Bushveld lives to mine another day after bail out

ENBATTLED vanadium producer Bushveld Minerals has survived to fight another day thanks to negotiating a revised financing deal with major supporter the OMF Fund 111 (Orion).

But the company is far from out of the woods as it faces a critical working capital and debt situation having lost $106m in the year to end-December at which date it had just $1.3m in cash and total borrowings of $98.6m.

Asked by an investor on a conference call on Tuesday what Bushveld’s chances of survival were until the end of 2024 CEO Craig Coltman replied: “You would have seen in the accounts that we passed the going concern test to the end of June 2025 and that has been signed off by the auditors.

“But that’s if our assumptions pan out including that we meet production levels as planned and that the vanadium price does not drop any further.”

In reply to a follow-up question on whether Bushveld could become a profitable business if the vanadium price remained at current dollar levels Coltman replied: “No. We cannot have a sustainable business at the current price.

“It’s not the EBITDA (earnings before interest, tax, depreciation and amortisation) that is going to keep you going because you need sustainable capital expenditure in the order of four to five million dollars. And that’s normalised capital. We will probably do double that this year because we are playing catch up.”

Coltart said he expected vanadium prices to start increasing within 12 months, commenting: “It’s a matter of when rather than if. Estimates we have indicate prices could start moving up from quarter four this year or quarter one next year.”

Earlier this year Bushveld faced a looming loan repayment of $7m due to Orion by end-June. While it had agreed the sale of 50% of its Vanchem plant and 64% of its Mokopane Vanadium project to Southern Point Resources (SPR) for $25m, SPR still stalled in making some of the agreed payments. The $10m balance on those payments is now due end-July.

Orion has agreed to defer the first repayment on the term loan from end-June to end-December 2025 and also agreed to invest up to $10m in cash.


Coltman said what kept him awake at night was a combination of external and internal factors.

The external factors were the low dollar vanadium price and the possibility that the rand could strengthen “notably” following the creation of the Government of National Unity.

Internal risks included the long outstanding creditors balance and the group’s damaged relationships with its important suppliers which had stopped dealing with Bushveld because of non-payment.

“We need to convince our preferred suppliers to be our suppliers of choice after we have let them down so many times. It’s critical to have our preferred suppliers back in favour with us to improve our asset reliability and our planned maintenance programme.

“When you don’t pay your suppliers they don’t want to come and service you. It’s as simple as that.

“We are long overdue to place an order for large components such as heat exchangers.  There is a six month lead time but because of our poor track record with creditors they want 80% of it up-front. That’s a million dollars.”

Asked why Bushveld management should trust SPR given the prior delays in payments which had damaged investor sentiment Coltman replied: “Fair comment.  I have never seen anything like this in my life and I have done a lot of these deals.

“But it is what it is.

“I have read them the Riot Act and, if we see a repeat of SPR’s behaviour, we are not going to tolerate it. We are in a much better position than we were early on in January when we were only reliant on SPR money. Now we are also reliant on Orion which has demonstrated incredible support for this organisation.”