Bushveld Minerals acquisition of Bushveld Vametco Limited. December 2017

Transcription

1 Bushveld Minerals acquisitin f Bushveld Vametc Limited December 2017

2 Disclaimer 2 These presentatin slides and any ther material prvided with these slides (the Presentatin Materials ) d nt cmprise an admissin dcument, listing particulars r a prspectus relating t Bushveld Minerals Limited (the Cmpany ) r any subsidiary f the Cmpany, d nt cnstitute an ffer r invitatin t purchase r subscribe fr any securities f the Cmpany and shuld nt be relied n in cnnectin with a decisin t purchase r subscribe fr any such securities. The Presentatin Materials and the accmpanying verbal presentatin d nt cnstitute a recmmendatin regarding any decisin t sell r purchase securities in the Cmpany. The Presentatin Materials and the accmpanying verbal presentatin are cnfidential and the Presentatin Materials are being supplied t yu slely fr yur infrmatin and may nt be reprduced r distributed t any ther persn r published, in whle r in part, fr any purpse. 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The securities cntemplated in these slides (the Securities ) have nt been, and will nt be, registered under the United States Securities Act f 1933, as amended (the US Securities Act ) r with any securities regulatry authrity f any state r ther jurisdictin f the United States and may nt be ffered r sld within the United States r t, r fr the accunt r benefit f, any US Persn as that term is defined in Regulatin S under the US Securities Act except pursuant t an exemptin frm r in a transactin nt subject t the registratin requirements f the applicable securities legislatin. The Cmpany has nt been registered and will nt register under the United States Investment Cmpany Act f 1940, as amended. The Presentatin Materials and its cntents are cnfidential and shuld nt unless therwise agreed in writing by the Cmpany be cpied, distributed, published r reprduced (in whle r in part) r disclsed by recipients t any ther persn.

3 Cmpany Overview 3 An integrated vanadium platfrm with investments in cal-pwer and tin HOLDINGS TIN Develping a significant stand-alne pan-african prtfli f mineable tin assets VANADIUM Develping a significant, vertically integrated vanadium platfrm COAL & POWER Develping an integrated thermal cal and IPP asset in Madagascar

4 Bushveld Minerals Limited Market Capitalisatin 4 BMN Share Price (30 Nvember 2017) +21% 9.37p Basic Ordinary Shares 808,612, Week Hi-L p Market Capitalisatin 75,767,028 Warrants in issue 29,101, Mnths Share Price Perfrmance 800% 700% 600% AIM:BMN 659% Surce: Market prices stated as at 30 Nvember 2017 (Lndn Stck Exchange) Bushveld Minerals Leading Sharehlders 500% 400% 1 Hargreaves Lansdwn AM 126,621,576 2 Acacia Resurces Ltd 87,698,644 3 Halifax Share Dealing 83,286,385 4 TD Direct INvesting 58,493,261 5 Jse Ry Hernandez Brrme 37,969,130 6 Barclays Wealth and Investment Mgt. 34,219,142 7 Nichlas Jhn Mallett 31,500,000 8 Selftrade Tals Securities 30,993,642 9 Interactive Investr Sharehlding 27,932, AJ Bell Securities 25,287,035 Surce: Capita Registrars. As at 31 August % 200% 100% 175% 125% 0% Nv - 16 Jan - 17 Mar - 17 May - 17 Jul - 17 Sep - 17 Nv - 17 Bushveld Minerals FTSE AIM All-Share Index FeV 70-80% V Eurpean price, $/kg V Surce: Blmberg, 24 Nvember 2017

5 Bushveld Minerals Experienced Leadership Team 5 Frtune Mjapel Chief Executive Officer Bushveld Minerals Geff Sprule Chief Financial Officer Bushveld Minerals Malclm Currr Chief Executive Officer Vametc Operatins Kate Bredin Head f Cmpliance Bushveld Minerals Mikhail Nikmarv Chief Executive Officer Bushveld Energy Prince Nyati Chief Executive Officer Lemur Hldings

