Bushveld Minerals Regulatory News (BMN)

Bushveld Minerals Ltd

("Bushveld" or the "Company")

Bushveld Iron Ore Project: MML Resource Upgrade and P-Q Zone Metallurgical Update

Bushveld Minerals Limited (AIM: BMN), a mineral development company focused on iron and tin projects in southern Africa, is pleased to provide an operations update on their iron ore project in Limpopo Province, South Africa.

Highlights:

·; Upgrade of the Main Magnetite Layer ("MML")Mineral Resource from Inferred to Indicated category (JORC 2012 compliant)

·; Exclusion of a 2.3 m thick barren parting in the MML has lowered the total tonnage from 66 million tonnes to 52 million tonnes but significantly increased the grades (44.7% Fe, 1.48% V2O5, 9.7% TiO2)

·; Positive pyro-metallurgical testing results on the P-Q Zone, including pre-reduction and smelting tests for two concentrates

·; Release of Scoping study imminent

Commenting on the operational update, CEO of Bushveld Minerals, Fortune Mojapelo said:"The updated resource model for the Main Magnetite Layer significantly increases the iron and vanadium grade of the deposit. With a 1.48% V2O5 average grade, we are excited about the vanadium potential of this resource. In addition, we are pleased to announce the results of pyro- metallurgical tests on the P-Q Zone, which are very positive. The potential to produce both pig iron and a saleable high-Ti slag could significantly enhance the economics of the project. The suitability of the material to pre-reduction also allows for optimisation of downstream processing of the concentrate products. We will look to further develop these options during pre-feasibility studies on this project following the imminent release of our scoping study."

Resource update for the Main Magnetite Layer

Recent mineral resource modelling of individual stratigraphic layers in the Main Magnetite Layer ("MML") is reported below.

Results of detailed logging and mineral resource modelling of the Main Magnetite Layer

During 2012, 13 boreholes were drilled targeting the MML (totalling 927.49 m). Of these, 9 intersected the MML and the results for 7 of these boreholes were previously reported (see Operations Update - Bushveld Iron Ore Project, published 17 January 2013). The results for an additional two boreholes (MW1 and MW3) are presented below. All 9 additional borehole intersections of the MML have been used to update the Mineral Resource Estimate for the MML.

Previous Mineral Resource Estimates on the MML modelled the entire mineralised package (including the parting) as a single unit. Bushveld commissioned The MSA Group (who have completed all previous Mineral Resource Estimates on the project) to model the MAG3 and MAG4 units individually and to exclude the low-grade parting from the resource. The results of the updated Mineral Resource Estimate are presented below:

The increase in the number of drill holes has allowed the modelling of two distinct geological units (MAG3 and MAG4), where the grade of the mineralisation is above 40% Fe, and to exclude the essentially barren parting. This exclusion and a slight increase in the dip angle, compared to the previous estimate, resulted in a decrease from 66 million tonnes to 52 million tonnes but produced a well-defined resource with a higher overall grade. Further strike extensions to the MML have already been identified, providing for potential to expand this resource in the coming months.

Metallurgy Update - Bushveld Iron Ore Project

Recent results of pre-reduction and smelting tests for two concentrates are reported below.

Pyrometallurgical tests

Bushveld Minerals has undertaken pre-reduction and smelting work at the High Temperature Laboratory in Mintek's Pyrometallurgy Division - this division of Mintek focuses on laboratory-scale studies for the minerals industry. Two Ti-magnetite concentrate samples from the massive (high-grade) Q2 unit of the P-Q Zone were tested, a coarse (6 mm > 1 mm) and a fine (< 45 µm) product.

This work involved low-temperature reduction to produce a higher-value metallised iron product, and laboratory-scale smelting tests and theoretical smelt modelling to test the production of pig iron and a potentially marketable high-Ti slag products.

1. Pre-reduction

Pre-reduction tests were run at a range temperatures between 1000° C and 1200° C, and the degree of reduction (i.e. percentage of iron reduced to metallic form) was calculated over time for each test. For both the fine and coarse concentrates, significant reduction (>85% of iron metallised) was achieved at 1150° C within 2-4 hours. Optimisation of the reductant was also shown to significantly speed up reduction rates, with the potential to and reduce reduction temperatures to ~1100°C

2. Smelting

The aim of the smelting tests was to prove the production of pig iron and high-Ti slag. Laboratory-scale smelting tests at 1550° C produced metal with >96% Fe and 0.18-0.26% V. Laboratory scale smelting cannot evaluate the possibility of producing a high-Ti slag product, but the outcomes of these tests were used to calibrate a thermodynamic model to test smelting of these concentrates under different conditions.

