Bushveld Minerals Regulatory News (BMN)

Bushveld Minerals Ltd

("Bushveld" or the "Group")

Introducing a new vanadium focused platform, Bushveld Vanadium

Bushveld Minerals, a diversified mineral development company with projects in Africa, is pleased to provide an update on its iron ore project with the announcement of a new platform based on its MML Deposit. The new platform, which is to be called Bushveld Vanadium, will focus on accelerating the development of a potentially world-class vanadium resource in the MML with the possibility of becoming one of the world's largest vanadium producers. The Board of Bushveld believes this merits its own development path given the potential world-class nature of the deposit.

Highlights

· Bushveld Vanadium will be a dedicated vanadium platform based on the Main Magnetite Layer (MML) Deposit

· Capacity to realize additional credit from its iron and titanium content

· Two additional zones of vanadium, combining up to 70 m thickness, have been discovered in recent months with scope to increase resource substantially

· Concentrates grade in excess of 2% V2O5, have been produced from the MML and the footwall mineralisation, making for some of the highest-known vanadium grades from a magnetite deposit

· Scoping study on the enlarged vanadium resource in Bushveld Vanadium to be completed in H1 2014. The Company will investigate the development of an operation capable of supporting production of between 5,000 and 10,000 tonnes per annum of vanadium products

· Simple and shallow ore body amenable to low-cost mining

Commenting on this development Fortune Mojapelo, CEO of Bushveld said,

I am delighted to present the Bushveld Vanadium project, which we look forward to developing alongside the equally exciting P-Q Deposit project. The vanadium potential of the MML has been known to us from inception and is the reason we have sought in our past project announcements, to distinguish between the P-Q Deposit and the MML Deposit even though the two deposits are about 2 km apart and run along parallel strikes. What has not been as clear before is the scale of the vanadium deposit, the vanadium proposition of the disseminated magnetite zones and thus the massive potential of the project. The thick outcropping zones will ensure that the mining operation is a low cost one with very low stripping ratios.

This should not come as a surprise, considering the deposit is located less than 10 km from the world's richest and largest open pit platinum mine, in arguably the most mineralized section of the Northern limb of the Bushveld Complex, itself host to 35% of the world's vanadium resources (a close second to China).

Moreover at ~US$17,500 / tonne of standard grade V2O5 and as much as US$35,000 / tonne of ferrovanadium, this is a high value commodity project which can deliver attractive economics for a modest scale of operation.

We are obviously excited at the potential of developing the Bushveld Vanadium project and through this initiative we can ensure that the project receives the required attention without detracting from the other projects in the Bushveld Group, which we remain excited about and committed to developing".

Background

The Bushveld Iron Ore project is based on the vanadiferous titanomagnetites of the Bushveld Complex where the Company has delineated a combined 770 Mt JORC-compliant resource in two adjacent deposits: the P-Q Zone Deposit (718 Mt) and MML Deposit (52 Mt)

The two deposits have been reported to be distinct from each other in respect of their chemical compositions, with the P-Q Zone Deposit showing high iron and titanium grades, while the MML Deposit shows high iron and vanadium grades as shown below.

This is significant in its impact on the product strategy and the processing routes adopted by the Project: the P-Q Zone Deposit is geared towards iron and titanium products while the MML Deposit is geared towards vanadium and iron products.

Initial focus on the project was on developing the P-Q Zone deposit and making the case for the combined economic credits from its iron and titanium, and to a lesser extent vanadium. The Company has previously released a Scoping Study in April 2013 based on the 718 Mt titanium-rich P-Q Zone Deposit, and is currently undertaking pre-feasibility studies on the P-Q Zone Deposit.

Bushveld Vanadium Project

The Bushveld Vanadium Project is based on the MML (Main Magnetite Layer) Deposit, which has a previously reported initial JORC-compliant 52 Mt Indicated resource in, with a top-tier vanadium grade (1.48% V2O5 in-situ).

Further work undertaken by the Company in recent months has identified two new mineralized zones in the hanging wall (termed the MML-HW) and foot wall (termed the AB Zone) of the MML. These zones comprise primarily disseminated vanadium-bearing magnetite, and when combined add up to 70m in thickness and provide a step-change in respect of the scale of the project. The zones are parallel to the MML, and dip similarly at 18˚ - 20˚ to the west. All of these zones occur at surface in the current prospecting area.

The Company has decided that these deposits are sufficiently robust to develop into a stand-alone vanadium project now called Bushveld Vanadium, and is proceeding with a Scoping study.

The development of Bushveld Vanadium will not in any way affect the development route of the Bushveld Iron Ore Project and is meant to improve the total combined value to the Company by fully developing a hitherto under-resourced (by way of both human and financial capital) vanadium deposit.

Two new vanadium zones found adjacent to MML

Further work on the now re-named Bushveld Vanadium Project has taken place over the last few months. This included assaying the hanging wall of the MML zone (the MML-HW) in the boreholes already drilled by the Company as well as the footwall zone (the AB Zone) in the BV-1 borehole located south and down-dip from the established 52 Mt MML resource (JORC-compliant).