6 The Acquisitin 6 On 30 Nvember 2017 Bushveld Minerals annunced the cnditinal acquisitin f the 55% sharehlding f Yellw Dragn Hldings Limited in Bushveld Vametc Limited Bushveld Vametc Limited is 78.8% wner f Strategic Minerals Crpratin. Strategic Minerals Crpratin, in turn hlds 75% interest in Vametc Hldings Limited, equivalent t an indirect beneficial interest t 59.1% in the underlying business, Vametc Allys Limited; Fllwing the cmpletin f the acquisitin Bushveld Minerals will wn 100% f Bushveld Vametc Limited. The Acquisitin cnstitutes a reverse takever under the AIM Rules and is therefre subject t sharehlder apprval and re-admissin f the Enlarged Grup t trading n AIM 1. The acquisitin cnsideratin is US$11.1 millin which is structured as fllws: Cmprising cash payable under the purchase agreement f US4.5 millin; The issue f 54,766,364 new rdinary shares in Bushveld Minerals at a price f 9.06p; Fllwing cmpletin f the Acquisitin, Yellw Dragn s ttal sharehlding in Bushveld Minerals will be 9.24% (r 79,766,364 shares) f the Enlarged issued capital 2 ; A deferred cnsideratin, in tw tranches, f US$0.6 millin each fr the years ending 31 December 2018 and 31 December A further payment t be made n publicatin f the Vametc Hldings Limited accunts fr the year ended 31 December 2020 t be calculated by reference t the EBITDA f Vametc Hldings Limited fr the perid cvered by its 2020 accunts. 1. Bushveld Minerals will be seeking Sharehlder apprval fr the acquisitin at the General Meeting n 20 December Includes existing Yellw Dragn sharehlding in Bushveld Minerals Limited

7 Acquisitin Ratinale The Acquisitin will increase Bushveld Minerals effective equity interest in Vametc Hldings frm 26.6% t a cntrlling 59.1% Vametc has t date illustrated its strng cash generatin capacity and, with the expansin initiatives underway, the drive tward a lwer cst base which, in a rising vanadium price envirnment, ensures the transactin is accretive t ur sharehlders. The key benefits f the accretive transactin t the Cmpany and its sharehlders include the fllwing: Ownership f a majrity sharehlding in a high grade, lw-cst, pen-cast and simple mining prpsitin; Acquisitin f cre asset fr cnsiderably less than its replacement cst; Cntrl f ne f the largest primary vanadium resurces in the wrld; Existing glbal vanadium market share f apprximately 3.5%; Near-term brwn field grwth that will raise capacity at Vametc, within three years, t ver 5,000 MTV per annum; Increased expsure t vanadium, which has attractive fundamentals: rbust demand and n significant new supply anticipated; Ptential t diversify the prduct range beynd Nitrvan prduct; Experienced management team with strng track recrd. Bushveld Minerals CEO 7

8 Vametc Overview Vametc enjys a significant share f the glbal vanadium market f apprximately 3.5% with expansin plans already underway Lcatin f Vametc peratin within the Bushveld Cmplex (Suth Africa) 1 1 Mkpane Vanadium Lcated in Suth Africa s Bushveld Cmplex, hst t the wrld s largest high grade primary vanadium resurces. Open-pit mine alng 3.5km strike with in-magnetite V grades f ver 2% V2O5, amng the highest in the wrld Mt, 26.79% magnetite, 1.96% V2O5 reserve and Mt resurce, 29.44% magnetite, 1.96% V2O5. Utilises well-established salt rast prcessing methd t prduce refined vanadium in the frm f NitrvanTM and mdified vanadium xide (MVO). Three-phase capacity expansin underway: 2 Vametc Brits Vanadium 3 3 Phase I cmpleted in Q3CY17, raising prductin capacity t 3,035 MTV; Phase II will take capacity t 3,750 MTV fr capex f US$3.0 millin; Phase III t increase capacity t 5,000MTV within 3 years. Emplys 340 permanent emplyees. Established leadership with a cllective experience in vanadium in excess f 100 years. 8

