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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bushveld Minerals Limited | LSE:BMN | London | Ordinary Share | GG00B4TM3943 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.07 | -10.94% | 0.57 | 0.55 | 0.65 | 0.65 | 0.575 | 0.65 | 17,488,180 | 16:40:21 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Minrls,earths-ground,treated | 151.18M | -38.97M | -0.0166 | -0.36 | 14.06M |
From May 2019 to May 2024
TIDMBMN
RNS Number : 0221T
Bushveld Minerals Limited
29 June 2018
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement
29 June 2018
Bushveld Minerals Limited
("Bushveld" or the "Company")
Final Results for the Period Ended 31 December 2017
Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade assets, is pleased to announce its financial results for the period ended 31 December 2017.
The Annual Report to 31 December 2017 will be available on the Company's website later today at the following link: http://bushveldminerals.com/financialreports.aspx
A printed copy of the 2017 Annual Report will be posted to the Company's shareholders as per individual request. A copy of the Notice of the Annual General Meeting to be held at 18-20 Le Pollet, St Peter Port, Guernsey GY1 1WH at 11 a.m. on Wednesday 8th August 2018 will also be posted to all shareholders.
Highlights
Bushveld Minerals
-- Successfully implemented the acquisition of Vametco over two phases, the second phase completed on 21 December 2017.
-- Vametco is a high-quality, low cost vanadium producer. In 2017, Vametco produced 2,649 mtV in the form of Nitrovan(R) from magnetite concentrate which accounts for more than three per cent of global vanadium supply.
-- Phase 1: completed 06 April 2017
- Bushveld Vametco Limited ("BVL") acquired a 78.8 per cent interest in Strategic Minerals Corporation ("SMC") from Evraz Group S.A., with Bushveld Minerals Limited owning a 45 per cent interest in BVL and Yellow Dragon Holdings Limited ("Yellow Dragon") owning the remaining 55 per cent.
- Bushveld Minerals, effective shareholding in the operating company was that of an associate and was thus equity accounted for from 6 April 2017.
-- Phase 2: completed 21 December 2017
- Bushveld Minerals Limited acquired Yellow Dragon's 55 per cent interest in BVL to increase its shareholding in BVL to 100 per cent. Following the acquisition, Bushveld Minerals Limited effectively owns 59.1 per cent of the operating company, which as a subsidiary was consolidated from 21 December 2017.
-- Bushveld Minerals agreed to support Jaxson 640 (Proprietary) Limited's acquisition of a controlling interest in the Black Economic Empowerment ("BEE") shareholding in Vametco Holdings (Proprietary) Limited.
-- In November 2017, the Company completed the demerger of Greenhills Resources, creating AfriTin Mining Limited ("AfriTin"), a standalone African tin platform.
Bushveld Vanadium
-- Successfully completed the majority acquisition of Vametco vanadium mine in December 2017 to increase the Company's effective interest in the operation to 59.1 per cent.
-- Successfully expanded Vametco's production to 3,035 mtV through phase one of a three-phased expansion project.
-- On a 100 per cent basis, Vametco reported a Revenue of ZAR 1,052 million and an EBITDA of ZAR 318 million, an increase of 39 per cent and 558 per cent respectively, relative to the prior year.
Bushveld Energy
-- Completed the studies on African VRFB demand and global electrolyte demand, in partnership with the Industrial Development Corporation ("IDC").
-- Secured agreement with South African local utility Eskom for the deployment of the first VRFB in South Africa (announced in November 2017). VRFB commissioning expected to commence in the first half of 2018.
Lemur Holdings
-- Signed Memorandum of Understanding ("MoU") with Sinohydro Corporation Limited for joint development and funding options for the Imaloto Power Project in Madagascar.
- Executed a binding Power Purchase Agreement ("PPA"), with Madagascar state-owned utility, Jiro sy Rano Malagasy ("JIRAMA") for an initial 10MW executed as part of the Imaloto Power Project.
- Post year end, executed a binding 30-year concession agreement with the Government of the Republic of Madagascar.
Enquiries: info@bushveldminerals.com
Bushveld Minerals Limited +27 (0) 11 268 6555 Fortune Mojapelo, Chief Executive Officer Chika Edeh, Head of Investor Relations SP Angel Corporate Finance LLP Nominated Adviser & Broker +44 (0) 20 3470 0470 Ewan Leggat Richard Morrison Alternative Resource Joint Broker Capital Rob Collins +44 (0) 207 186 9001 Alex Wood +44 (0) 207 186 9004 Tavistock Financial PR +44 (0) 207 920 3150 Charles Vivian Gareth Tredway Lifa Communications Financial PR +27 (0) 711 121 907 Gabriella von Ille
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014.
About Bushveld Minerals Limited
Bushveld Minerals is a low cost, integrated, primary vanadium producer, with ownership of high grade assets.
The Company's flagship vanadium platform includes a 59.1 per cent controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a primary vanadium mining and processing company; the Mokopane Vanadium Project and the Brits Vanadium Project. The coal platform comprises the wholly-owned Imaloto Coal Project, which is being developed as one of Madagascar's leading independent power producers. The Company's tin interests are held through its shareholding in AIM listed AfriTin Mining Limited.
Bushveld's vision is to become a significant, low cost, integrated primary vanadium producer through owned high grade assets. This incorporates development and promotion of the role of vanadium in the growing global energy storage market through Bushveld Energy, the Company's energy storage solutions provider. Whilst the demand for vanadium remains largely anchored in the steel industry, Bushveld Minerals believes there is strong potential for an imminent and significant global vanadium demand surge from the fast-growing energy storage market, particularly through the use and adoption of Vanadium Redox Flow Batteries.
While the Company's focus is on the vanadium operations and the development and promotion of VRFBs it has additional investments in coal, power and tin.
The Company's approach to project development recognises that, whilst attractive project economics are imperative, they are insufficient to secure capital to bring them to account. A clear path to production within a visible timeframe, low capital expenditure requirements and scalability are important factors in ensuring a positive return on investment. This philosophy is core to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be accessed on the website: www.bushveldminerals.com.
About Vametco
Vametco is located near Brits on the Western Limb of the Bushveld Complex. The integrated operation comprises a vanadium ore mine and a processing plant that produces Nitrovan(R) , a trademark product sold in major steel markets across the world. The mine lies adjacent to the Brits Vanadium Project, which will in future serve as an alternative source of near surface run of mine (ROM) ore feed to the Vametco plant.
The Vametco mining operation uses open pit bench mining methods to mine a well-defined orebody. The deposit is continuous with limited faulting and dips in a northerly direction at approximately 19 degrees.
ROM ore is fed into a primary, secondary and tertiary crushing circuit, followed by milling and magnetic separation to produce magnetite concentrates. The magnetite concentrates are fed into the extraction process which includes the kiln for roasting followed by leaching and precipitation. Thereafter the precipitated vanadium as ammonium metavanadate is converted to modified vanadium oxide (MVO) in rotary calciners. MVO is fed into the mix plant and finally into the shaft furnaces to produce Nitrovan(TM) .
Chairman's Statement
2017 was a transformational year for Bushveld which saw the Company significantly progress the development of each of its platforms. A testament to the tenacity of our management team, the successful completion of the Vametco vanadium mine acquisition in December was a landmark transaction for Bushveld, transforming the Company from being an explorer to a low cost producer with a strategy to become a leading vertically integrated vanadium producer.
Since 2014, Bushveld has operated a commodity focussed platform strategy leading to the adoption of a clear model for long term growth and the development of three independent platforms: Bushveld Vanadium (vanadium); Greenhills Resources (tin); and Lemur (coal and power). The past year has seen each platform make considerable progress in becoming a standalone operating platform, particularly in the case of Greenhills Resources, which gained independent listing on the AIM market of the London Stock Exchange.
The Company's flagship platform is Bushveld Vanadium, and this is undoubtedly where we made most progress as a Company. The acquisition of Vametco could not have been completed at a more opportune time for the Company, with vanadium prices on a solid upward trajectory throughout 2017, a trend that has continued in 2018. Our long-standing strategy has not changed which is to build a leading vertically integrated vanadium producer focussed on enhancing growth both horizontally and vertically.
Horizontally we seek to grow our production volumes to meet growing demand from the steel and energy storage sectors, while our vertical growth speaks to our efforts to participate downstream along the vanadium value chain.
The focus on the vanadium platform resulted in the demerger of the Company's tin platform, Greenhills Resources, into a standalone company on AIM, renamed AfriTin Mining Limited. AfriTin was admitted on AIM on 9 November 2017. The transaction significantly simplified Bushveld's group structure, enabling the Board and management team to focus on the vanadium platform, while allowing shareholders continued ownership of AfriTin's assets. The Company is confident that AfriTin will continue to build on its position as a leading African tin exploration and development mining company. In addition, following his appointment as Chief Executive Officer of AfriTin Mining, Anthony Viljoen stood down as an executive director at Bushveld Minerals. Anthony continues to serve as non-executive director of the Company.
The Board believes that high standards of governance are crucial to deliver our strategy, create long term value and maintain our licence to operate. Accordingly the Board is always looking at ways of improving the Company's corporate governance and assurance process.
The Board of Directors takes a rigorous approach to Board planning. It considers skills, experience and attributes required to effectively govern and manage risk within Bushveld Minerals. As a result, post year end the Board appointed Michael Kirkwood as independent non-executive director. Michael is a highly experienced and well respected former international banker, having worked at the highest levels of Citigroup during his 31-year career with the bank. He was latterly the UK country head and chairman of the Corporate Bank and is currently a non-executive director of AngloGold Ashanti Ltd and Chairman of Ondra LLP.
The Board is also determined to ensure that it continues to have the right balance of Directors and carries on with its high level of responsibilities and corporate governance. This process is continuous, and we will bring additional focus to ensuring the Board evolves to take account of the rapidly changing external environment in which Bushveld Minerals operates.
Post year end, the Company successfully raised US$22.2 million (GBP15.7 million) (before expenses) by way of an oversubscribed share placing. The placing was led by key UK institutional investors and a consortium of cornerstone investors, including the original founders of Mimosa Platinum and LionOre Mining International, as well as the key investors in Mantra Resources at its inception. We are delighted to welcome these new investors as shareholders of the Company.
Bushveld continues to endeavour to build its business and strategy in a way that ensures stakeholders and the communities in which it operates benefit from and are involved in the Company's operations. This mantra is at the heart of our business and we shall continue to adhere to this along with the mining regulations in the jurisdictions in which we operate. The draft new Mining Charter for South Africa was announced Friday 15 June 2018, requiring that the Black Economic Empowerment ("BEE") shareholding set to increase to 30 per cent within five years. The new and renewal of existing mining rights will require 14 per cent for black entrepreneurs and 8 per cent ownership for both communities and employees, thus totalling 30 per cent. Whilst the 30 per cent requirement was expected, the new announcement is a 5 per cent free carry provision for both communities and employees, within the 8 per cent. The Charter also mandates a trickle dividend of one per cent of EBITDA to employees and communities respectively from the 6th year where dividends are not previously declared during the said period. The move towards finalising the Mining Charter and thus bringing much needed certainty is welcome. There remains, however, several provisions in the draft Charter that will no doubt be challenged as a consequence of which we expect some revisions before it is finalised. The Company will thus continue to exercise caution in dealing with the Charter until it is finalised.
The Bushveld Minerals story is at heart a South African story of the successful development of a significant global platform from early stage exploration through innovative acquisitions to establish an attractive portfolio of quality, low-cost and cash generating assets. It is thus only natural that the Company would seek a South African capital markets base. Accordingly, Bushveld Minerals is considering the option of listing on the Johannesburg Stock Exchange in the near future, a move that will allow South African investors access to its story while broadening the Company's access to capital to facilitate its aggressive growth plans and enhance its profile further in the global capital markets.
The Board recognises the importance of returns to shareholders, and consequently it has determined that during the second half of 2018, Bushveld Minerals will define a capital allocation framework, which will outline an approach and strategy towards shareholder return, value creation through investments and financial performance.
The Board believes that the Company is uniquely placed in a buoyant market to grow into a leading vertically integrated vanadium producer. Bushveld has a quality primary vanadium asset portfolio, a strategy to develop this and to become an integrated player. In addition, it has partners and a team in place to deliver this.
After what can only be described as an incredibly significant and transformational year, the year ahead promises to continue in the same way. The 2018 year promises to be another busy and exciting one for the Company as we look to further develop Bushveld's platforms.
