Bushveld Minerals Ltd on Friday said it has suspended guidance for the rest of this year, as a result of its ongoing liquidity issues.
The vanadium producer operating the Vametco processing facility in South Africa said production for the third quarter that ended September 30 was 855 metric tonnes of vanadium, down 16% from 1,000 mtV the year before.
Sales for the three-month period grew 1.2% to 859 mtV from 849 mtV last year.
Shares in Bushveld Minerals were down 17% at 0.39 pence each in London on Friday morning.
Production for the nine months that ended September 30 was 2,546 mtV, down 8.9% from 2,784 mtV last year, whilst sales for the nine-month period have fallen 17% to 2,492 mtV from 2,945 mtV.
Bushveld said it has begun work on ‘cost-cutting initiatives and development works to return the company to profitability and secure Bushveld’s long-term future, with the potential to achieve annualised savings of $8 million to $10 million by the end of 2025.’
Having previously forecast full-year group production between 3,800 and 4,000 mtV, which represented a year-on-year reduction of 400 mtV, Bushveld Minerals in October said it found itself ‘in a position whereby it is unable to continue operating at current production levels’. It began a controlled slowdown of production at its Vametco facility.
The company said it has suspended guidance for the remainder of 2024 as a result of its current working capital conditions.
Chief Executive Officer Craig Coltman said: ‘While the third quarter reflects lower volumes and a challenging quarter overall, our commitment to operational efficiency and long-term sustainability remains our key focus. Bushveld has taken difficult, but necessary, steps this quarter to stabilise our financial position, including a reduction of the current labour complement at both Vametco and head office, and a controlled slowdown of Vametco due to current liquidity issues.
‘We also achieved meaningful progress in rationalising our asset base during this period. We completed the disposal of Lemur and we completed on the sale of Vanchem, allowing us to focus on Vametco as the Company’s core producing vanadium asset. Due to the Company’s cash position currently not being sufficient to fully sustain our operations or meet immediate liabilities, we are actively engaging with various stakeholders to explore various options to address our immediate liquidity position.
‘Until we are able to address our liquidity challenges, we will continue with a controlled slowdown of production. We will provide further updates in due course.’
The length of the production slowdown will be determined by when the company receives further funding through the proceeds of the Vanchem sale.
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