9 Vertical Integratin Illustrated 9 Integrated mdel designed t address the tw key risks f vanadium redx flws batteries (VRFB ) adptin (cst and security f supply) while maximising share f the vanadium value chain in VRFBs 430 MT pen-cast primary resurce base (incl. 66Mt reserves) One f the wrld s largest primary vanadium resurce base Tier-1 vanadium grades (>2% V 2 O 5 in magnetite) Electrlyte manufacturing Scpe t c-lcate in Vametc prcess => significantly lwering csts Lcal VRFB Assembly & manufacturing MW scale energy strage prject develpment Deplyment mdels include PPAs, leasing mdels Easy access t existing infrastructure ~US$3 Bn market Ptential >US$70 Billin addressable market fr VRFBs Surce: BCG, Citi, Rskill, TTP Squared, Bushveld analysis

10 Vametc Mine & Plant Operatins 10 Open pit mine shwing mining benches running west-east Crushing circuit cmprising primary, secndary and tertiary crushers Rasting kiln & leaching, precipitatin & AMV circuit Final prduct Nitrvan TM a trademark nitrided vanadium

11 Vametc s Leadership Team 11 Bushveld Vametc s senir management team has ver 100 years f vanadium mining and prcessing experience in Suth Africa Malclm Currr Chief Executive Officer Lyndn Williams Chief Operatins Officer Tanya Mstert Chief Financial Officer William Steinberg Wrks Manager

12 Psitive Key Perfrmance Drivers 12 Prductin capacity Prductin vlume increase thrugh phased expansin plan: Phase I: 3,035 MTV prductin capacity reached in September 2017; Phase II: 3,750 MTV t be reached June 2018 ; Phase III: Over 5,000 MTV t be reached 2019; Vanadium Price Expansin prject t grw Vametc s share f glbal market frm 3.5% t ver 5%. Strng perfrmance in 2017 with YTD increase f circa 54% 1 : Cst FeV price trading at prices in excess f US$40/kgV at the end f Nvember Reduced by 15% in CY16, further reductins planned via prductivity initiatives 1. Published prices frm Metal Bulletin Bushveld Vametc results H1 CY17 CY16 CY15 Vanadium prduced (MTV) 1,441 2,804 2,419 Vanadium sld (MTV) 1,341 2,810 2,340 USD/ZAR exchange $=ZAR Revenue ZAR'm EBITDA ZAR'm Prductin csts US$/kg V Bushveld Vametc s Glbal Custmer Base (CY16 Sales) 6% 9% 7% China 7% 21% 50% Republic f Suth Africa Americas Eurpe Asia RW

13 Vanadium Market Overview 13

14 Vanadium Characteristics & Uses 14 Vanadium is a grey, sft and ductile high value metal with several unique characteristics that psitins it strngly in the steel, allys and chemicals sectrs Steel The steel industry accunts fr >90% f ttal V cnsumptin (ttal ~80,000 MTV, 2016) High strength-t-weight characteristics Crrsin resistance Weldability Fabricability Cnstructin steel - rebar Allys fr aerspace industry Chemicals Vanadium electrlyte: c.2% f glbal cnsumptin in 2016; Prjectin: ver 20% by 2030 Ability t exist in fur different xidatin states Water-sluble Lng duratin utility scale vanadium redx flw batteries Surce: TTP Squared, Bushveld analysis