I would like to thank our management team for their considerable efforts in what has been a challenging but exciting time for our Company. The business is dependent upon the hard work, dedication and skills of all our team. I would in particular like to thank our CEO Fortune Mojapelo, who has led the Company and team in an exemplary way. Also, to my colleagues on the Board, I extend my appreciation for their wise counsel and advice that I have received this year. I look forward to supporting Fortune and the management in our pursuit of long term value creation for all our shareholders.
Ian Watson
Non-Executive Chairman
CEO Report
Introduction
In the past year, Bushveld Minerals made significant progress to deliver on its strategy to become one of the most significant, lowest cost and vertically integrated primary vanadium producers in the world. benefiting from a high grade resource embedded within the Company's portfolio. We remain focused on delivering on our stated objectives supported by an outstanding management team, great partners, a portfolio of world class assets and strong market conditions.
The highlight of the year was the completion of the acquisition of the Vametco primary vanadium mining and processing plant ("Vametco"), providing Bushveld with a high-quality asset producing a high quality vanadium product for a significant global customer base.
Acquisitions of Strategic Minerals interest and Vametco
During 2017, Bushveld Minerals completed the acquisition of a 78.8 per cent interest in Strategic Minerals Corporation ("SMC"), which holds a 75 per cent shareholding in the vanadium mining and processing companies Vametco Holdings (Proprietary) Limited and Vametco Alloys (Propriety) Limited. This acquisition transformed the Company from an exploration company into a significant vanadium producer with no less than 3 per cent of the global vanadium market share.
The Vametco acquisition was conducted over two phases. During the first phase, Bushveld partnered with Yellow Dragon Holdings Limited ("YDH") to acquire a 78.8 per cent interest in SMC from the Evraz Group S.A. The partnership was structured through Bushveld Vametco Limited ("BVL"), of which Bushveld held 45 per cent while YDH held the majority 55 per cent. This phase was completed on 6 April 2017.
On 21 December 2017 Bushveld Minerals completed the acquisition from YDH of 55 per cent of the issued share capital of BVL, being all of the ordinary share capital that was not owned by the Company. Following the completion of this transaction, the Company now owns an effective 59.1 per cent indirect beneficial and economic interest in the Vametco vanadium mine.
The value of the Vametco acquisition to Bushveld cannot be over-stated. The Vametco transaction, with a purchase price that was less than ten per cent of replacement value, is an excellent testament of the Company's strategy of targeting brownfield processing infrastructure which can be acquired at a fraction of a greenfield operation and provides a lower risk and quicker path to production. It provides Bushveld with a low-cost, scalable and profitable vanadium production platform from which the Company can grow and implement its vision of a large, vertically integrated vanadium company with a diversified vanadium products portfolio. Some of the benefits of the acquisitions are summarised below:
-- It immediately transforms Bushveld from an exploration company into a producing company with a significant share of the global vanadium market. Vametco enjoys more than a three per cent share of the global vanadium market; which is expected to grow to more than 5 per cent by 2019;
-- It gives the Company exposure to vanadium production and cash flows at an opportune time. Vanadium prices have risen from US$19/kgV when the acquisition was first announced to US$43/kgV when the second phase of the transaction was completed.
-- While Vametco is benefitting handsomely from the surge in vanadium prices, it is well positioned to continue generating cash flows even in a low-price environment, owing to its low-cost production base;
-- The acquisition comes with a solid management team with more than 100 years combined experience in vanadium mining and processing and adds depth to Bushveld's management capacity
-- The production base has the potential to expand by the end of 2019 to 5,000 mtV per annum, supported by one of the largest primary vanadium resource bases in the world (under the ownership of Bushveld);
-- Vametco has the potential to diversify its product range beyond its Nitrovan(R) product; and
-- It is aligned with the Company's aspirations in the global energy storage space by providing capacity for potential electrolyte manufacturing.
Non-core asset strategy
Bushveld has since inception in 2012 operated a multi-commodity-focussed platform strategy since 2012. This approach has led to the adoption of a clear model for long term growth and the development of three independent platforms: Bushveld Vanadium, Greenhills Resources (now listed on AIM as AfriTin) and Lemur.
Four key pillars have guided the subsequent development of the Company's projects:
-- Identifying commodities with a positive market outlook; -- Developing assets with low cost curve positioning;
-- Developing a viable low capital expenditure, realisable path to production and, thus cash flow generation; and
-- Ensuring project scalability
In late 2013 the Company pivoted on vanadium and has since developed its vanadium platform as the Company's flagship while the strategy for the other platforms focussed on building critical mass for a short-term spin-off into stand-alone platforms. That strategy resulted in the demerger and listing of AfriTin Mining Limited in November 2017. The Company has made significant progress in building critical mass in Lemur for a future as a standalone coal and energy focused platform. Efforts are underway to evaluate various options in respect to the future.
The Company's vision
The Company's vision is to grow into a significant, low cost, vertically integrated vanadium platform that comprises of:
-- One of the largest high-grade primary vanadium resource bases in the world, as well as becoming a leading primary vanadium production source;
-- A low cost position on the production cost curve, leveraging the high in-situ and in-magnetite V(2) O(5) grades and the open-cast mining proposition of Bushveld's deposits, as well as access to low cost brownfield processing infrastructure; and
-- Development of downstream operations beyond production of end-use vanadium products to include development and deployment of vanadium applications in industries such as the energy storage market, where Bushveld intends to manufacture vanadium electrolyte and to build VRFBs.
Bushveld Vanadium
Vametco
Vametco had a solid performance in the 2017 calendar year, supported by a strong vanadium price environment with the ferrovanadium price averaging US$33/KgV for the 12 months. Vametco produced 2,649 mtV (Nitrovan(R) and FeV) during the 2017 calendar year. Unit production costs for the 2017 calendar year were ZAR 220/KgV (US$16.6/kgV).
Vanadium production guidance for the 2018 calendar year remains unchanged at approximately 3,680 mtV. Following the completion of phase two of the expansion project by the end of June 2018, Vametco's production capacity will ramp up from the current 3,035 mtV to 3,750 mtV per annum. The capital expenditure programme is being funded from operational cashflow.
In 2017, Vametco commenced a three-phased expansion project with the aim of increasing annualised production capacity to 5,000 mtV by the end of 2019. Phase one of the expansion plan was successfully completed on time and on budget in the third quarter of 2017, during which time Vametco reached an annualised production capacity of 3,035 mtV. Phase two of the expansion was, completed on time and in budget in June 2018, resulting in Vametco achieving an annualised production capacity of 3,750 mtV. Phase three of the expansion will increase Vametco's annualised production run rate to 5,000 mtV by 2019. Completion of the expansion project will enhance Vametco's existing competitive position in a structurally challenged market.
Mokopane Vanadium Project
The Mokopane Vanadium Project is a key part of Bushveld's vanadium strategy. The project comprises one of the world's largest primary vanadium resources hosted in the three adjacent layers of the Main Magnetite Layer ("MML"), the Main Magnetite Layer-Hanging Wall ("MML-HW") and the AB Zone. The MML hosts high in-situ grades of 1.4 per cent V(2) O(5) and in-concentrate 1.75 per cent V(2) O(5) grades and was the basis for the Pre-Feasibility Study completed in January 2016. An application for a New Order Mining Right was lodged in March 2015 and is currently being processed by South Africa's Department of Minerals Resources. The Company is in ongoing discussions with the Department of Mineral Resources with a view to being granted a New Order Mining Right and significant progress has been made during the year. The Company has also been progressing in ongoing consultations with the local community and continues to evaluate ways to bring the asset into production in the most cost-efficient manner possible. Efforts are also continuing to find strategic partners for the project. The intention is to secure a mining right and develop the project as a greenfield mining and processing plant; or as mining operation supplying ore to China and or other brownfield processing plants.
Brits Vanadium Project
The Company has begun an exploration programme at the Brits Vanadium Project, which comprises prospecting rights on several farms adjacent to Vametco, with the aim of establishing a maiden Mineral Resource Estimate. After the year end, a soil geochemical sampling programme and ground magnetic survey were carried out over the project area. Interpretation of the results of this work has led to several drilling targets being delineated.
Drilling on these targets commence, post year end, in March 2018, and thus far eight diamond drill holes have been completed, totalling 833.08 metres. The Lower Seam (the primary orebody mined at the adjacent Vametco Mine) has been intersected in several drill holes, and the Intermediate Seam and Upper Seam have also been intersected in some drill holes.
Drill cores are currently being logged and assayed, with the assays being carried out at the Vametco mine laboratory and confirmed by an independent external laboratory. The Company expects to publish the results as they are received. The Company will also commence an infill drilling programme at the project and will begin estimation of the Mineral Resource once logging, sampling and assaying of all drill holes has been completed.
Bushveld Vanadium production plan
Through its expansion initiatives at Vametco, as well as targeted brownfield opportunities, the Company is looking to expand its production to 5,000 mtV by the end of 2019 and to more than 10,000 mtV in the medium term.
Bushveld Energy
Bushveld Energy was established with the objective of not only promoting the adoption of vanadium in the energy storage industry through vanadium redox flow batteries ("VRFBs") but also exploiting the multi-billion dollar commercial opportunity that the energy storage industry presents.
The Company believes that VRFBs are well positioned to take a significant share of the global utility-scale energy storage market, where their distinctive features, including low life-of-battery costs, flexible scalability, long duration energy storage capacity and inherent safety give them a significant advantage over other technologies. These, and more advantages, are increasingly recognised as global deployments of VRFBs grow year on year.
Since its establishment, Bushveld Energy has made significant progress defining the energy storage market opportunity, building industry awareness for VRFB and developing a business model for Bushveld Energy. The business model is anchored in Bushveld Minerals' low-cost production platform and smart partnerships along the VRFB value chain. To date Bushveld Energy has signed a cooperation agreement with the Industrial Development Corporation ("IDC") a local state-owned development finance institution; a Memorandum of Understanding with USA-based VRFB manufacturer Uni Energy Technologies (UET).
During the past year, in particular, the company has made significant progress, including the following:
a) Completion of two key studies carried out in cooperation with the IDC:
The "African VRFB demand" and "Global Electrolyte Demand" study
The study results indicated highly favourable demand for VRFBs, especially in the utility and off-grid, mini-grid use cases, peaking in 2025-2030. It also showed that global electrolyte demand is likely to peak in the same time frame at 1200-1800 megawatt hours ("MWh") or 40-60 megalitres ("ML") per annum. Conservatively, the company believes there is the potential for Bushveld to supply an initial 5-10ML of this demand, supporting supply of an initial 200MWh in energy storage per annum.
A techno-economic study for the manufacture of vanadium electrolyte in South Africa
The study results highlighted that Bushveld Energy can manufacture electrolyte on a cost-competitive basis, thereby allowing it to compete both regionally and globally. A scalable plant can be configured with an initial annual production capacity of 200-400MWh. The estimated initial capital expenditure for the plant would be in the region of ZAR130 million (US$9.7 million), of which more than 75 per cent comprises balance of plant. A follow-up locational analysis recommended a dual location design. Pre-purification would be performed at Vametco to reduce capital expenditure through co-location. The second part of the plant will be focussed on electrolyte production and mixing and will be located in an Industrial Development Zone ("IDZ") in close proximity to a port, positioning it well for export opportunities. While the most significant driver of costs (upwards of 70 per cent) is the vanadium feedstock, Bushveld has access to locally available, low cost supplies within its own portfolio. This gives both the Company and South Africa a natural
competitive advantage.
b) Secured an agreement with South Africa's utility Eskom for a 120kW / 450 kWh VRFB project
In November last year, Bushveld Energy confirmed that the first utility scale VRFB would be deployed in South Africa. The project includes our two existing strategic partner entities: the IDC as a co-developer, and USA-based UET as the VRFB manufacturer. The system will be deployed with Eskom at its Research, Testing and Development ("RT&D") Centre in Rosherville, South Africa. This follows Eskom's identification of the need for potentially up to 2,000MW of additional, daily balanced energy storage within the existing grid earlier this year. The project will see the installation of a VRFB with peak power of 120 kW and peak energy of 450 kWh.
The project will allow Eskom to test the VRFB and its performance and applications under numerous simulations and help build the business case for battery energy storage for Eskom. Bushveld Energy is also performing the project integration to the RT&D's existing micro-grid.
Since the year end, work has continued on this project and manufacturing of the Direct Current ("DC") portion of the VRFB has been completed with factory acceptance gained in April 2018. Site preparation work has commenced at the Eskom site, which has included earthworks and cabling. Two technicians from South Africa have also been appointed to perform the installation and maintenance on the Eskom project. Technicians were trained at UET, in April 2018. This will give Bushveld Energy the capability to install and maintain future VRFB installations in South Africa and regionally. The entire system is still on track to be delivered towards the end of the second quarter of 2018.
