed by the Board are subject to constant review and, should they be subject to change, the Company
will update shareholders through a market announcement and will provide further details on the Company’s website. The Board reserves the
right, should it become necessary, to restrict attendance at the Meeting as part of security arrangements pursuant to Article 73.2 of the Articles
of Incorporation of the Company (the “Articles”).
ORDINARY RESOLUTIONS
1. To receive and adopt the Annual Financial Statements of the Company, the Directors’ Report, and the Report of the Auditors for the financial
year ended 31 December 2023.
2. To approve the Directors Fees as reflected in Remuneration Report and in Note 35 of the Annual Financial Statements.
3. That Messrs RSM UK Audit LLP be reappointed as Auditors to the Company.
4. That the Directors be authorised to approve the remuneration of the Company’s Auditors to the Company.
5. That Mirco Bardella shall be re-elected as a Director, having retired by rotation and offered himself for re-election.
6. That Craig Coltman shall be re-elected as a Director, having retired by rotation and offered himself for re-election.
7. The Company be generally and unconditionally authorised for the purposes of Articles 50.3 of the Articles to make on market acquisitions
(as defined in Article 50.5 of the Articles) of Ordinary Shares on such terms and in such manner as the Directors determine provided that:
(i)
(ii) the minimum price (excluding expenses) which may be paid for each Ordinary share is £0.01;
(iii) the maximum price (excluding expenses) which may be paid for any Ordinary Share does not exceed 105% of the average closing price
the maximum aggregate number of Ordinary shares which may be purchased is 231,102,240 Ordinary Shares;
of such shares for the five business days of AIM prior to the date of purchase; and
(iv) this authority shall expire at the conclusion of the next Annual General Meeting of the Company unless such authority is renewed prior
to that time (except in relation the purchase of Ordinary Shares the contract for which was concluded before the expiry of such authority,
in which case such purchase may be concluded wholly or partly after such expiry).
109
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
ORDINARY RESOLUTIONS CONTINUED
8. The Directors of the Company are hereby authorised to exercise all powers of the Company to issue, grant rights to subscribe for, or to convert
any securities into, up to 770,340,802 shares (together “Equity Securities”) in the capital of the Company being approximately one third
of the issued share capital of the Company (excluding treasury shares) in accordance with Article 8.3 of the Articles of Incorporation of the
Company such authority to expire, unless previously renewed, revoked or varied by the Company by ordinary resolution, at the end of the next
Annual General Meeting of the Company or, if earlier, at the close of business on the date falling 15 months from the date of the passing of this
Resolution, but in each case, during this period the Company may make offers, and enter into agreements, which would, or might, require Equity
Securities to be issued or granted after the authority given to the Directors of the Company pursuant to this Resolution ends and the Directors
of the Company may issue or grant Equity Securities under any such offer or agreement as if the authority given to the Directors of the Company
pursuant to this Resolution had not ended. This Resolution is in substitution for all unexercised authorities previously granted to the Directors of
the Company to issue or grant Equity Securities; and
SPECIAL RESOLUTIONS
9. If Resolution 8 is passed, the Directors of the Company be and they are hereby authorised to exercise all powers of the Company to issue or
grant Equity Securities in the capital of the Company pursuant to the issue or grant referred to in Resolution 8 as if the pre-emption rights
contained in Article 9.9 of the Articles of Incorporation of the Company did not apply to such issue or grant provided that: (A) the maximum
aggregate number of Equity Securities that may be issued or granted under this authority is 231,102,240 shares, being approximately 10.0% of
the issued share capital of the Company (excluding treasury shares); and (B) the authority hereby conferred, unless previously renewed, revoked
or varied by the Company by special resolution, shall expire at the end of the next Annual General Meeting of the Company or, if earlier, at the
close of business on the date falling 15 months from the date of the passing of this Resolution, save that the Company may before such expiry
make an offer or agreement which would or might require Equity Securities to be issued or granted after such expiry and the Directors may issue
or grant Equity Securities in pursuance of such an offer or agreement as if the authority conferred by the above resolution had not expired. This
Resolution is in substitution for all unexercised authorities previously granted to the Directors of the Company to issue or grant Equity Securities
in the capital of the Company as if the pre-emption rights contained in Article 9.9 of the Articles of Incorporation of the Company did not apply
to such issue or grant.
By order of the Board
K BREDIN
Company Secretary
28 June 2024
110
Annual Report and Financial Results 2023 NOTICE OF MEETING NOTES:
The following notes explain your general rights as a shareholder and your right to attend and vote at this Meeting or to appoint someone else to vote
on your behalf.
1. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the number of votes they may
cast), shareholders must be registered in the Register of Members of the Company at close of trading on 5 August 2024. Changes to the
Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting.
2. Shareholders are entitled to appoint another person as a proxy as set out below to exercise all or part of their rights to attend and to speak
and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy
is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a
shareholder of the Company, but please note that in accordance with the measures set out above, shareholders are encouraged to appoint
the Chairman of the Meeting as their proxy for the purposes of ensuring that their proxy will be able to attend the Meeting.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most
senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s Register
of Members in respect of the joint holding (the first named being the most senior).
3.
4. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no
voting indication is given, your proxy will vote or abstain from voting at his or her discretion. In the absence of any specific instructions from you,
your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.
5. You can vote either:
• by using the Link Investor Centre app or by logging on to https://investorcentre.linkgroup.co.uk/Login/Login and following the instructions.