15 Jan'12 Mar'12 May'12 Jul'12 Sep'12 Nv'12 Jan'13 Mar'13 May'13 Jul'13 Sep'13 Nv'13 Jan'14 Mar'14 May'14 Jul'14 Sep'14 Nv'14 Jan'15 Mar'15 May'15 Jul'15 Sep'15 Nv'15 Jan'16 Mar'16 May'16 July'16 Sep'16 Nv'16 Jan'17 Mar'17 May'17 Jul'17 Sept'17 Nv'17 Why Vanadium? 15 Vanadium market fundamentals are cmpelling FeV histrical mid-price US$/kgV Rbust and grwing demand frm steel sectr with significant upside frm energy strage applicatin uses + Cnstrained supply, with shrt term reductins and limited new supply prspects 10 0 A sustained structural market deficit, with significant price upside Surce: Metal Bulletin

16 Rbust Vanadium Demand Drivers Vanadium redx flws batteries (VRFBs) estimated t cntribute up t 20% f vanadium cnsumptin by 2030 Rbust steel sectr demand drivers with substantial energy strage upside Vanadium demand is underwritten by the steel industry, being Vanadium s unique characteristics psitins it well fr large respnsible fr circa 90% as an additive t strengthen varius grades f steel. China is the largest market fr vanadium. The cuntry s market share is anticipated t rise due t a revisin f the tensile strength f steel rebar prducts, used in the cnstructin industry, annunced in August The China Irn & Steel Research Institute (CSIRO) estimates the abve culd lead t an increase in Chinese vanadium demand f ver 30% r 10,000 tpa. Grwth is als frecast in the nn-allys and chemicals industries, which respectively enjy ay 4.5% and 3.5% share f usage. scale, lng duratin energy strage using VRFBs. VRFB technlgy is already in cmmercial prductin with large (MW) scale deplyments glbally; in 2015 and 2017 VRFBs were the largest deplyed batteries. China s new Natinal Develpment Plan s (Dcument #1701) fcus includes 100MW-grade, vanadium redx flw battery energy strage statins. Impact n vanadium demand significant as vanadium cmprises 30-40% f cst f VRFB systems. Cmmercialisatin f Energy in Eurpe, EC reprt: There will be ecnmic ptential fr very large amunts (abut 400 GW) f strage in the EU. 16

17 Cnstrained Vanadium Supply 17 Vanadium c-prductin supply facing significant prductin cnstraints with material cntributins already faltering Vanadium Prductin 2016 by Raw Material Type Ttal 76,000 MTV 1 High input csts Lw Fe grade <30% depsits, require cncentrating t ~60% Fe Higher input csts than steel plants prcessing haematite res Three respnse ptins Switch t haematite res t blend and upgrade magnetite feed (e.g. Chengde) 17% 10% 2 High perating csts Cmplex steel plant design Inferir Fe grade Additinal prcessing steps t remve Ti and V Curtail reduce prductin (e.g. Panzhihua) Stp prductin (e.g. Highveld) 73% Cprduct Steel Slag Primary V re Secndary 3 N leverage n steel prices Such plants make up small share f steel prductin t small t influence steel prices Imprved margins frm cheaper seabrne irn re nt available >15% reductin in V supply between 2015 and 2016 Surce: TTP Squared, Bushveld analysis

18 The VRFB Opprtunity VRFBs have several unique features that make them ideal fr utility scale, statinary energy strage applicatins: 1. Lng lifespan cycles - able t charge and discharge repeatedly (>35,000 times) giving it an extended (>20 years) lifespan % depth f discharge withut perfrmance degradatin is unique 3. Scalable capacity t stre large quantities f energy (MWrange) 4. Very fast respnse time (<70ms) 5. N crss-cntaminatin - nly ne battery element, unique amng flw batteries % f vanadium is re-usable upn decmmissining f the system Applicatins f VRFBs 1. Driving grid efficiency peratinal and capital expenditure Peak shaving Regulating lad frequency Balancing PV and wind intermittency Reducing capex fr and lsses in transmissin and distributin 2. Driving grid independence 7. Safe String electricity frm slar PV fr use at night 8. Flexibility allws capture f the multi-stacked value f energy strage in grid applicatins Lwering system csts fr micr grids and islands On a LCOE1 basis VRFBs are tday cheaper than Li-in batteries LCOE: Lcalised cst f energy VRFBs are ideally suited fr large scale, lng duratin energy strage applicatins 18