Electrolyte facility
A key part of Bushveld Energy's strategy is the creation of an electrolyte production facility which Bushveld Energy is looking to establish with the IDC. Post year end, an international chemicals company that has already designed and built a vanadium electrolyte production plant with multiple megalitre annual capacity, was engaged by Bushveld Energy. The scope of the engagement at this stage includes independent verification and improvement of the existing process flow and plant design to cover both the process at Vametco and that of the greenfield facility in the East London Industrial Development Zone ("EL IDZ"). Greater certainty of the cost estimate for the dual-located processing assets, as well as joint work with Bushveld Energy and Bushveld Vametco to expand Vametco's current laboratory capabilities to include testing of electrolyte in-house and production of batch, single-acid vanadium electrolyte as samples to prospective VRFB customers. This stage also includes the preparation of the project for the Engineering, Procurement and Construction ("EPC") phase, which is planned for the third quarter of 2018 as well as tendered for environmental assessment that needs to be performed at both Vametco and EL IDZ.
Bushveld Energy Strategy
We see 2018 as a transformational year for Bushveld Energy. Development work to date is expected to yield results in the form of:
1) Proving the Company's capabilities and securing its position as a developer and integrator of utility scale energy storage projects by delivering its initial projects and securing large scale energy storage mandates in Africa;
2) Positioning itself as a key electrolyte supplier, by supporting the global industry through the low cost production of electrolyte while securing offtake agreements; and
3) Securing additional strategic relationships with downstream stakeholders in the global vanadium battery supply chain and electrical power developers and producers operating in Africa
With these developments, the company will be in a position to outline its business model, cash flow capabilities and valuation contribution within Bushveld Minerals.
Lemur Holdings
The addition of a power component to Lemur's JORC compliant and resource of approximately 136 million tonnes supports Lemur's plans to unlock the value of this coal asset in Madagascar, while simultaneously securing a reliable electricity offtake backed by a government entity.
The Company was also delighted to appoint Prince Nyati as CEO of Lemur during the year. Prince has extensive experience in the international energy and mining sector and the team look forward to working with him to deliver Lemur's strategy.
Excellent progress was made during the year at Lemur. Key among these was the execution of a binding 30-year Power Purchase Agreement (PPA) in November 2017 between Lemur's Madagascar subsidiary, Imaloto Power Project SARL and state-owned utility, JIRAMA.
Prior to this development, in March 2017, Lemur signed a technical cooperation agreement with Sinohydro Corporation Limited ("Sinohydro"), a subsidiary of Power China, to develop the power project and also to look at funding options. Sinohydro is also completing the bankable feasibility study ("BFS") under the same agreement.
In October 2017, Lemur appointed an owner's Engineer, together with other technical, environmental and legal advisors to support the development phase of the project. During the reporting period, Lemur conducted the load demand and transmission routing study to understand the load demand in the catchment area and to align the design and phasing of the power plant capacity in the catchment area. These studies are critical to concluding the BFS on the project.
Post year end, Lemur has, through Imaloto Power Project SARL, executed a binding 30 year concession Agreement with the Government of the Republic of Madagascar, represented by the Ministry of Energy and Hydrocarbons for the approval to develop, construct, operate and maintain the Imaloto Power Project in Madagascar.
With regard to government approvals and regulatory compliance, it is important to note that in addition to the concession, Lemur also started the Social, Environmental and Impact Assessment (SEIA) post year end.
Lemur 2018 priorities
2018 promises to be another strong year for Lemur with a number of key milestones that the Company is looking to deliver. These include:
-- Concluding the SEIA Study;
-- Pursuing further funding and credit enhancement options for the Project, which has already been initiated;
-- Securing additional power offtakes in addition to the current demand from JIRAMA;
-- Seeking to conclude coal offtakes with third parties. It is important to note that the coal mine is viable with only supplying coal to the Power Project. Notwithstanding, supplying coal to third parties provides early cashflows prior to commissioning of the power plant; and
-- Further exploring strategic partnerships for the Project.
Lemur is well placed to achieve these milestones and the Company is confident that the projected Power Project will be commissioned in 2021.
Financial Report
The most significant transaction during the year was the acquisition of Vametco, which provides Bushveld with a strong cash generating asset. In 2017 Vametco generated ZAR 1,052 million in Revenue and ZAR 318 million in EBITDA. As the acquisition of Vametco was completed on 21 December 2017, resulting on Bushveld Minerals having an effective 59.1 per cent economic interest in Vametco, the reported Bushveld Minerals results reflect Vametco's consolidated performance only from 21 December 2017.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a priority for Bushveld Minerals. We are proud of the Company's achievements and strive to: 1) create value in the communities in which it operates; 2) maintain safe operations; and 3) minimise social and environmental impact. Through our programmes with the communities we have developed trusting relationships and seek to prioritise the health and safety of our employees and host communities who work with us. We have made significant progress in 2017 and we will continue to build on this success. More information can be found in the CSR section of this report.
Black Economic Empowerment partner
During the year, Bushveld Minerals agreed to support Jaxson 640 (Proprietary) Limited's acquisition of a controlling interest in the Black Economic Empowerment ("BEE") shareholding in Vametco Holdings (Proprietary) Limited, ensuring the BEE partner at Vametco Holdings is a partner of choice aligned with Bushveld Minerals' vanadium strategy and focus. The Jaxson transaction took place alongside Bushveld Vametco Limited's acquisition of a 78.8 per cent interest in Strategic Minerals Corporation.
Bushveld Minerals' post year end events
In March 2018, the Company successfully raised US$22.2 million (GBP15.7 million) (before expenses) by way of an oversubscribed ordinary shares placing. The planned use of proceeds of the placing was: redemption of the outstanding Atlas Capital convertible bond; simplifying Bushveld's organisational and corporate structure; and supporting Bushveld's vanadium expansion programme.
In September 2017 the Company agreed to issue up to GBP8 million of unsecured convertible bonds to the UK based fund Atlas Capital Markets Limited, and its New York based joint venture company, Atlas Special Opportunities Limited. The convertible bonds were issued into two tranches of GBP4,500,000 issued in September 2017 and GBP3,500,000 issued in December 2017. In June 2018, the Company, fully redeemed the outstanding Atlas convertible bonds.
Following the demerger of Greenhills Resources Limited, Bushveld Minerals retained a 17.48 per cent shareholding in AIM-listed AfriTin Mining Limited from the 17(th) of November 2017. Post year end, on 20 June 2018, AfriTin successfully completed a private placement of new shares, with the result that Bushveld Minerals interest was diluted from 17.48 percent to 10.04 percent. Since Bushveld Minerals does not exercise significant influence over AfriTin, the investment has since been accounted for as a financial asset available for sale.
Outlook
Having completed the transformational acquisition of Vametco, we look forward to the year ahead with added confidence as we continue to diligently execute the strategy that we have articulated across all of our platforms. The transformation to a producer with healthy cash flows, while very satisfying, is only a step in our journey to build one of the most significant lowest cost vertically integrated vanadium companies in the world. There is much work ahead and I am very confident that we have the right asset base, the right strategy and the best team to deliver it.
I would like to take this opportunity to thank everyone that has played a crucial role during a year that has been as challenging as it has been rewarding. This includes the outstanding management team for its diligence, the Board of Directors for its continual support and counsel, the local communities in the areas in which we operate for their partnership which we treasure and our advisers for their expert guidance. I look forward with anticipation to reporting this time next year on our continuing progress.
The story of Bushveld Minerals is not yet half told.
Fortune Mojapelo
Chief Executive Officer
Retrospective Compensation Scheme
In June 2016, the Board of Bushveld Minerals formulated a policy to compensate directors and key employees ("Eligible Recipients") for historic sub-market salary shortfalls and bonuses that had accrued since the inception of the Company. As Bushveld Minerals was in the early stages of its growth cycle and cash was heavily constrained, it was proposed that Eligible Recipients would be given the choice either to receive retrospective compensation via a one-off lump sum cash payment or through proposed share awards. The Board subsequently extended the proposal to compensate certain advisors in lieu of cash consultancy fees to protect the Company's cash balances during its growth phase.
A number of Eligible Recipients chose to receive shares, thereby aligning their interests with those of the shareholders of the Company, easing pressure on Bushveld's cash flow and contributing to the growth of the Company.
Since the formulation of the policy, the Company has often been in possession of inside information and so been unable to compensate the Eligible Recipients with share equity in Bushveld Minerals as intended. In the Company's AIM admission document published on 30 November 2017, the Company indicated its intention to issue up to 24,847,310 new ordinary shares to Eligible Recipients, on the recommendation of its then constituted remuneration committee. The total value of the proposed share award on 29 November 2017, (based on the closing mid-market price of ordinary shares on the last Business Day before the publication of the Admission Document) was c.GBP2.0 million.
The Company had intended to use part of the authority granted by shareholders on 20 December 2017 to issue ordinary shares to Eligible Recipients however it has not been able to do so. Given that none of the ordinary shares referenced above have been issued since the 2016 award, the cost of servicing the scheme has increased significantly following the material increase in the Company's share price in recent months. Nevertheless, it is to be noted that while the cost of servicing these share allocations has increased by approximately 10 times, the market capitalization of the company has increased by approximately 16 times from the 2016 period.
In this context the Remuneration Committee has made recommendations and the Board has approved the following retrospective compensation awards:
-- A total of ZAR 4,332,584 (GBP 241,000) was paid in once off bonuses as Retrospective Employee Compensation;
-- A total of 2,741,310 ordinary shares should be awarded to employees who opted to receive shares in lieu of cash bonus payments; and
-- A total of 1,541,000 ordinary shares should be awarded to advisors and consultants as part of the compensation agreed in lieu of professional and advisory fees.
The Company also proposes issuing restricted ordinary share awards to settle historic compensation shortfalls for Executive Directors, Non-Executive Directors and a director of Bushveld Vametco, which are subject to shareholder approval, as follows (Fortune Mojapelo - 7,000,000 Ordinary Shares; Anthony Viljoen - 7,000,000 Ordinary Shares, Bill Chipane, Director of Bushveld Vametco - 2,500,000 Ordinary Shares; Ian Watson, Non-Executive Chairman - 3,015,000 Ordinary Shares, Jeremy Friedlander, Non-Executive Director - 1,050,000 Ordinary Shares).
Fortune Mojapelo, Anthony Viljoen, Ian Watson, Jeremy Friedlander as directors of the Company and Bill Chipane as a director of Bushveld Vametco are each regarded as a related party as defined by the AIM Rules for Companies. The conditional issue of shares to these parties is therefore deemed to be a related party transaction for the purposes of the AIM Rules. Michael Kirkwood and Geoff Sproule, being the independent directors, consider, having consulted the Company's Nominated Adviser, SP Angel Corporate Finance LLP, that the terms of the related party transaction are fair and reasonable insofar as the shareholders of the Company are concerned.
Shareholders should note that the retrospective compensation and share awards referenced above are in full and final settlement of all compensation shortfalls for prior years, including the current reporting period. They are also subject to a minimum restricted hold period of 12 months except for limited circumstances including meeting any tax liabilities resulting from the share award.
The aggregate share awards relating to retrospective compensation represent approximately 2.5% dilution of existing shareholder interests
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF BUSHVELD MINERALS LIMITED
Opinion
We have audited the financial statements of Bushveld Mineral's Limited and its subsidiaries (the 'group') for the period ended 31 December 2017 which comprise of the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
-- give a true and fair view of the state of the group's affairs as at 31 December 2017 and of the group's loss for the period then ended;
-- are in accordance with IFRSs as adopted by the European Union; 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-- the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-- the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Acquisition of controlling interest in Bushveld Vametco Limited
Accounting for the acquisition of Bushveld Vametco Limited requires management to make significant judgements on the fair value of consideration and the fair value of assets and liabilities acquired. The acquisition also resulted in a significant increase in the reported amounts of assets and liabilities in the Statement of Financial Position. As a result, the acquisition of Bushveld Vametco Limited was determined to be a key audit matter.
Our work included:
-- Consideration of the completeness of assets and liabilities identified on acquisition
-- Audit of management's judgements of the fair values of assets, liabilities and contingent liabilities acquired, including consultation with valuation experts
-- Audit of the fair value of the consideration for the acquisition, both current and deferred elements, and that all transaction costs are appropriately treated
-- Audit of the disclosures included in the financial statements with reference to IFRS 3 -- Review of the work of component auditors in accordance with ISA (UK) 600
The related disclosures are included in note 32 in the financial statements.