This system allows you to appoint a proxy and to instruct your proxy how to vote. If you have note used the service before you will need to
register online, for which you will need your investor code (IVC). In order for a proxy appointment to be made in this way, you will need to
submit your instructions via the Link Investor Centre by 12:00 noon on 5 August 2024;
Link Investor Centre is a free app for smartphone and tablet provided by Link Group (the company’s registrar). It allows you to
securely manage and monitor your shareholdings in real time, take part in online voting, keep your details up to date, access a range of
information including payment history and much more. The app is available to download on both the Apple App Store and Google Play,
or by scanning the relevant QR code below. Alternatively, you may access the Link Investor Centre via a web browser at:
https://investorcentre.linkgroup.co.uk/Login/Login.
•
• by requesting a hard copy form of proxy directly from the Registrars, Link Group by email at shareholderenquiries@linkgroup.co.uk or
by phone – UK – 0371 664 0300. (Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United
Kingdom will be charged at the applicable international rate. Lines are open between 09:00-17:30, Monday to Friday excluding public
holidays in England and Wales). In order for a proxy appointment by way of a hard copy form of proxy to be valid, the form of proxy must
be received by Link Group at PXS1, Central Square, 29 Wellington Street, Leeds, LS1 4DL by 12:00 noon on 5 August 2024.
in the case of shareholders holding their shares through CREST, by submitting a CREST Proxy Instruction utilising the CREST electronic
proxy appointment service in accordance with the procedures set out below.
if you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has
been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io.
Your proxy must be lodged by 12:00 noon on 5 August 2024 in order to be considered valid or, if the meeting is adjourned, by the time
which is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed
to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will
govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely
by sending an authenticated message via the platform instructing the removal of your proxy vote.
•
6.
7.
If you return more than one proxy appointment, either by paper or electronic communication (including via the Link Investor Centre), the
appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read
the terms and conditions of use carefully. Electronic communication facilities are open to all shareholders and those who use them will
not be disadvantaged.
The return of a completed form of proxy or any CREST Proxy Instruction (as described in note 10 below), or the submission of instructions via the
Link Investor Centre or via Proxymity, will not prevent a shareholder from attending the Meeting and voting in person if he/she wishes to do so.
8. Shareholders holding their shares through CREST who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available
from www.euroclear.com). Shareholders holding their shares through a CREST sponsor or service provider(s) should refer to their CREST
sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
111
Annual Report and Financial Results 2023SUPPLEMENTARY INFORMATIONFINANCIAL STATEMENTSGOVERNANCEBUSINESS OVERVIEW
NOTICE OF ANNUAL GENERAL MEETING CONTINUED
9.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the
issuer’s agent (ID RA10) by 12:00 noon on 5 August 2024. For this purpose, the time of receipt will be taken to mean the time (as determined
by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should
be communicated to the appointee through other means.
10. Shareholders holding their shares through CREST and, where applicable, their CREST sponsors or voting service providers should note that
Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings
and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the shareholder concerned to
take (or, if the shareholder is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that
his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means
of the CREST system by any particular time. In this connection, shareholders holding their shares through CREST and, where applicable, their
CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations
of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation
34(1) of the Uncertificated Securities (Guernsey) Regulations, 2009.
11. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers
as a shareholder provided that no more than one corporate representative exercises powers in relation to the same shares.
12. As at 27 June 2024 (being the latest practicable business day prior to the publication of this Notice), the Company’s ordinary issued share
capital (excluding treasury shares) consists of 2,311,022,407 ordinary shares, carrying one vote each. Therefore, the total voting rights in
the Company as at 27 June 2024 are 2,311,022,407.
13. You may not use any electronic address (within the meaning of Section 523(2) of the Companies (Guernsey) Law, 2008) provided in either
this Notice or any related documents (including the form of proxy) to communicate with the Company for any purposes other than those
expressly stated.
14. A copy of this Notice can be found on the Company’s website at www.bushveldminerals.com/investors.
112
Annual Report and Financial Results 2023 COMPANY INFORMATION
BUSHVELD MINERALS
Registered Office
Oak House,
Hirzel Street
St Peter Port GY1 3RH
PRINCIPAL OPERATING ADDRESS
2nd Floor, Building 3
Illovo Edge Office Park
9 Harries Road, Illovo
Johannesburg, 2116
South Africa
Tel: +27 11 268 6555
SP ANGEL
Nominated Adviser & Broker
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
HANNAM & PARTNER
Joint Broker
7-10 Chandos Street
London W1G 9DQ
GOWLING WLG
Legal Counsel – UK
4 More London Riverside
London SE1 2AU
RSM
Independent Auditor
RSM UK Audit LLP
25 Farringdon Street
London EC4A 4AB
LINK GROUP
Company Registrar
Central Square
29 Wellington Street
Leeds LS1 4DL
MS. KATE BREDIN
Company Secretariat
Email: kate.bredin@bushveldminerals.com
Tel: +27 (0) 11 268 6555
Fax: +27 (0) 11 268 5170
MS. CHIKA EDEH
Head of Investor Relations
Email: chika.edeh@bushveldminerals.com
Tel: +27 (0) 11 268 6555
Fax: +27 (0) 11 268 5170
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BUSHVELD MINERALS
Registered Office
Oak House, Hirzel Street
St Peter Port
Guernsey, GY1 3RH
WWW.BUSHVELDMINERALS.COM