(Alliance News) - Bushveld Minerals Ltd on Monday reported a surge in annual sales despite production falling, but said it has suspended full-year guidance until it receives funds from Southern Point Resources Ltd.
Shares in Bushveld fell 11% to 1.27 pence each in London on Monday morning.
The integrated primary vanadium producer said production in the three months to December 31 fell 7.5% to 925 metric tonnes of vanadium from 1,000 mt in the previous quarter. Meanwhile, sales in the fourth quarter of 2023 rose 30% to 1,106 mt from 849 in the third quarter.
Full-year production fell 3.3% to 3,714 mt, from 3,842 in 2022, in line with guidance. Sales in 2023 rose 13% to 4,051 mt from 3,584 the previous year due to increased sales out of inventory, Bushveld said.
Looking ahead, Bushveld reported that its guidance has been suspended pending receipt of funds from Southern Point Resources. It added that its January 2024 production of 267 mt has been affected by its current constrained cash position.
Earlier last month, Bushveld confirmed receipt of a ZAR40 million payment, approximately USD2 million, from Southern Point Resources of the USD12.5 million due as part of Bushveld's USD18.4 million equity capital raising. Southern Point remains in default of the agreement until Bushveld receives the entire USD12.5 million.
Southern Point previously claimed the late transfer was caused by processing delays, but more recently said the delay was due to an institutional funding partner defaulting on its agreement to provide funds.
Southern Point said it will provide the funds no later than February 28. Bushveld has already estimated that approximately two weeks' production will be lost in January due to settlement delays.
Chief Executive Officer Craig Coltman said: "I am pleased that we have met 2023 production guidance and I would like to commend our workforce for achieving the level of operational performance in H2 2023 given cash flow challenges faced.
"We are pleased to have announced the completion of the Orion convertible debt restructuring announced on [February 1] and had hoped to have put our financial difficulties behind us, and so it is therefore disappointing that we have to suspend 2024 production guidance given the funding shortfall reported in recent announcements. Once the additional funding is received, we hope to stabilise production at both assets and achieve a more consistent performance."
By Sabrina Penty, Alliance News reporter
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Bushveld Minerals (BMN)