Demerger of Greenhills Resources Limited
The demerger of Greenhills Resources Limited was a complex transaction and as a result was determined to be a key audit matter.
Our audit work included:
-- Audit of the accounting treatment of the transaction, including recalculation of the figures reported in the income statement and within equity and challenged the inputs and methodology, including management's assumptions
-- Audit of the classification and valuation of the remaining interest in AfriTin shares and checked compliance with accounting and disclosure requirements
-- Audit of the disclosures included in the financial statements
The related disclosures are included in note 12 in the financial statements.
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 and to evaluate the effects of misstatements, both individually and on the financial statements as a whole. We determined a magnitude of uncorrected misstatements that we judge would be material for the financial statements as a whole (FSM), which was calculated at GBP1,300,000. We agreed with the Audit Committee that we would report to them all unadjusted differences in excess of GBP50,000, as well as differences below those thresholds that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The audit was scoped to ensure that we obtained sufficient and appropriate audit evidence in respect of:
-- the significant business operations of the group
-- other operations which, irrespective of size, are perceived as carrying a significant level of audit risk whether through susceptibility to fraud, or for other reasons
-- the appropriateness of the going concern assumption used in the preparation of the financial statements
The audit was scoped to support our audit opinion on group financial statements of Bushveld Minerals Limited and was based on group materiality and an assessment of risk at group level.
Where components of the group were considered significant, we reviewed component auditor's work in accordance with ISA (UK) 600. The Bushveld Vametco Holdings Proprietary Limited group was a significant component and we visited the offices of the component auditor in South Africa to review the audit working papers and discuss the audit issues with the component audit team.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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
-- the parent company financial statements are not in agreement with the accounting records; 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 of our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement set out on page 51, 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.
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.
-- 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 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, 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.
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 2018
Consolidated Income Statement
For the ten months ended 31 December 2017
Hot Features
Premium
10 Months 12 Months
ended ended
31 December 28 February
2017 2017
Note GBP GBP
Continuing operations
Revenue 5 2,210,430 -
Cost of sales (1,093,443) -
Gross profit 1,116,987 -
Other operating income - 31,445
Selling and distribution
costs (220,724) -
Other mine operating costs (122,707) -
Idle plant costs (24,216) -
Administration expenses (3,740,558) (1,550,087)
Operating loss (2,991,218) (1,518,642)
Share of results of associate 32 3,610,066 -
Impairment loss on demerger
of tin assets 12 (547,441) -
Finance income 8 107,045 1,093
Finance costs 9 (863,035) (202,518)
Loss before tax (684,583) (1,720,067)
Taxation 10 (8,144) -
Loss after taxation (692,727) (1,720,067)
Attributable to:
Owners of the parent (953,538) (1,705,920)
Non-controlling interests 260,811 (14,147)
(692,727) (1,720,067)
Loss per ordinary share
attributable to owners of
parent
Basic and diluted loss per
share (in pence) 11 (0.12) (0.28)
All results relate to continuing activities.
The notes on pages 68 to 104 form part of these financial statements.
Consolidated Statement of Comprehensive Income
For the ten months ended 31 December 2017
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Loss for the year (692,727) (1,720,067)
Other comprehensive income,
net of tax:
Items that may be subsequently
reclassified to profit or
loss:
Currency translation differences 1,354,597 2,887,415
Available-for-sale financial
assets - net change in fair
value 19 (779,930) -
Total comprehensive income
for the year (118,060) 1,167,348
================= =================
Attributable to:
Owners of the parent (327,272) 783,430
Non-controlling interests 209,212 383,918
Total comprehensive income
for the year (118,060) 1,167,348
================= =================
Consolidated Statement of Financial Position
As at 31 December 2017
Company number: 54506
31 December 28 February
2017 2017
Note GBP GBP
Assets
Non-current assets
Intangible assets: exploration
and evaluation 12 45,110,207 60,201,729
Property, plant and equipment 13 32,922,605 304,910
Investment properties 14 2,448,489 -
Deferred tax asset 15 2,427,455 -
Total Non-Current assets 82,908,756 60,506,639
Current assets
Inventories 16 12,727,444 -
Trade and other receivables 17 10,286,266 2,507,027
Restricted investment 18 3,844,454 -
Income tax receivable 862,162 -
Available-for-sale financial
assets 19 1,224,626 -
Cash and cash equivalents 20 7,218,820 131,155
Total Current assets 36,163,772 2,638,182
Total assets 119,072,528 63,144,821
=========== ===========
Equity and liabilities
Share capital 25 8,758,948 6,962,141
Share premium 25 51,306,449 60,923,922
Accumulated deficit (9,725,332) (8,771,794)
Warrant reserve 1,566,755 594,127
Foreign exchange translation
reserve 1,394,589 (11,607)
Fair value reserve (779,930) -
----------- -----------
Equity attributable to
owners of the parent 52,521,479 59,696,789
Non-controlling interests 26,969,295 2,032,925
Total Equity 79,490,774 61,729,714
Non-Current liabilities
Borrowings 21 5,815,092 -
Other financial liabilities 21 1,012,490 -
Post-retirement medical
liability 23 2,063,042 -
Environmental rehabilitation
liability 24 4,943,249 -
Deferred consideration 8,167,393 -
Total Non-Current liabilities 22,001,266 -
Current liabilities
Borrowings 21 - 128,767
Trade and other payables 22 15,007,199 1,286,340
Provisions 26 2,573,289 -
Total Current liabilities 17,580,488 1,415,107
Total Equity and liabilities 119,072,528 63,144,821
=========== ===========
The notes on pages 68 to 104 form part of these financial statements.
The financial statements were authorised and approved for issue by the Board of directors and authorised for issue on 28 June 2018.
G N SPROULE
Director 28 June 2018
Consolidated Statement of Changes in Equity
For the ten months ended 31 December 2017
Attributable to owners of the parent company
Foreign
exchange Non-
Share Share Accumulated Warrant translation Fair value controlling Total
capital premium deficit reserve reserve reserve Total interests equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total equity at
29 February
2016 4,863,373 59,927,541 (7,320,313) 422,386 (2,500,957) - 55,392,030 1,349,513 56,741,543
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Loss for the
year - - (1,705,920) - - - (1,705,920) (14,147) (1,720,067)
Other
comprehensive
income, net of
tax:
Currency
translation
differences - - - - 2,489,350 - 2,489,350 398,065 2,887,415
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Total
comprehensive
loss for the
year - - (1,705,920) - 2,489,350 - 783,430 383,918 1,167,348
Transactions
with
owners:
Grant of
warrants - - - 426,180 - - 426,180 - 426,180
Reserve transfer - - 254,439 (254,439) - - - - -
Issue of shares 2,098,768 996,381 - - - - 3,095,149 - 3,095,149
Non-controlling
interest - - - - - - - 299,494 299,494
Total equity at
28 February
2017 6,962,141 60,923,922 (8,771,794) 594,127 (11,607) - 59,696,789 2,032,925 61,729,714
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
(Loss)/profit
for
the period - - (953,538) - - - (953,538) 260,811 (692,727)
Other
comprehensive
income, net of
tax:
Fair value
movement
on investments - - - - - (779,930) (779,930) - (779,930)
Currency
translation
differences - - - - 1,406,196 - 1,406,196 (51,599) 1,354,597
---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Total
comprehensive
income for the
period - - (953,538) - 1,406,196 (779,930) (327,272) 209,212 (118,060) Transactions with owners: Grant of warrants - - - 972,628 - - 972,628 - 972,628 Exercise of warrants 708,581 982,430 - - - - 1,691,011 - 1,691,011 Issue of shares 1,088,226 5,548,097 - - - - 6,636,323 - 6,636,323 Distribution of capital on de-merger - (16,148,000) - - - - (16,148,000) - (16,148,000) Non-controlling interest - - - - - - - 24,727,158 24,727,158 Total equity at 31 December 2017 8,758,948 51,306,449 (9,725,332) 1,566,755 1,394,589 (779,930) 52,521,479 26,969,295 79,490,774 ---------------- --------- ------------ ----------- --------- ----------- ----------- ------------ ----------- ------------
Consolidated Statement of Cash Flows
For the ten months ended 31 December 2017
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Note
Cash flows from operating
activities
Loss before taxation (692,727) (1,720,067)
Adjustments for:
Depreciation property, plant
and equipment 13 50,369 9,892
Impairment of property, plant
and equipment 13 - 138,708
Impairment loss on de-merger 12 547,472 -
Finance income 8 (107,045) (1,093)
Finance costs 9 863,035 202,518
Share of profit in associate (3,610,066) -
Changes in working capital (1,144,094) 1,414,304
Net cash (used in) / generated
from operating activities (4,093,056) 44,262
------------ ------------
Cash flows from investing
activities
Finance income 8 107,045 1,093
Purchase of exploration and
evaluation assets 12 (1,261,590) (821,937)
Purchase of property, plant
and equipment - (25,996)
Net cash impact of acquisition
of Bushveld Vametco Limited 32 4,412,912 -
Net cash generated from /
(used in) investing activities 3,258,367 (846,840)
------------ ------------
Cash flows from financing
activities
Finance costs - (528,400)
Net proceeds from issue of
shares and warrants 25 1,691,011 3,200,381
Proceeds from convertible
bond issue (net of repayments) 21 6,545,000 -
Net repayments of other borrowings 21 (128,767) (2,535,000)
Net cash generated from financing
activities 8,107,244 136,981
------------ ------------
Net increase / (decrease)
in cash and cash equivalents 7,272,555 (665,597)
Cash and cash equivalents
at the beginning of the year 131,155 478,619
Effect of foreign exchange
rates (184,890) 318,133
Cash and cash equivalents
at end of the year 7,218,820 131,155
============ ============
The notes on pages 68 to 104 form part of these financial statements.
1. Corporate information and principal activities
Bushveld Minerals Limited ("Bushveld") was incorporated and domiciled in Guernsey on 5 January 2012 and admitted to the AIM market in London on 26 March 2012.
The company changed its reporting date from 28 February to 31 December during the period. These financial statements are for the ten months ended 31 December 2017 and the comparative figures are for the year ended 28 February 2017.
The Bushveld Group comprises Bushveld Minerals Limited and its subsidiaries as noted below.
During the year the Company acquired an effective 59.1% in Vametco Holdings (Pty) Limited, an operational vanadium mining company owned through the Company's 78.8% interest in Strategic Minerals Corporation. Vametco Holdings Limited own a processing plant and an operating open cast vanadium mine, situated about 6.5 km northeast of the town of Madibeng (formerly known as Brits) which is in the Bojanala Platinum District in the North West Province of the Republic of South Africa. Vametco Holdings Limited has approximately 480 employees.
Bushveld Resources Limited ("BRL") is an investment holding company formed to invest in resource-based vanadium and iron ore exploration companies in South Africa. The South African subsidiaries are Pamish Investments No. 39 (Proprietary) Limited ("Pamish 39") in which BRL holds a 64% equity interest, Amaraka Investments No. 85 (Proprietary) Limited ("Amaraka 85") in which BRL holds 68.5% equity interest and Frontier Platinum Resources (Proprietary) Limited in which BRL holds 100% equity interest. The minority shareholder in Pamish 39 is Izingwe Capital (Proprietary) Limited and the minority shareholder in Amaraka 85 is Afro Multi Minerals (Proprietary) Limited.
The Lemur subsidiaries are coal project development companies. The Lemur subsidiaries are the holder of 11 concession blocks in South West Madagascar covering the Imaloto Coal Basin, known as the Imaloto Coal Project and Extension.
As at 31 December 2017, the Bushveld Group comprised of:
Company Equity holding Country Nature of
and voting of incorporation activities
rights
Bushveld Minerals N/A Guernsey Ultimate holding
Ltd company
Bushveld Resources 100% Guernsey Holding company
Ltd(1)
Pamish Investments 64% South Africa Vanadium &
39 (Pty) Ltd(2) Iron ore exploration
Amaraka Investments 68.50% South Africa Vanadium &
85 (Pty) Ltd(2) Iron ore exploration
Frontier Platinum 100% South Africa Group support
(Pty) Ltd(2) services
Bushveld Energy 84% Mauritius Holding company
Ltd(1)
Bushveld Energy 100% South Africa Energy Development
(Pty) Ltd(6)
Bushveld Vametco 100% Guernsey Holding company
Limited(1)
Strategic Minerals 78.8% United Investment
Corporation(9) States Holding company
Vametco Holdings 74% South Africa Holding company
(Pty) Ltd(10)
Vametco Alloys 100% South Africa Mining and
(Pty) Ltd(11) manufacturing
company
Vametco Properties 100% South Africa Property owning
(Pty) Ltd(12) company
Lemur Holdings 100% Mauritius Holding company
Ltd(1)
Lemur Investments 100% Mauritius Holding company
Ltd(5)
Coal Mining Madagascar 99% Madagascar Coal exploration
SARL(7)
Imaloto Power Ltd(5) 100% Mauritius Holding company
Imaloto Power Project 99% Mauritius Power generation
Company company
SARL(8)
1 Held directly by Bushveld Minerals Limited
2 Held by Bushveld Resources Limited
3 Held by Greenhills Resources Limited
4 Held by Mokopane Tin Company (Pty) Limited
5 Held by Lemur Holdings Limited
6 Held by Bushveld Energy Limited
7 Held by Lemur Investments Ltd
8 Held by Imaloto Power Ltd
9 Held by Bushveld Vametco Ltd
10 Held by Strategic Minerals Corporation
11 Held by Vametco Holdings (Pty) Ltd
12 Held by Vametco Alloys (Pty) Ltd
These financial statements are presented in Pound Sterling (GBP) because that is the currency the Group has raised funding on the AIM market in the United Kingdom.