These models show that smelting of both the coarse and fine concentrates renders high-Ti slags that are stable under furnace temperatures of 1700˚ C, with compositions of ~60% TiO2. Potential also exists for an even higher grade TiO2 slag to be achieved with optimisation of furnace conditions and improved concentrate grades.

These tests have shown the suitability of the product for downstream processing options, enhancing project development options and increasing marketability. In particular, the potential credit from producing a saleable high-Ti slag may significantly enhance the economics of the project.

Further details of the procedures and outcomes of both pre-reduction and smelting tests are contained in an Appendix.

Enquiries: info@bushveldminerals.com

- ENDS -

Notes to the editor

Bushveld Minerals Limited is a mineral development company focused on the Bushveld Iron Ore Project and the Mokopane Tin Project, both located on the northern limb of the Bushveld Complex, South Africa.

The Company was admitted to the Alternative Investment Market of the LSE in March 2012.

Appendix - detailed information regarding pyrometallurgical testwork

Bushveld Minerals has undertaken pre-reduction and smelting work at Mintek on magnetite concentrate samples from the massive (high-grade) Q2 ore zone. This work involved low-temperature reduction to produce a higher-value metallised iron product, laboratory-scale smelting tests on these concentrates, and semi-empirical thermodynamic modelling to evaluate the production on a high-Ti slag.

Two samples were tested at the High Temperature Laboratory in Mintek's Pyrometallurgy Division - this division of Mintek focuses on laboratory-scale studies for the minerals industry. A -6mm, +1mm Heavy Liquid Separation (HLS) concentrate and an 80% passing -45µm concentrate produced though Low Intensity Magnetic Separation (LIMS). Both concentrates were produced at SGS Laboratories (where the extractive metallurgy programme has been carried out).

Pre-reduction

Thermo-gravimetric analysis was conducted to investigate pre-reduction of these samples.

Procedures for the tests included:

1. Estimation of the amounts of ferrous (Fe3+) and ferric (Fe2+) iron present in the samples, assuming all iron as magnetite

2. Calculation of the amount of stoichiometric C required to reduce the oxides to their metallic Fe, and the theoretical degree of reduction

3. Thermogravimetric analysis (TGA)  to establish the temperature ranges at which reduction takes place

4. Iso-thermal pre-reduction tests at temperatures established in the TGA tests

Pre-reduction of the concentrates was undertaken at a laboratory scale in a thermo-gravimetric (TG) tube furnace. The objective was to study the pre-reduction of the two concentrates with emphasis on the degree of metallisation and kinetics of the reaction.

Tests were run at temperatures of 1000° C, 1050° C, 1100° C, 1150° C and 1200° C. (5 tests per concentrate and 10 in total). The theoretical mass loss was calculated assuming all ferric and ferrous iron are reduced to metallic iron. The corresponding stoichiometric amount of carbon was calculated, and carbon in excess of this amount was added to ensure total reduction. This was added as Sascarb, a very high carbon petroleum coke. The experimental mass loss was recorded during the TG tests, and hence the degree of reduction (DOR) could be calculated using the formula:

DOR = Experimental mass loss / Theoretical mass loss * 100

Pre-reduction tests for the fine (-45µm) DMS concentrate

The finely-milled (80% passing 45µm) LIMS concentrate produced by SGS had the following composition:

Fe3O4 Al2O3 Na2O MgO SiO2 P2O5 K2O CaO TiO2 V2O5 MnO

69.23 3.85 0.19 1.58 3.23

With all iron reported as Fe3O4 (i.e as magnetite)

Pre-reduction tests show that temperatures of >1150 ˚C are required to achieve levels of pre-reduction in excess of 90% for the coarse concentrate. However, at these temperatures, >85% reduction is achieved within 2 hours.

Temp (°C) DOR (%) 1hr DOR (%) 2hr DOR (%) 3hr DOR (%) 3.5hr

1000 28.7 37.3 43.1 45.1

1050 46.2 56.6 60.7 62.2

1100 64.3 74.7 78.7 79.9

1150 75.5 86.2 92.5 94.5

1200 91.6 99.4 102.3 103.3

Analyses of the 1150 ˚C reduced product (done at UIS Analytical Services, an independent testing laboratory in Centurion, South Africa) to confirm the degree of reduction in the sample shows that 86% of the iron in the sample has been metallised, with only 2% of the iron remaining as Fe2O3.

