Bushveld can’t make profit with current V prices, CEO saysON...

Bushveld can’t make profit with current V prices, CEO saysON JULY 5, 2024 BY ALICE AGOOSIf Bushveld Minerals’ CEO Craig Coltman was trying to reassure investors about the viability of the company, he failed miserably during a July 2 Q4 2023 earnings call.Asked whether Bushveld could be profitable if vanadium prices remain at or about the current dollar level, Coltman said: “The answer is no, we don’t have a sustainable business at the current price per kilogram.”For most people, this would be a big problem, but Coltman said that vanadium prices are expected to increase in the next 12 months. “We’ve heard from various reliable intel, it could be anything from Q4 this year to Q1 next year. It’s a matter of when rather than if.”The “reliable sources” were not cited.Provided Bushveld’s plan to sell 100% of its Vanchem vanadium operation in South Africa to Southern Point Resources (SPR) goes through, Bushveld’s primary asset will be the Vametco vanadium operation in South Africa. Bushveld’s goal is to achieve sustainable production of about 2,700 mtpy of V at Vametco. This might be a challenge given that Bushveld has rarely met its production targets for Vametco and the facility produced 2,306 mt in 2023 with unit costs of production at $25.50 per kg. Today’s FeV price is under $27 per kg.Bushveld hopes to cut costs and boost monthly output at Vametco to 240 mt by the fourth quarter. First-quarter production totaled 357 mt (or roughly 120 mtpm).Recalling that when he took office a year ago, Coltman said, Bushveld was saddled with long-term debt and owed creditors large sums of money resulting in a situation where many suppliers refused to do business with Bushveld.Bushveld needed a cash infusion, and along came SPR promising up to $75-million in funds. The only problem was that SPR failed to make its first payment of $12.5-million at the end of 2023 and kept missing further deadlines. Finally, SPR came up with $2-million in the form of an interest-free loan, not cash, in late January.For the next few months, Bushveld tried to obtain the rest of the money from SPR and had to reduce production to stay afloat. In March, Bushveld received the $12.5-million, but by April 21, its cash was depleted to $2.22-million and the company said it would have to shut Vanchem and Vametco if it did not receive further funding.In May, Bushveld agreed to sell 100% of Vanchem to SPR for $20.6-million plus a deferred consideration of $15- to $20-million. Originally Bushveld had agreed to sell 50% of Vanchem for $21.3-million.