2 Adoption of new and revised standards
ACCOUNTING STANDARDS AND INTERPRETATIONS NOT APPLIED
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group:
Amendments to 1 January Amendments to provide requirements
IFRS 2: Classification 2018 on the accounting for the
and Measurement effects of vesting and
of Share-based non-vesting conditions
Payment Transactions* on the measurement of cash-settled
share-based payments, share-based
payment transactions with
a net settlement feature
for withholding tax obligations,
and a modification to the
terms and conditions of
a share-based payment that
changes the classification
of the transaction from
cash-settled to equity-settled.
--------------------------- --------- --------------------------------------
IFRIC 22 Foreign 1 January Provides requirements about
Currency Transactions 2018 which exchange rate to
and Advance Consideration* use in reporting foreign
currency transactions (such
as revenue transactions)
when payment is made or
received in advance.
--------------------------- --------- --------------------------------------
IFRS 9 Financial 1 January Replacement to IAS 39 and
Instruments 2018 is built on a logical,
single classification and
measurement approach for
financial assets which
reflects both the business
model in which they are
operated and their cash
flow characteristics. Also
addresses the so--called
'own credit' issue and
includes an improved hedge
accounting model to better
link the economics of risk
management with its accounting
treatment. It is a change
from incurred to expected
loss model.
--------------------------- --------- --------------------------------------
IFRS 15 Revenue 1 January Introduces requirements
from Contracts 2018 for companies to recognise
with Customers revenue to depict the transfer
(IFRS 15 clarifications of goods or services to
not EU-endorsed) customers in amounts that
reflect the consideration
to which the company expects
to be entitled in exchange
for those goods or services.
Also results in enhanced
disclosure about revenue
and provides or improves
guidance for transactions
that were not previously
addressed comprehensively
and for multiple--element
arrangements.
--------------------------- --------- --------------------------------------
IFRS 16 Leases* 1 January The new standard recognises
2019 a leased asset and a lease
liability for almost all
leases and requires them
to be accounted for in
a consistent manner. This
introduces a single lessee
accounting model and eliminates
the previous distinction
between an operating lease
and a finance lease.
--------------------------- --------- --------------------------------------
IFRS 17 Insurance 1 January The new standard requires
Contracts 2019 insurance liabilities to
be measured at a current
fulfillment value and provides
a more uniform measurement
and presentation approach
for all insurance contracts.
These requirements are
designed to achieve the
goal of a consistent, principle-based
accounting for insurance
contracts.
--------------------------- --------- --------------------------------------
IFRIC 23 Uncertainty 1 January The interpretation addresses
over 2019 the determination of taxable
Income Tax Treatments profit (tax loss), tax
bases, unused tax losses,
unused tax credits and
tax rates, when there is
uncertainty over income
tax treatments under IAS
12.
--------------------------- --------- --------------------------------------
*not yet endorsed by the EU
The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group, subject to any future business combinations.
3. Significant accounting policies
Basis of accounting
These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("EU adopted IFRS").
The consolidated financial statements have been prepared under the historical cost basis, except for the revaluation of certain financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies are set out below.
Going concern
The directors have considered the current financial position of the group and the likely future cash flows for the period of 12 months following the approval of these financial statements for the 10 months to 31 December 2017.
A capital raising was undertaken in March 2018 realising a net amount GBP15,108,742. The proceeds have been utilised to redeem the convertible bonds raised in September and December 2017.
The funding will also be utilised to develop the groups assets and for working capital requirements. Further cash flows will be available in due course from the operating subsidiary in the group.
The directors have considered the current financial position of the group and the likely future cash flows for the period of 12 months following the approval of these financial statements in preparing these financial statements. The directors consider that the company has sufficient funds for the next twelve months.
Basis of consolidation
Subsidiaries
Subsidiaries are all entities (including structured 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.
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 re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.
3 Significant accounting policies (continued)
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 IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary amounts reported by subsidiaries have been adjusted to conform to the group's accounting policies.
Disposal of subsidiaries
When the group ceases to have control any retained interest in the entity is re-measured 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.
Non-controlling interests
Non-controlling interests in subsidiaries are identified separately from the group's equity 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.
Associates
Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The group's investment in associates includes goodwill identified on acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The group's share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to share of profit/(loss) of associates in the income statement.
Profits and losses resulting from upstream and downstream transactions between the group and its associate are recognised in the group's financial statements only to the extent of unrelated investor's interests in the associates.
Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the group.
Dilution gains and losses arising in investments in associates are recognised in the income statement.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors that makes strategic decisions.
Foreign currencies
Functional and presentational currency
The individual financial statements of each group company are prepared in the currency of the primary economic environment in which they operate (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in Pound Sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Group companies
The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
a) assets and liabilities for each statement of financial position presented are translated at the closing rate;
b) 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
c) all resulting exchange differences are recognised in other comprehensive income.
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. Exchange differences arising are recognised in other comprehensive income.
Revenue recognition
Sale of goods/products
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, rebates and value added tax. Revenue from the sale of products is recognised when the significant risks and rewards of ownership of the product have transferred to the buyer, costs can be measured reliably, and receipt of the future economic benefits is probable. Significant risks and rewards of ownership pass when the title has passed to the customer and the goods have been delivered to a contractually agreed location.
Finance income
Interest revenue is recognised when it is probable that economic benefits will flow to the group and the amount of revenue can be measured reliably. Interest revenue 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.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax charge is based on taxable profit for the year. The group's liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the reporting date.
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, 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.
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 in profit or loss.
The recoverability of deferred 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 to sell and value in use) if that is less than the asset's carrying value. Impairment losses are recognised in 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
Property, plant and equipment are stated at historical cost less accumulated depreciation, except for Residential properties which is carried at fair value. Depreciation is calculated on the straight line method to write off the cost of each asset (less residual value) over its estimated useful life as follows:
Buildings and other improvements 20-25 years Plant and machinery 15-20 years Motor vehicles, furniture and equipment 4-10 years Decommissioning asset Life of mine
Investment property
Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in 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 profit or loss.
Repairs and maintenance is generally charged against income 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 de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.
Impairment of property, plant and equipment
At each statement of financial position 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 to which the asset belongs.
Where there has been a change in economic conditions that indicate a possible impairment in a cash-generating unit, the recoverability of the net book value relating to that field is assessed by comparison with the estimated discounted future cash flows based on management's expectations of future oil prices and future costs.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.
Inventories
Inventories are valued at the lower of cost or estimated net realisable value. Cost is determined on the following basis:
Raw materials weighted average cost Consumable stores weighted average cost Work in progress weighted average cost Finished product weighted average cost
The cost of finished product and work in progress comprises of raw materials, direct labour, other direct costs, and related production overheads (based on normal operating capacity) but excludes borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less costs of completion and selling expenses.
Financial assets and liabilities
Financial assets and financial liabilities are recognised in the group's 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. All financial assets are recognised as loans and receivables or available for sale investments and all financial liabilities are recognised as other financial liabilities.
Trade and other receivables
Trade and other receivables are stated initially recognised at the fair value of the consideration receivable less any impairment. Impairment provisions are recognised when there is objective evidence that the group will be unable to collect all of the amounts due under the terms of the receivable, the amount of such a provision being the difference
between the carrying amount and the present value of the future expected cash flows associated with the impaired receivable.
Trade and other receivables are subsequently measured at amortised cost, less any impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits on a term of not greater than three months.
Trade and other payables
Trade and other payables are initially recognised at fair value. They are subsequently measured at amortised cost using the effective interest rate method.
Available for sale financial assets
Listed shares held by the group that are traded in an active market are classified as being available for sale and are stated at fair value. The fair value of such investments is determined by reference to quoted market prices.
Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve with the exception of impairment losses. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is reclassified to profit or loss.
Dividends on available for sale equity instruments are recognised in profit or loss when the group's right to receive the dividends is established.
Financial liabilities and equity
Financial liabilities (including loans and advances due to related parties) and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. When the terms of a financial liability are negotiated with the creditor and settlement occurs through the issue of the Company's equity instruments, the equity instruments are measured at fair value and treated as consideration for the extinguishment of the liability. Any difference between the carrying amount of the liability and the fair value of the equity instruments issued is recognised in profit or loss.
Convertible loans
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.
The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar nonconvertible 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.
Warrants
The warrants issued by the company are recorded at fair value on initial recognition net of transaction costs. The fair value of warrants granted is recognised as an expense or as share issue costs, with a corresponding increase in equity. The fair value of the warrants granted is measured using the Black Scholes valuation model for options without market conditions and using the binomial method for those with market conditions, taking into account the terms and conditions under which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of warrants that vest.
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset.
Provisions
General
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 statement or comprehensive income, 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 liability
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 Program Report. Annual increases in the provisions relating to change in the net present value of the provision and inflationary increases are shown separately in the statement of comprehensive income 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 statement of comprehensive income 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 the statement of comprehensive income in the year to which they relate.
Use of estimates and judgements
In the application of the group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. In particular, information about significant areas of estimation uncertainty considered by management in preparing the financial statements is described below:
i. Acquisition accounting
Management's critical estimates and judgements in preparing the financial statements relate to the fair value of the consideration payable and net assets acquired on acquisition of the Vametco Group (see note 32).
ii. Decommissioning and rehabilitation obligations
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 (see note 24) are further influenced by changing technologies, political, environmental, safety, business and statutory considerations.
iii. Asset lives and residual values
Property, plant and equipment are depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
iv. Post-retirement employee benefits
Post-retirement medical aid liabilities are provided for certain existing employees (see note 23). Actuarial valuations are based on assumptions which include employee turnover, mortality rates, the discount rate, health care inflation costs and rates of increase in costs.
v. Surface rights liabilities
The group has provided for surface lease costs that would accrue to the owners of the land on which the mine is built (see note 26). The quantum of the amounts due post implementation of the MPRDA and the granting of the new order mining right to the group is somewhat uncertain and need to be negotiated with such owners. The group has conservatively accrued for possible costs in this regard, but the actual obligation may be materially different when negotiations with the relevant parties are completed.
vi. Impairment of exploration and evaluation assets
Determining whether an exploration and evaluation asset is impaired requires an assessment of whether there are any indicators of impairment, including by reference to specific impairment indicators prescribed in IFRS 6 - Exploration for and Evaluation of Mineral Resources. If there is any indication of potential impairment, an impairment test is required based on value in use of the asset. The valuation of intangible exploration assets is dependent upon the discovery of economically recoverable deposits which, in turn, is dependent on future iron ore and tin prices, future capital expenditures and environmental and regulatory restrictions. The directors have concluded that there are no indications of impairment in respect of the carrying value of intangible assets at 31 December 2017 based on planned future development of the projects and current and forecast commodity prices. See note 12 for details of exploration and evaluation assets.
4 Segmental reporting
The reporting segments are identified by the directors of the group (who are considered to be the chief operating decision makers) by the way that group's operations are organised. As at 31 December 2017 the group operated within three operating segments, mineral exploration activities for iron ore and vanadium, vanadium mining and production and coal. Activities take place in South Africa (iron ore and vanadium) and Madagascar (coal).
Segment revenue and results
The following is an analysis of the group's revenue and results by reportable segment.
Vanadium Coal Vanadium
and iron exploration mining Total
ore exploration and
production
GBP GBP GBP GBP
Period ended
31 December
2017
Results
Revenue - - 2,210,430 2,210,430
Associated costs (606,369) (488,402) (957,106) (2,051,877)
Segmental profit
/ (loss) (606,369) (488,402) 1,253,324 158,553
================= =================== ================== ==================
In the prior period, the vanadium mining and production segment was not present, but tin exploration was a reported segment prior to the de-merger (note 12).