19 Appendix 19

20 Vametc Mineral Resurces and Ore Reserves 20 Vametc Mineral Resurces (100% basis) Vametc Mineral Reserves (100% basis) Categry Tnnes (millins) Magnetite % V 2 O 5 % cntained in magnetite Cntained Metal Ttal V 2 O 5 (tnnes) Categry Tnnes (millins) Magnetite % V 2 O 5 % cntained in magnetite Cntained Metal Ttal V (tnnes) Upper Seam Lwer Seam Inferred ,947 Intermediate Seam Inferred ,994 Lwer Seam Prbable ,152 Ttal ,152 Indicated ,604 Inferred ,620 Sub-Ttal Indicated Sub Ttal Inferred Ttal Inferred + Indicated , , ,165 Nte Bushveld Minerals see-thrugh interest is 59.1%

21 Vanadium Platfrm Organisatinal Structure 21 Bushveld Minerals Limited 100% Bushveld Resurces Guernsey 100% SOJITZ Crp. 21.2% JP Bushveld Vametc Limited Guernsey 78.8% Strategic Minerals Crpratin US 75% Lcal Partners ZA 25% Vametc Hldings (Pty) Ltd ZA Vametc Allys (Pty) Ltd ZA Bushveld Minerals will be seeking Sharehlder apprval fr the acquisitin at the General Meeting n 20 December 2017 in Guernsey 100%

22 Lemur Hldings 22 1 f 3 main cal plays in Madagascar 136 Mt thermal cal resurce (indicated & measured JORC) Scping study cmpleted in 2014 Single stage washing generates a primary prduct with calrific value f 25.6MJ / kg and ash% f 16.5% Executed a binding PPA with Madagascar state-wned utility, JIRAMA, as part f the Imalt Pwer Prject in Madagascar Strategy t secure IPP licence fr integrated mine-t-pwer generatin play Pwer t supply twn f Tulea and reginal mines under develpment MU with Madagascar gvernment s state-wned electricity cmpany t build, wn and perate a 45MW cal fired pwer statin within 10km f mine HOLDINGS COAL & POWER Develping an integrated thermal cal mining and IPP asset in Madagascar MU with PwerChina fr develpment f upgraded 60MW pwer prject BFS fr pwer prject underway

23 AfriTin Mining Limited (AIM:ATM) 23 AfriTin frmed via demerger frm Bushveld Minerals (AIM: BMN) t take advantage f the current glbal tin deficit and rising cnsumer demand TIN Develping a significant standalne pan-african prtfli f mineable tin assets Listed n AIM Pst 09 Nvember 2017 listing, Bushveld hlds a sharehlding f apprximately 17.48% in AfriTin Mining Visin f AfriTin is t create a prtfli f wrld-class, cnflict-free, tin prducing assets and becme the first pure tin cmpany listed in Lndn Flagship asset is the Uis brwnfield tin mine in Namibia, frmerly the wrld s largest hard-rck tin mine Brwnfield prtfli in Suth Africa, cmprising pen-cast, granite-hsted tin depsits

24 Crprate Infrmatin 24 Registered Office Le Pllet St Peters Prt Guernsey Nminated Adviser & Brker: SP Angel Prince Frederick Huse, Maddx Street, Lndn W1S 2PP Legal Cunsel - UK 4 Mre Lndn Riverside Lndn, SE1 2AU United Kingdm Independent Auditr RSM UK Audit LLP 25 Farringdn Street Lndn, EC4A 4AB United Kingdm Principal Operating Address 2 nd Flr, Building 3 Illv Edge Office Park 9 Harries Rad, Illv Jhannesburg, 2116 Suth Africa Tel: