Bushveld Minerals Limited (BMN) Earnings Call Transcript & Summary

Good afternoon, and welcome to our operational update for Q4 and full year ended 31 December 2023. Thank you for joining. I'm pleased to begin by saying that we have met 2023 production guidance, and I'd like to commend our team for achieving this level of operational performance in H2 2023, particularly given the challenges we have faced as a company. I'm also extremely pleased to state that we have, just last week, on the 1st of February, announced the completion of the Orion convertible debt restructuring of $47 million. While this is a very positive step for Bushveld, I am disappointed that we have not been able to give you an update on guidance and therefore, suspend the guidance for 2024 owing to the funding shortfall as reported in our recent announcements to the market. Once this funding has been received and production is again stable across all our operations, we will look to update our shareholders and stakeholders, accordingly, providing updated guidance. But let's return to 2023 numbers. Over the course of the year, Bushveld achieved group production of 3,714 mtV in line with guidance. Q4 contributed 925 mtV to this total. Sales for the quarter were up at 1,106 mtV, above that of 849 mtV in Q3, and we're up across the full year at 4,051 mtV as we sold down on our inventory. Production of 589 mtV for the quarter at Vametco was impacted by constraints at the Barren Dam and the salt recovery plant, reliability challenges at the leach plant and more recently, cash flow shortfalls. For these same reasons, we saw a reduced full year production of 2,306 mtV and resulting higher costs for the quarter of $26.4 per kilogram, but offset by a weaker Rand-U.S. dollar exchange rate. Full year costs at Vametco of $25.5 per kilogram were up relative to 2022, owing to the lower volumes. To move on to Vanchem, the 12-month period saw an increase in production at 1,408 mtV, supported by the turnaround project we implemented in H2 2023. I'm pleased to say that this has been the highest yearly production achieved by Vanchem since it was acquired by Bushveld. As a result of this increased production, cash costs for the year were down at $27.90 per kilogram, with Q4 costs at $26.80 per kilogram. Production for Q4 was down quarter-on-quarter at 336 mtV, owing to cash flow challenges and stoppages, including film reline maintenance shutdown, which was brought forward given ongoing refractory issues at the plant. While I can't yet give any comments on 2024 guidance, we are factoring in a planned maintenance shutdown at Vametco in both Q1 for 25 days and Q3 for [ tenders ] in addition to scheduling a 23-day annual maintenance at Vanchem during the course of Q2 this year. Our safety improvement program has shown its effect in the reduced total injury frequency rate of 2.31 over the course of 2023. And we will continue to focus on optimizing safety at all our operations. On the vanadium market, we have seen a slight in pricing in Q4 relative to Q3 across all key markets. As we have noted before, we continue to prioritize sales in the higher value markets, including the aerospace sector, alloys and chemical industries. In 2023, we met our target guidance despite a funding shortfall. We have now completed our refinancing with Orion, and we are working with our partners to deliver stability and consistency in the year ahead. Lastly, I'd like to welcome Robbie Taylor, who joins us as a non-board Interim Finance Director. Robbie brings with him 27 years of experience as a finance executive in various sectors. He has extensive experience working with listed entities and multinationals. The Board and the Bushveld executive team are looking forward to working closely with Robbie while we now commence the search for a permanent Finance Director. Thank you for listening. I'll now pause to take questions.

[Operator Instructions] We'll now take our first question from Sergey Raevskiy with SP Angel.

Sorry, I missed first part of the presentation. But just a quick one on the -- on your guidance. I know that you've suspended until the SPR investment comes through. But assuming that the SPR funds come through by the end of the month, just imagining they arrived by the end of September. How long do you think it will take you to get the operations up to the previously guided capacities, which was like, I think it was like 180 for Vanchem and 200 for Vametco on monthly rates.

So thanks for the question. I mean, if the funds come in -- well, let's rather say when the funds come in at the end of February, they would have been just more than 2 months late. We've lost already 14 production days in January because of the delay in the funds, and it's expected to be equal or more than that in February. It's unlikely that we're actually going to recover to the initial market guidance because it will take some time to put contracts in place and get the maintenance done, et cetera, et cetera. I'll only be in a position to give you more clarity of what that revised guidance is once we actually get the funds.

[Operator Instructions] We have a question now from Joe Deakin, one of the private investor.