The MML-HW has been assayed in two boreholes drilled by the Company, which targeted the MML. These boreholes were stopped short of drilling the AB Zone, which is intersected in the borehole BV-1, a historical borehole drilled in 1991 on the farm Bellevue (part of the Bushveld Resources prospecting right). These intersections are summarized in the table below:

*true thickness calculated assuming a dip of 20˚

Although in-situ grades for the MML-HW are low (owing to disseminated magnetite), the high vanadium content of the magnetite grains means that high-V concentrates can be achieved from this zone through magnetic separation .

Davis Tube Tests undertaken on the MML and AB Zone returned encouraging results as shown by the concentrate grades below:

- MML: 2.01% V2O5 , 56.86% Fe and 11.90% TiO2.

- AB Zone: 2.38% V2O5, 54.90% Fe and 9.91% TiO2

The diagram attached hereto shows the three parallel zones comprising the Bushveld Vanadium project:

The Bushveld Vanadium project may thus contain a potential >200 Mt vanadium-rich resource, placing it among the world's largest and highest-grade vanadium resources. In addition, the simple ore body layout (shallow-dipping layers) is amenable to low-cost open-pit mining targeting all three zones.

The table below shows the assays and calculated concentrate grades achievable on these horizons, alongside the original 52 Mt MML resource.

Processing

There are several existing operations in South Africa that have been mining and processing the MML in South Africa that provide processing precedents. Therefore, this drastically reduces the technology risk associated with the Bushveld Vanadium project.

They include:

· The salt-roast process employed by Rhovan on the western limb of the Bushveld Complex. This process involves milling the ore, producing a concentrate by magnetic separation, roasting the concentrate, and leaching vanadium from the roasted product

· The Highveld process employed by Highveld Steel on the eastern limb of the Bushveld Complex. This process involves pre-reducing the magnetite concentrate before feeding to a smelter where hot metal produced is fed directly into steelmaking, while a vanadium slag is treated through a vanadium recovery unit based on shaking ladles

· Hydrometallurgical processing options based on leaching and selective precipitation of iron, vanadium and titanium.

These will be investigated in the Scoping Study that the Company has already commenced. The Scoping Study will be based on an operation capable of supporting production of between 5,000 and 10,000 tons per annum of vanadium products.

Vanadium is a high value commodity with attractive prices. Long term prices for vanadium across different products are expected to be in the range of US$14,000 to US$17,500/t for standard grade V2O5, US$28,000 to US$35,000 for battery (electrical) grade V2O5, and US$28,000 to US$35,000 for ferro-vanadium.

Being a high value product, the envisaged scale of production would yield significant revenues while not subject to infrastructure constraints given its location on the Bushveld complex.

Work Programme for Bushveld Vanadium

The programme for the project going forward is designed to establish the true scale of the project and complete a Scoping Study and Pre-feasibility Study within 2014. This will include:

· Sample and assay the hanging wall unit on all boreholes drilled to date to define a JORC resource for the MML-HW

· Drilling to intersect the AB Zone and define a JORC-compliant resource on this zone

· Metallurgy studies - physical beneficiation (to produce a high-V titano-magnetite concentrate), as well as pyrometallurgy studies for a production of a vanadium and/or ferrovanadium product with iron ore and titanium by-products

· Complete scoping and subsequent pre-feasibility studies prioritizing production of vanadium/ ferro-vanadium products, with iron and titanium by-products

About Vanadium

Vanadium is a brittle, very hard metal, light silvery in colour which is stable in dry air at room temperature and oxidizes at high temperatures.

Vanadium uses

Vanadium is mostly used in the steel industry as a strengthening and anti-corrosive additive. Around 0.2% vanadium content increases steel strength up to 100% and reduces weight up to 30%. More than 90% of vanadium is consumed as ferrovanadium in the production of steel. This consumption is expected to increase significantly driven by China, where government policy to replace use of low strength steel bars with high-strength will drive up China's vanadium intensity of use, which is expected to rise by 31.4% between 2011 and 2016, raising the global intensity of use from 0.055kgV/t to 0.07kgV/t during the same period. This is significant, coming from a market that is the single largest consumer of steel.

Vanadium is also a key material in the production of high-performance batteries in the mass energy storage industry where vanadium redox batteries are attractive for their capacity to connect directly to power grids and streamlining intermittent flow of energy from wind turbines and solar cells. The consumption of vanadium in the redox storage batteries sector is forecast to rise to 8,500 tpa by 2017 from 1,100 tpa in 2012.

Vanadium use in in aerospace titanium alloys is currently the fastest growing subsector with vanadium consumption expected to rise from 3,000 tpa in 2011 to 6,000 tpa in 2016.

Vanadium sources

The world's vanadium reserves are concentrated in only three countries, which together account for 98% of the world's vanadium reserves: China (37%), South Africa (35%) and Russia (26%). In South Africa, virtually all the vanadium reserves are based on the Bushveld Complex where the Bushveld Vanadium Project is located.

It is frequently recovered as a by-product or co-product and is generally sourced in its primary state from deposits of titaniferous magnetite, phosphorous ores, uranium ores, iron sands, oil, oil shale, tar sands and vanadiferous clays. It can also be sourced by recycling spent Ni-Mo and Co-Mo refinery catalysts in the petrochemical industry and ash produced by combustion of oil emulsion in power stations.

Enquiries:info@bushveldminerals.com

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