Vanadium Coal Tin exploration
and exploration Total
iron
ore
exploration
GBP GBP GBP GBP
Period ended
28 February
2017
Results
Revenue - - - -
Operating segmental
loss (50,516) (256,932) (239,225) (546,673)
Segmental loss (50,516) (256,932) (239,225) (546,673)
--------------- ------------------- ---------------------- ----------------
The reconciliation of segmental gross loss to the group's loss before tax is as follows:
10 months 12months
ended ended
31 December 28 February
2017 2017
GBP GBP
Segmental profit / (loss) 158,553 (546,673)
Unallocated costs (3,176,740) (971,969)
Share of results of associate 3,610,066 -
Impairment - de-merger of tin assets (547,472) -
Finance income 107,045 1,093
Finance costs (836,035) (202,518)
Loss before tax (684,583) (1,720,067)
=================== ===================
Other segmental information
Segmental assets and liabilities disclosed in the reports to the Board of directors, for the purpose of resource allocation and assessment of segmental performance, consist of the amounts capitalised as intangible exploration expenditure. All other assets and liabilities are classified as unallocated.
Vanadium Vanadium
and Iron mining Total
ore exploration and
production
GBP GBP GBP
31 December
2017
Intangible
assets - exploration
and evaluation 45,110,207 - 45,110,207
----------------- ------------ -------------
Total reportable
segmental net
(liabilities)/assets 45,110,207 49,823,089 94,933,296
----------------- ------------ -------------
Unallocated
net liabilities (15,442,522)
Total consolidated
net assets 79,490,774
=============
Vanadium Tin Coal
and exploration exploration Total
Iron
ore
exploration
GBP GBP GBP GBP
28 February
2017
Intangible
assets - exploration
and evaluation 41,933,596 18,268,133 - 60,201,729
Total reportable
segmental net
(liabilities)/assets (78,383) 627,499 (14,144) 534,972
Unallocated
net assets - - - 992,473
Total consolidated
net assets 61,729,174
=============
5. Revenue
10 months ended 12 months ended
31 December 2017 28 February 2017
GBP GBP
Revenue comprises 2,210,430 -
the invoiced amount
of goods to customers,
net of value added
tax - sale of goods
6. Administrative expenses by nature
10 months ended 12 months
31 December ended
2017 28 February
GBP 2017
GBP
The loss for the year has been arrived at after
charging:
Staff costs 999,526 422,634
Commission paid 421,545 114,250
Depreciation of PPE 50,369 9,892
Impairment of investment - 138,708
Professional fees 758,932 216,422
Acquisition expenses 744,000 621,610
Foreign exchange 588,235 -
loss
Other 177,951 26,571
3,740,558 1,550,087
================= ==============
7. Staff costs
Key management personnel have been identified as the Board of directors. The remuneration of directors is disclosed in the Remuneration Report on page 58.
Included in staff costs above, are emoluments of GBP91,667 (February 2017: GBP108,333) in respect of the highest paid Director.
No pension contributions were made on behalf of the Directors and other staff members.
8. Finance income
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Bank interest 107,045 1,093
============= =============
9. Finance costs
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Interest on convertible 233,610 -
bonds
Other finance costs 629,425 202,518
------------- -------------
863,035 202,518
============= =============
8.
10. Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
10 months ended 12 months ended
31 December 2017 28 February 2017
Factors affecting tax for the period / year: GBP GBP
Loss before taxation (684,583) (1,720,067)
Loss before taxation multiplied by Guernsey corporation tax rate of 0% as - -
explained below
Tax assessed for the year - South Africa 8,114 -
Taxation expense for the period 8,114 -
================== ==================
Management believe that any unrecognised deferred tax assets relating to the accumulated losses in the subsidiary undertakings of the group, would be immaterial to these financial statements.
11. Loss per share
From continuing operations
The calculation of a basic loss per share of 0.12 pence (February 2017: 0.28 pence loss), is calculated using the loss for the year attributable to the owners of the company of GBP953,538 (February 2017: GBP1,705,920) and the weighted average number of shares in issue during the year of 789,578,440 (February 2017: 601,801,830). The dilutive effect of other shares in issue would be immaterial to the profit per share.
12. Intangible exploration and evaluation assets
Vanadium
and Iron Tin Total
ore GBP GBP
GBP
As at 1 March
2016 38,649,101 17,737,393 56,386,494
Exchange differences 1,633,034 530,740 2,163,774
Additions 1,651,461 - 1,651,461
As at 28 February
2017 41,933,596 18,268,133 60,201,729
---------------------- ----------- ------------- -------------
As at 1 March
2017 41,933,596 18,268,133 60,201,729
Exchange differences 1,915,021 (1,572,661) 342,360
Impairment /
loss on disposal - (16,695,472) (16,695,472)
Additions 1,261,590 - 1,261,590
As at 31 December
2017 45,110,207 - 45,110,207
---------------------- ----------- ------------- -------------
The Company's subsidiary, Bushveld Resources Limited has a 64% interest in Pamish Investment No 39 (Proprietary) Limited ("Pamish") which holds an interest in Prospecting right 95 ("Pamish 39"). Bushveld Resources Limited also has a 68.5% interest in Amaraka Investment No 85 (Proprietary) Limited ("Amaraka") which holds an interest in Prospecting right 438 ("Amaraka 85").
Under the agreements to acquire the licences within Bushveld Resources, the group is required to fully fund the exploration activities up to the issue of the corresponding mining licences. As the non-controlling interest party retains their equity interest, the funding of their interest is accounted as deemed purchase consideration and is included in the additions in the year to exploration activities. A corresponding increase is credited to non-controlling interest.
Brits Vanadium Project
The Company is in a process to secure regulatory approval in terms of section 11 of the Mineral and Petroleum Resources Development Act (MPRDA) for change of control in respect of the acquired Sable Metals & Mining Ltd's subsidiaries. Following approval, Bushveld Minerals will commence with activities to delineate the shallow resource on the Uitvalgrond farm portion.
-- NW 30/5/1/1/2/11069 PR - held through Great Line 1 (Pty) Ltd -- NW 30/5/1/1/2/11124 PR - held through Great Line 1 (Pty) Ltd -- GP 30/5/1/1/02/10142 PR - held through Gemsbok Magnetite (Pty) Ltd
Disposal of Tin assets
The principal tin assets of the Bushveld Group as at 28 February 2017, were the Mokopane Tin Project, the Zaaiplaat Tin Tailings Project, and its interest in the Uis Tin Project in Namibia.
The Directors believe that the tin assets now represent an attractive stand-alone platform with a strong and dedicated management team in place to deliver long-term shareholder value. The Directors also believe that these assets represent a significant value opportunity that is not being fully exploited within Bushveld Minerals.
For this reason, the Tin assets were demerged from the group effective 9 November 2017.
As described in the Company's circular to shareholders dated 2 October 2017 (the "Circular"), the demerger constituted a sub-division of ordinary shares in the Company into ordinary shares and redeemable shares representing 85% of the deemed value of Greenhills Resources Limited ("Greenhills"), with the redeemable shares being redeemed for such deemed value in return for the Company transferring 85% of Greenhills to AfriTin Mining Limited ("AfriTin Mining"), and AfriTin Mining issuing Bushveld Shareholders with new AfriTin Shares.
The company retained an interest in these assets through its investment in shares (see note 19). A loss of GBP547,000 has been recognised in the consolidated income statement in respect of the de-merger .
13. Property, plant and equipment
Buildings and Motor vehicles
other Plant and Furniture
and Decommissioning Assets under
improvements machinery Equipment assets construction Total
GBP GBP GBP GBP GBP GBP
Cost
As at 1 March 2016 - 538,735 - - - 538,735
Additions - 25,996 - - - 25,996
Exchange differences - 186,190 - - - 186,190
At 28 February
2017 - 750,921 - - - 750,921
------- ---------- -------------- --------------- ------------ ----------
Disposals - (301,185) - - - (301,185)
Exchange differences - 182,448 - - - 182,448
Additions due to
acquisition 452,703 30,606,619 21,249 1,116,965 692,541 32,890,077
At 31 December
2017 452,703 31,238,803 21,249 1,116,965 692,541 33,522,261
======= ========== ============== =============== ============ ==========
Depreciation
As 1 March 2016 - 217,529 - - - 217,529
Impairment charge - 138,708 - - - 138,708
Depreciation charge
for the year - 9,892 - - - 9,892
Exchange differences - 79,882 - - - 79,882
At 28 February
2017 - 446,011 - - - 446,011
------- ---------- ------ --------- -------- ----------
Depreciation charge
for the year - 50,369 - - - 50,369
Exchange differences - 103,276 - - - 103,276
At 31 December
2017 - 599,656 - - - 599,656
------- ---------- ------ --------- -------- ----------
Net Book Value - - - - - -
At 31 December
2017 452,703 30,639,147 21,249 1,116,965 692,541 32,922,605
======= ========== ====== ========= ======== ==========
At 28 February
2017 - 304,910 - - - 304,910
======= ========== ====== ========= ======== ==========
14. Investment properties
31 December
2017
GBP
Fair value at -
1 March
Acquisition (note
32) 2,448,489
-------------
Fair value at
end of the year 2,448,489
=============
Land and buildings comprise residential housing in Brits and Elandsrand, North West Province.
Investment properties are stated at fair value, which has been determined based on valuations performed by Mr WJ van Aardt, an accredited independent valuer, as at 31 December 2017. Mr W J van Aardt, is a Professional Associated Valuer (South Africa) with registration number F139714. The fair value represents the amount at which the assets could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arms' length transaction.
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 for locations where properties are situated were obtained from South Africa.
15. Deferred tax
31 December 28 February
2017 2017
GBP GBP
As at 1 March - -
2017
Arising on acquisition 2,427,455 -
(note 32)
As at 31 December 2,427,455 -
2017
============ ============
16. Inventories
31 December 28 February GBP
2017 2017
GBP GBP
Finished goods 4,800,578 -
Work in progress 3,255,013 -
Raw materials 1,198,704 -
Consumable stores 3,473,149 -
------------
Inventories 12,727,444 -
============ =======================
The amount of write-down of inventories due to net realisable value provision requirement is nil.
17. Trade and other receivables
31 December 28 February
2017 2017
GBP GBP
Trade receivables 6,136,121 192,937
Other receivables 4,150,145 2,314,090
Trade and other receivables 10,286,266 2,507,027
============ ============
Trade receivables are non-interest bearing and are generally on 15-90 day terms. There were no indicators of impairment at the year end. At 31 December 2017 the group had one customer which accounted for approximately 90% of trade receivables.
The directors consider that the carrying amount of trade and other receivables approximates to their fair value due to their short- term nature. As at the year end, no receivables are past their due date, hence no allowance for doubtful receivables is provided.
The total trade and other receivables denominated in South African Rand amount to GBP5,537,710 (February 2017: GBP464,041) and denominated in Australian Dollars amount to GBPnil (February 2017: GBP1,237).
18. Restricted investment
31 December
2017
GBP
Rehabilitation
trust fund
As at 1 March -
2017
Acquisition (note
32) 2,120,425
As at 31 December
2017 2,120,425
--------------------
Rehabilitation
insurance fund
As at 1 March -
2017
Acquisition (note
32) 1,724,029
As at 31 December
2017 1,724,029
--------------------
Total restricted
investment 3,844,454
The group is required by statutory law in South Africa to hold these restricted investments in order to meet decommissioning liabilities on the statement of financial position (note 23).
19. Available-for-sale financial asset
31 December
2017
GBP
AIM listed shares
As at 1 March -
2017
Additions 2,004,556
Fair value movement (779,930)
As at 31 December
2017 1,224,626
--------------------
The Group measures the fair value of an instrument using the quoted price in an active market for that instrument (a level 1 valuation technique). A market is regarded as active if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
20. Cash and cash equivalents
31 December 28 February
2017 2017
GBP GBP
Cash at hand and in bank 7,218,820 131,155
===========
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 directors consider that the carrying amount of cash and cash equivalents approximates their fair value.
The total cash and cash equivalents denominated in South African Rand amount to GBP4,810,123 (February 2017: GBP92,913), denominated in Australian Dollars GBPnil (February 2017: GBP3,154) and denominated US Dollars GBP543,473 (February 2017: GBPnil).
21. Borrowings and other financial liabilities
31 December 28 February
2017 2017
GBP GBP
Short-term loans - 128,767
Convertible loan notes 5,815,092 -
Other financial liabilities 1,012,490
6,827,582 128,767
During the year the company completed a fundraising of GBP8.0 million through the creation and issuance of convertible bonds, with denomination of GBP25,000 each, which bear a coupon of 7.5 per cent per annum and have a maturity date of two years from the date of issuance (the "Maturity Date") (the "Convertible Bonds"). The Convertible Bonds were issued at 98 per cent of face value in two tranches, the first tranche of GBP4,500,000 and the second tranche of GBP3,500,000.
The Convertible Bonds are convertible into BMN ordinary shares at a price equal to the average of five days volume weighted average price (as published by Bloomberg) determined over the ten trading days immediately prior to receipt of a conversion notice by the Company from the Investor.
A total of 11,111,111 warrants over BMN ordinary shares were issued. The warrants have a three-year term, a strike price of 14.4p and are exercisable at any time (see note 25). The fair value of the warrants have been treated as issue costs and included in the effective interest rate calculation.
The company has the option to redeem the Convertible Bonds prior to the Maturity Date at 105 per cent of the face value of the outstanding Convertible Bonds to be redeemed. All bonds have been redeemed or settled since the year end (see note 31).
Other financial liabilities include the fair value of the conversion option in the loan notes, determined based on discounting the loan note face value using a rate of 7% based on similar instruments without a conversion option.
The effective interest rate used to amortise the convertible bonds is 21.5%.
22. Trade and other payables
31 December 28 February
2017 2017
GBP GBP
Trade payables 8,059,604 254,574
Other payables 4,729,604 109,137
Accruals 2,217,991 922,629
15,007,199 1,286,340
============ ============
Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit year taken for trade purchases is 30 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 approximates to their fair value.
The total trade and other payables denominated in South African Rand amount to GBP7,647,159 (February 2017: GBP312,756), GBPnil (February 2017: GBP18,535) is denominated in Australian Dollars and GBP3,531,958 is denominated in US Dollars (February 2017: GBPnil).
23. Post-retirement medical liability
The following tables summarise the components of the net benefit expense recognised in the statement of comprehensive income and the amounts recognised in the statement of financial position.
31 December 2017 28 February
2017
GBP GBP
Benefit liability
As at 31 March - -
2017
Acquisition (note 2,063,042 -
32)
Actuarial changes - -
arising from
changes in financial
assumption
-------------------------- ----------------------
2,063,042 -
========================== ----------------------
The benefit comprises medical aid subsidies provided to qualifying retired employees. Actuarial valuations are made annually, and the most recent valuation was made on 31 December 2014.
The main assumptions in the valuation are:
Discount rate 10.10% Health care cost inflation 8.80% Average retirement age 76.3 years
A one percentage point change in the assumed rate of healthcare costs would have the following effect on the present value of the unfunded obligation: Plus 1%: GBP2.2 million; Less 1%: GBP1.85 million.
A one percentage point change in the assumed interest rate would have the following effect on the present value of the unfunded obligation; Plus 1%: GBP0.2 million; Less 1%: GBP1.8 million.
24. Environmental rehabilitation liability
31 December 28 February
2017 2017
GBP GBP
As at 1 March - -
2017
Arising on acquisition 4,943,249 -
(note 32)
As at 31 December 4,943,249 -
2017
============ ============
Provision for future environmental rehabilitation costs are made on a progressive basis. Estimates are based on costs that are regularly reviewed and adjusted as appropriate for new circumstances.
The rehabilitation provision represents the present value of rehabilitation costs relating to the mine sites, which are expected to be incurred up to 2037, which is when the producing mine properties are expected to cease operations. The provisions are based on management's estimates and assumptions based on the current economic environment. Actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works and timing of when the mine ceases operation.
The discount rate used in the calculation of the provision as at 31 December 2017 was 9.79%.
25. Share capital and share premium
Number Nominal Share premium Total share capital
of shares value of and premium
issued shares
and fully of 1 pence GBP GBP
paid each
GBP
Balance at 1 March 2016 486,337,438 4,863,373 59,927,541 64,790,914
Shares issued for warrants exercised 12,305,401 123,054 172,276 295,330
Other issues 197,571,432 1,975,714 1,250,286 3,226,000
Share issue costs - - (426,180) (426,180)
Balance at 28 February 2017 696,214,271 6,962,141 60,923,922 67,886,063
------------ ----------- ------------- -------------------
Balance at 28 February 2017 696,214,271 6,962,141 60,923,922 67,886,063
Shares issued for warrants exercised 70,858,086 708,581 982,430 1,691,011
Shares issued in respect of convertible
bonds 13,056,184 130,562 919,438 1,050,000
Other issues - Dawnmin 41,000,000 410,000 240,000 650,000
Distribution of capital on de-merger - - (16,148,000) (16,148,000)
Shares issued on acquisition 54,766,364 547,664 4,388,659 4,936,323
Balance at 31 December 2017 875,894,905 8,758,948 51,306,449 60,065,397
------------ ----------- ------------- -------------------
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 2017 the Company owns 670,000 (February 2017: 670,000) treasury shares with a nominal value of 1 pence.
Dawnmin
On 15 June 2017, Greenhills Resources Limited ("Greenhills") acquired a 49.5% interest in Dawnmin Africa Investments Limited ("Dawnmin") from a consortium of Namibian shareholders. In accordance with the terms of the SSCA, 41 million ordinary shares of 1 pence each in Bushveld ("Consideration Shares") were issued to the Sellers.
Capital reduction on de-merger of Greenhills
As explained in note 12, on 9 November 2017, the group completed a de-merger of Greenhills Resources.
Upon Admission of AfriTin, the following occurred:
-- the sub-division of the Company's share capital into Ordinary Shares and Redeemable Shares (on a one for one basis);
-- 85% of the issued share capital of Greenhills Resources was transferred by the Company to AfriTin at the Deemed Value;
-- AfriTin issued the Demerger Shares to the Bushveld Shareholders; and
-- the Company redeemed the Redeemable Shares, at an aggregate redemption price equal to the Deemed Value, which will be deemed to have been satisfied by the Company effecting the transfer of 85% of the Greenhills Shares to AfriTin and procuring the issue by AfriTin of the Demerger Shares to the holders of the Redeemable Shares in accordance with the Demerger Agreement.
The Demerger constituted a reduction of capital by Bushveld Minerals and an indirect distribution to Bushveld Shareholders of 85% of their indirect interest in Greenhills Resources.
26. Provisions
Leave Performance Surface Other Total
pay and bonus lease
bonus GBP GBP GBP GBP
GBP
Balance at - - - -
1 March 2017
Acquired during
the period 688,945 958,655 851,558 74,131 2,573,289
--------- ------------
Balance at
31 December
2017 688,945 958,655 851,558 74,131 2,573,289
--------- ------------ ========= ======== ==========
Leave pay and bonus
Leave pay represents employee leave days due multiplied by their cost to the company employment package. The bonus represents the estimated amount due to employees based on their approved bonus scheme.
Performance bonus
The performance bonus represents an incentive bonus due to senior employees, calculated in terms of an approved scheme based on the company's operating results.
27. Warrants
The following warrants were granted during the 10 months ended 31 December 2017:
Warrants granted ---------------------- ----------- ----------- ---------------------- Date of grant 07/04/2017 15/09/2017 18/12/2017 Number granted 15,197,368 6,332,236 4,925,073 Contractual life 3 years 3 years 3 years Estimated fair value GBP0.04 GBP0.03 GBP0.02 per warrant ----------------------- ----------- ----------- ----------------------
The following warrants were granted during the year ended 28 February 2017:
Warrants granted ---------------------- ----------- ----------- ----------- ----------- Date of grant 27/10/2016 01/09/2016 01/09/2016 07/06/2016 Number granted 5,357,143 3,866,667 19,333,334 24,166,667 Contractual life 3 years 5 years 2 years 2 years Estimated fair value GBP0.004 GBP0.007 GBP0.003 GBP0.005 per warrant ---------------------- ----------- ----------- ----------- ----------- Date of grant 07/06/2016 07/06/2016 02/06/2016 07/06/2016 Number granted 434,000 652,000 4,833,333 25,000,000 Contractual life 4 years 4 years 5 years 2 years Estimated fair value GBP0.003 GBP0.005 GBP0.01 GBP0.05 per warrant ---------------------- ----------- ----------- ----------- -----------
The estimated fair values were calculated by applying the Black Scholes pricing model. The model inputs were:
Warrants scheme ---------------------- ----------- ----------- ----------- Date of grant 07/04/2017 15/09/2017 18/12/2017 Share price at grant date 8p 9p 8p Exercise price 6.9p 14.2p 14.2p Expected life 12 months 12 months 2 years Expected volatility 66% 66% 66% Expected dividends Nil Nil Nil Risk-free interest rate 3.00% 3.00% 3.00%
The warrants in issue during the year are as follows:
Number of Weighted
warrants average
exercise
price
GBP
-------------------------------- ------------- ----------
Outstanding at 1 March 2017 81,865,718 0.03
Granted during the 10 months
to 31 December 2017 26,454,677 0.09
Exercised during the 10 months
to 31 December 2017 (83,193,487) 0.02
Outstanding at 31 December
2017 25,156,980 0.08
Exercisable at 30 December
2017 25,156,980 0.08
-------------------------------- ------------- ----------
The warrants outstanding at the year-end have a weighted average exercise price of GBP0.08, with a weighted average remaining contractual life of 2.2 years.
The group has recognised a charge amounting to GBP972,628 during the 10 months (year to February 2017: GBP426,180).
28. 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 financial statements.
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 the reporting date, the group had borrowings of GBP6,827,582 which have been fully settled post year end.
The capital structure of the group consists of cash and cash equivalents and equity, comprising issued capital and retained losses. The group is not subject to any externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted including the criteria for recognition, the basis of measurement and the bases for recognition of income and expenses for each class of financial asset, financial liability and equity instrument are disclosed in note 3.
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 at bank -- Trade and other payables -- Borrowings -- Investments in listed shares
Categories of financial instruments
The group holds the following financial assets:
31 December 28 February
2017 2017
GBP GBP
Loans and receivables
Trade and other receivables 10,286,266 2,507,027
Restricted investment 3,844,454 -
Cash and cash equivalents 7,218,820 131,155
Available for sale 1,224,626 -
financial assets
Total financial assets 22,574,166 2,638,182
============ ============
The group holds the following financial liabilities:
31 December 28 February
2017 2017
GBP GBP
Other financial liabilities
Trade and other payables 15,007,199 1,286,340
Borrowings 5,676,927 128,767
------------ ------------
Total financial liabilities 20,684,126 1,415,107
============ ============
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 polices 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:
Credit risk
Credit risk arises principally from the group's cash balances with further risk arising due to its other receivables and available-for-sale investments. Credit risk is the risk that the counterparty fails to repay its obligation to the group in respect of the amounts owed. The group gives careful consideration to which organisations it uses for its banking services in order to minimise credit risk.
It is the group's policy that all customers and suppliers who wish to trade on credit terms are subject to credit verification procedures. Credit risk arises from credit exposure to customers, including outstanding receivables and
committed transactions.
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.
The group's credit risk is considered by counterparty, geography and by currency. The group has a significant concentration of cash held on deposit with large banks in South Africa, Mauritius and the United Kingdom and America with A ratings and above (Standard and Poors).
The concentration of credit risk by currency was as follows:
31 December 28 February
2017 2017
Currency GBP GBP
Sterling 1,996,281 35,088
South African Rand 4,810,123 92,913
United States Dollar 412,416 3,154
------------ ------------
7,218,820 131,155
============ ============
At 31 December 2017, the group held no collateral as security against any financial asset. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the group's maximum exposure to credit risk without taking account of the value of any collateral obtained. At 31 December 2017, no financial assets were past their due date. As a result, there has been no impairment of financial assets during the year. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows. Management considers the above measures to be sufficient to control the credit risk exposure.
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 of directors. 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, which have high credit ratings and its cash requirements are anticipated via the budgetary process. At 31 December 2017, the group had GBP7,218,820 (February 2017: GBP131,155) of cash reserves.
Market risk
The group's activities expose it primarily to the financial risk of changes in foreign currency exchange rates and interest rates.
Interest rate risk
With the exception of cash and cash equivalents, the group's only interest-bearing assets or liabilities were the convertible loan notes issued during the year (see note 21), which carry a fixed rate of interest and have been redeemed or settled in full subsequent to the reporting date. The group was therefore exposed to minimal interest rate risk during the year. For this reason, no sensitivity analysis has been performed regarding interest rate risk.
Foreign exchange risk
As highlighted earlier in these financial statements, the functional currency of the group is Pound Sterling. The group also has foreign currency denominated assets and liabilities. Exposures to exchange rate fluctuations therefore arise. The carrying amount of the group's foreign currency denominated monetary assets and liabilities, all in Pound Sterling, are shown below:
31 December 28 February
2017 2017
GBP GBP
Cash and cash equivalents 5,277,171 96,067
Other receivables 4,150,145 465,278
Trade and other payables (15,007,199) (331,291)
------------- ------------
(5,579,883) 230,054
============= ============
The group is exposed to a level of foreign currency risk. Due to the minimal level of foreign transactions; the directors currently believe that foreign currency risk is at an acceptable level.
The group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.
The following table details the group's sensitivity to a 10% increase and decrease in Pound Sterling against the Rand and the US Dollar. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates. The table below shows the effect of a 10% weakening and strengthening of Pound Sterling against the Rand:
Rand currency Rand currency
impact strengthening impact weakening
10 months to 31 December 2017 GBP GBP
Assets 15,913,715 19,450,096
Liabilities (15,982,262) (19,533,876)
----------------------- -------------------
(68,547) (83,780)
================================== ======================= ===================
US$ US$
10 months to 31 December 2017 impact strengthening impact weakening
GBP GBP
Assets 1,218,602 (1,489,402)
Liabilities (23,262) 28,431
------------------------ --------------------
1,195,340 (1,460,971)
================================== ======================== ====================
29. Operating lease commitments
The group had total commitments at the reporting date under non-cancellable operating leases falling due as follows:
31 December 28 February
2017 2017
Land and Land and
buildings buildings
GBP GBP
Within one year 142,782 135,730
Between one and two
years 284,760 145,255
427,542 280,985
============ ============
30. Contingent liabilities
As required by the Minerals and Petroleum Resources Act (South Africa), a guarantee amounting to GBP4,862,328 before tax and GBP3,500,896 after tax was issued in favour of the Department of Mineral Resources for the unscheduled closure of the mine. This guarantee was issued on condition that a portion be deposited in cash with Guardrisk Insurance Company Ltd with restricted use by the Group, as per the below:
The restricted cash disclosed as a current asset consist of GBP2,112,835 (2016: GBPnil) paid to lnvestec Bank Limited and GBP1,731,619 (2016: GBPnil) paid to Guardrisk Insurance Company Ltd, to enable Guard risk Insurance Company Ltd to issue a guarantee to the Department of Mineral Resources for the mine's environmental rehabilitation obligation. The insurance company deposited this balance in a Money Market account and interest at a rate of 5.75% is earned on the net credit balance. The guarantee is valid for three years, commencing on 1 April 2015 and the funds are only available if the agreement is terminated with a three months' notice period. The contract will be renewed on 1 April 2018.
31. Capital commitments
31 December 28 February
2017 2017
GBP GBP
Authorised and contracted 2,172,737 -
for
Authorised but not 1,143,463 -
contracted for
3,316,200 -
============ ============
32. Acquisition of subsidiary
On 21 December 2017, the group completed the acquisition of 55 per cent of Bushveld Vametco, being all the ordinary shares in Bushveld Vametco not currently owned by the Company ("Acquisition"). The Acquisition constituted a reverse takeover under the AIM Rules and was therefore subject to shareholder approval and re-admission of the Enlarged group to trading on AIM ("Admission"). Following the Acquisition, the Company holds 100 per cent. of the issued share capital of Bushveld Vametco Limited ("BVL") and, through BVL, owns a 78.8 per cent. economic interest in Strategic Minerals Corporation. Strategic Minerals Corporation ("SMC"), in turn holds a 75 per cent. interest in Vametco Holdings Limited, which has a 100 per cent. interest in the Vametco vanadium mine, a high quality, low cost mine and plant producing a trademark protected vanadium product and a global vanadium customer base.
The Acquisition increased the Company's indirect interest in Vametco Holdings from 26.6 per cent. to 59.1 per cent and resulted in the group obtaining control, thus enabling it to fully consolidate the SMC group in its financial statements from the date of Acquisition. The Directors believe that the Acquisition benefits the Company and its shareholders as follows:
-- Increased exposure to vanadium, a commodity with a robust and growing demand profile amid a constrained and concentrated supply environment resulting in a sustained structural deficit with no significant new supply anticipated in the near future;
-- Bushveld owns a majority shareholding in a high grade, low-cost open-cast and simple mining proposition with access to brownfield processing infrastructure that is being acquired for considerably less than its replacement cost;
-- Vametco enjoys a significant c.3 per cent. share of the global vanadium market;
-- The vanadium price has enjoyed a strong performance in 2017 with prices increasing by 54% (source: Metal Bulletin) and the trading price being in excess of US$40/kgV (at the end of December 2017);
-- The production base is planned to expand to over 5,000 mtV per annum by 2020, supported by one of the largest primary vanadium resource bases in the world (under the ownership of Bushveld);
-- Productivity initiatives targeting further production cost efficiencies;
-- Vametco has the potential to diversify its product range beyond its Nitrovan(R) product; and
-- The Acquisition is further aligned with the Company's aspirations in the global energy storage space by providing capacity for potential electrolyte manufacturing.
32. Acquisition of subsidiary (continued) A. Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred.
Note GBP
================================ ====== ===========
Cash 3,336,744
---------------------------------------- -----------
Equity instruments (54,766,364
ordinary shares) I 4,936,425
-------------------------------- ------ -----------
Deferred consideration II 739,391
-------------------------------- ------ -----------
EBITDA earn out III 3,717,286
-------------------------------- ------ -----------
12,729,846
--------------------------------------- -----------
I. Equity instrument issued
The fair value of the ordinary shares issued was based on the listed share price of the Company of 9 pence per share at the time of acquisition.
II. Deferred consideration
The group has agreed to pay the selling shareholder two deferred payments of US$0.6 million each, payable following publication of the accounts for Vametco Holdings Limited for respectively the years ending 31 December 2018 and 31 December 2019. The consideration has been discounted at a rate of 12.5%.
III. EBITDA earn out
A final payment is payable on publication of the Vametco Holdings Limited accounts for the year ended 31 December 2020, to be calculated by reference to the EBITDA of Vametco Holdings Limited for the period covered by its 2020 accounts. The consideration has been calculated based on forecast 2020 EBITDA and has been discounted at a rate of 12.5%.
Acquisition related costs
The group incurred acquisition-related costs of GBP744,000. These costs have been included in 'administration expenses'.
32. Acquisition of subsidiary (continued) B. Identifiable assets and liabilities acquired
The following table summarises the recognised amounts of assets acquired, and liabilities assumed at the date of acquisition.
GBP
Fair value
============================== =============
Property, plant and
equipment 32,820,006
-------------------------------- -------------
Residential properties 2,401,073
-------------------------------- -------------
Deferred tax asset 3,058,677
-------------------------------- -------------
Inventories 12,480,971
-------------------------------- -------------
Trade and other receivables 7,241,259
-------------------------------- -------------
Restricted investment 3,770,005
-------------------------------- -------------
Income tax receivable
/ payable (708,116)
-------------------------------- -------------
Cash and cash equivalents 4,749,656
-------------------------------- -------------
Deferred tax liability (533,009)
-------------------------------- -------------
Deferred consideration
/ earn-out (3,739,716)
-------------------------------- -------------
Post-retirement medical
liability (2,023,090)
-------------------------------- -------------
Environmental rehabilitation
liability (4,847,521)
-------------------------------- -------------
Trade and other payables (11,967,302)
-------------------------------- -------------
Provisions (2,523,456)
================================ =============
Total identifiable
net assets acquired 40,179,437
================================ =============
I. Measurement of fair values
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
Assets acquired Valuation technique
================ =====================================
Property, plant The fair value of Property,
and equipment Plant and Equipment has been
calculated based on the fair
value of total consideration
paid in an arm's length transaction
between knowledgeable market
participants.
================ =====================================
C. Accounting for the step acquisition
The step acquisition has been accounted for as follows:
The fair value of associates was re-measured on date of acquisition as GBP10,419,517, with no gain or loss arising from this re-measurement.
Goodwill was calculated as follows:
GBP
=============================== =============
Fair value of consideration 12,729,846
-------------------------------- -------------
Fair value of non-controlling
interests 17,030,074
-------------------------------- -------------
Fair value of previously
held investment 10,419,517
-------------------------------- -------------
Fair value of net assets
acquired (40,179,437)
-------------------------------- -------------
Goodwill / (gain on -
bargain purchase)
-------------------------------- -------------
D. Other information
Since acquisition, the Vametco group has contributed GBP2.2 million of revenue and GBP637,680 of profit. Had the acquisition taken place at the start of the period, the Vametco group would have contributed approximately ZAR 877m (GBP52m) of revenue and ZAR 146m (GBP9m) of profit before tax from the Vametco operations, based on 10 months pro-rating of the audited results of Bushveld Vametco Holdings for the period.
33. Related party transactions
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 Investments is a related party due to two of the Executive Directors (Fortune Mojapelo and Anthony Viljoen) of Bushveld Minerals Limited being majority shareholders of VM Investments. At the year end, the group owed VM Investments Ltd GBPnil (2017: GBP39,712).
The remuneration of the directors, who are the key management personnel of the group, is set out below. Further information about the remuneration of individual directors is provided in the Directors' remuneration report.
10 months 12 months
ended ended
31 December 28 February
2017 2017
GBP GBP
Fees for services
as directors 48,750 65,000
Short-term employee
benefits 249,167 346,466
-------------
297,917 411,466
============= =============
Included within the above figure of short-term employee benefits is an amount of GBP75,000 (February 2017: GBP240,224) which has been capitalised as part of intangible exploration expenditure.
34. Post balance sheet events
Settlement of convertible bonds
Since year-end the outstanding convertible bonds balance was reduced by the following conversions:
-- GBP250,000 of convertible bonds converted into 3,078,817 ordinary shares of 1 pence each of the Company at a conversion price of 8.12 pence each on 18 January 2018. Following the exercise, Atlas held a total of GBP6,700,000 Convertible Bonds;
-- GBP700,000 of convertible bonds converted into 8,620,689 ordinary shares of 1 pence each of the Company at a conversion price of 8.12 pence each on 23 January 2018. Following the exercise, Atlas held a total of GBP6,000,000 Convertible Bonds;
-- GBP1,000,000 of convertible bonds converted into 11,990,407 ordinary shares of 1 pence each of the Company at a conversion price of 8.34 pence each on 19 February 2018. Following the exercise, Atlas held a total of GBP5,000,000 Convertible Bonds;
-- GBP725,000 of convertible bonds converted into 8,809,234 ordinary shares of 1 pence each of the Company at a conversion price of 8.23 pence each 14 March 2018. Following this exercise, Atlas held a total of GBP4,275,000 Convertible Bonds.
On 14 June 2018, Bushveld fully redeemed the issued Convertible Bonds. The Convertible Bonds were settled in full for a final aggregate cash payment of GBP5.116 million, including interest and early redemption charges.
Equity placing
On 26 March 2018, the Company raised approximately US$22.2 million (GBP15.7 million) (before expenses) by way of an oversubscribed placing of 152,749,172 new ordinary shares of 1 penny each at a price of 10.3 pence per share with leading institutional and mining investors (the "Placing"). The price was calculated as the 5 day volume weighted average price (as published by Bloomberg) at close of trading Monday 19 March 2018. The Placing shares represented approximately 14.4% of the Company's issued share capital on admission.
The planned use of the net proceeds of the Placing, being approximately US$20.9 million (GBP14.9 million), was to:
-- Redeem the outstanding Atlas Capital Convertible Bond (US$6.3m) (GBP4.5 million);
-- Simplify Bushveld's organisational and corporate structure to improve Bushveld's exposure to the underlying cash flows of its assets (US$9.0m) (GBP6.4 million); and
-- Support Bushveld's vanadium expansion programme: Expansion of the vanadium reserves and resources at the Vametco mine and Brits Project for future production and support Vametco's expansion plans to increase production to more than 5,000mtV and beyond (US$5.6m) (GBP4.0 million).
AfriTin demerger
Following the de-merger of Greenhills Resources Limited, Bushveld Minerals retained a 17.48 per cent shareholding in AIM-listed AfriTin Mining Limited from the 17(th) of November 2017. Post-year end, on the 20(th) of June 2018, AfriTin successfully completed a private placement of new ordinary shares, with the result that Bushveld Minerals was diluted from 17.48 per cent to 10.04 per cent. As Bushveld Minerals does not exercise significant influence over AfriTin, the investment has since been accounted for as a financial asset available for sale.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR KMGZVKLRGRZG
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June 29, 2018 02:01 ET (06:01 GMT)
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