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LONDON (Alliance News) - Bushveld Minerals Ltd on Wednesday reported data from the 2018 drilling campaign at the Vametco vanadium mine in South Africa.
Bushveld has a 74% interest in Bushveld Vametco Alloys Pty Ltd - a primary vanadium mining and processing company - the Mokopane vanadium project, and the Brits vanadium project.
The AIM-listed vanadium producer said the campaign comprised of 13 drillholes over a total of 1,506 meters of diamond drilling. Ore reserves have more than doubled to 279,100 tonnes, with the grade increasing by 3%. Indicated resources, meanwhile, have almost tripled to 965,900 tonnes.
Bushveld said the 31% increase in the 2019 mineral resource over the 2017 estimate is primarily attributed to reporting the mineral resource to a maximum depth of 150 meters below surface, versus 120 meters in 2017.
"Following a significant amount of exploration work, including drilling to greater depths, as well as a reinterpretation of the geological model to include the cut-off grade of the magnetite, we have been able to report a significant increase in ore reserves and grade from the 2017 estimate," said Chief Executive Fortune Mojapelo.
Separately, Bushveld said it has agreed to provide a short-term standby working capital support facility to AfriTin Mining Ltd to the sum of ZAR30.0 million, about GBP1.7 million.
Bushveld currently holds 9.5% of AfriTin.
The 12-months facility is meant to fund AfriTin's working capital requirements leading to expected tin mine commissioning this year, and subsequent longer-term refinancing.
Interest on this facility accrues at a rate of 12.5% per annum, payable quarterly, on drawn amounts, Bushveld said, and a facility fee equal to 1.0% of the facility amount. The drawn amounts are repayable at any time during the 12 months term at no additional cost to AfriTin.
"The funding support provided gives AfriTin the needed time to finalise its own longer-term debt financing on the back of anticipated tin production at Uis project later this year. The support provided therefore enables Bushveld Minerals to secure value in its remaining shareholding in the company and thereby facilitate for the eventual final exit from the tin business by the end of the facility term," explained Mojapelo.
Simultaneously on Wednesday, AfriTin announced it has raised GBP3 million via 99.6 million shares subscription at a price of 3 pence each. The fundraising price represents a discount of 9% to the closing price on Friday last week.
AfriTin shares were trading 6.1% lower on Wednesday at 3.10p each, while Bushveld shares were trading 3.5% higher at 29.75p each.