Beaufort Securities view on Bushveld Minerals: The details from the PFS bode well for Bushveld Minerals, which has a diverse portfolio of vanadium and titanium-bearing iron ore, tin and coal assets in Southern Africa. The overall project resource is 298Mt, which represents a significant exploration upside. Although the commodity market’s prospects do not look very promising, a significant proportion of the current global vanadium production is unsustainable at current prices. There has been significant reduction in vanadium supply over the past six months and, therefore, we expect a sustainable price recovery in the medium to long term. This would bolster the company’s prospects. A likely rebound in vanadium prices provides strong upside potential; therefore, we assign a Speculative Buy rating on the stock.
Yesterday, Bushveld Minerals provided an update on the pre-feasibility study (PFS) at its 64%-owned Mokopane Vanadium Project in South Africa. The asset has an ore reserve of 28.56 million tonnes (Mt), which is likely to support a 30-year life of mine (LoM). In addition, the PFS contemplates a 1.0 Mtpa run of mine (RoM) operation producing on average 9,525 tonnes per annum (tpa) of vanadium pentoxide (V2O5) flakes at 99.5 weighted percent purity. Further, the investment in the project has a payback period of four years with a pre-tax NPV of US$418.0m. Base case scenario involves an integrated mining-concentrator salt roast process business case for a modest capital expenditure of US$298.1m to produce the 9,525 tpa V2O5.
