Bushveld Minerals CEO on financing agreement with Orion, COVID-19 impact
South Africa’s largest supplier of vanadium, Bushveld Minerals, has reported a $10.7 million loss before tax, for the six months ended June. This is due to revenue lost from COVID-19, as a result of lower vanadium prices and lost production. The company that is listed on the London Stock Exchange, is still to be listed on the Johannesburg Exchange. Joining CNBC Africa to review the results and its new Production Financing Agreement is Fortune Mojapelo, CEO of Bushveld Minerals.
Wed, 30 Sep 2020 15:26:02 GMT
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AI Generated Summary
- Bushveld Minerals reports a $10.7 million loss before tax for the first half of 2020, attributed to COVID-19 impact and lower vanadium prices.
- The company remains optimistic about the future outlook for vanadium prices and strong demand drivers in the steel and energy storage sectors.
- New financing agreements, including a $30 million production financing agreement and a $35 million convertible loan package, offer flexibility and growth opportunities for Bushveld Minerals.
Bushveld Minerals, South Africa's largest supplier of vanadium, has faced significant challenges in the first six months of 2020 due to the impact of the COVID-19 pandemic. The company reported a $10.7 million loss before tax, primarily attributed to lower vanadium prices and lost production. Fortune Mojapelo, CEO of Bushveld Minerals, highlighted the difficulties faced during this period, mentioning a lost revenue opportunity of about $9 million and increased costs associated with managing the impact of the pandemic. Despite these challenges, Mojapelo expressed gratitude for the company's strong position, low-cost production base, and adequate funding to weather the storm. The company generated an EBITDA loss of $1 million and an operating loss of $9 million for the period, but Mojapelo remains optimistic about the future outlook for the energy and commodities sector. Bushveld Minerals is focusing on the positive outlook for vanadium prices and the strong demand drivers in both the steel and energy storage sectors. The company believes it is well-positioned to capitalize on these trends with its two operations and the new financing agreements it has secured. The recent production financing agreement of $30 million will support the growth of production capacity at Vometco, while also enabling the repayment of existing debts. Additionally, a convertible loan package of up to $35 million, anchored by Orion Mine Finance, offers further flexibility for the company's financing strategy. Mojapelo emphasized the attractiveness of these instruments for a company at Bushveld Minerals' stage of growth. Investors can expect to see the company listed on the Johannesburg Stock Exchange, pending completion of the acquisition of Vanchem and a reassessment of the listing process. The CEO expressed intentions to update the market on the progress of the JSE listing in due course.