FeT (FeMet FeO Fe2O3) Al2O3 TiO2 SiO2 CaO MgO K2O MnO

63.5 (54.8 10.0 1.32 ) 4.04 19.8 3.81 0.65 1.78 0.034 0.42

Pre-reduction tests for the coarse (-6mm +1mm) DMS concentrate

The coarse (-6mm, +1mm) DMS concentrate produced at SGS had the following composition:

Fe3O4 Al2O3 Na2O MgO SiO2 P2O5 K2O CaO TiO2 V2O5 MnO

73.38 2.88 0.32 1.65 4.66 0.02 0.04 0.75 19.00 0.33 0.36

With all iron reported as Fe3O4 (i.e as magnetite)

Pre-reduction tests show that temperatures of >1150 ˚C are required to achieve levels of pre-reduction in excess of 90% for the coarse concentrate. However, at these temperatures, ~85% reduction is achieved within 3 hours.

Temp (°C) DOR (%) 1hr DOR (%) 2hr DOR (%) 3hr DOR (%) 3.5hr

1000 23.5 28.3 31.1 32.4

1050 32.8 41.3 46.6 48.5

1100 52.3 63.7 68.0 69.5

1150 71.8 80.7 85.6 87.2

1200 74.7 83.5 87.4 88.9

Analyses of the reduced product to confirm the degree of reduction in the sample (done at UIS Analytical Services) shows that at 1150 ˚C, 52% of total iron has been metallised, with 16% of the iron in the sample remaining as Fe2+.

FeT FeMet FeO Fe2O3 Al2O3 TiO2 SiO2 CaO MgO K2O MnO

55.2 28.8 26.0 8.8 4.76 21.0 5.81 1.06 2.04 0.060 0.40

Effect of reductant on reduction rates and temperatures

The use of a more reactive reductant can significantly influence the outcome of reduction rate tests. A single test was conducted to evaluate the possible effects in this case. Sascarb is known to be a fairly slow reductant, and thus activated carbon was used to attempt to speed up the reaction. The extent and rate of reduction was significantly impacted, with >90% reduction of the -6 mm sample within ~4 hours achievable at 1100°C, indicating that lowered reduction temperatures might still produce acceptable reaction rates; depending on the ultimate choice of reductant.

Smelting

The aims of the smelting tests that were conducted was to prove the chemistry of the slag and metal produced by reacting the coarse and fine products in conditions similar to what typical furnace operations would be like.

In fluxed smelting, the purpose of industrial operations on similar titaniferous ores is to recover as much of the vanadium and iron in the feed into the metal, while minimizing operational costs. This requires operating the furnace at as low temperatures as possible to minimize refractory wear and energy costs and producing as little slag as possible, as slag requires fluxing agents to be added and represents an energy loss when removed from the furnace.

The coarse and fine samples were both processed at 1550°C. Metal and slag compositions are shown in the tables below:

Metal compositions:

6mm DMS Si Ti Fe V Cr C S P Total

Test 1 0.43

Test 2 0.78 0.06 96.86 0.23 0.10 1.76 0.19 0.02 100

Test 3 0.91 0.34 96.01 0.26 0.09 2.24 0.13 0.02 100

45mm LIMS Si Ti Fe V Cr C S P Total

Test 4 0.13

Test 5 0.75 0.14 96.83 0.24 0.06 1.89 0.08 0.01 100

Test 6 0.74 0.34 96.02 0.25 0.07 2.48 0.09 0.01 100

Slag compositions:

6mm DMS MgO Al2O3 SiO2 CaO TiO2 V2O5 Cr2O3 MnO FeO Total

Test 1 15.16 18.39 22.36 14.14 26.14 0.17

Test 2 16.25 18.11 21.16 14.56 28.06

Test 3 13.78 17.58 17.29 11.34 22.21 0.16

45mm LIMS MgO Al2O3 SiO2 CaO TiO2 V2O5 Cr2O3 MnO FeO Total

Test 4 15.30 18.12 20.26 13.76 27.56 0.17

Test 5 16.25 18.24 19.52 14.28 29.56

Test 6 16.77 23.25 18.55 12.05 26.72 0.11

* Although it is reported as FeO, the iron present in the slag is most likely due to entrainment of metal in the slag, and not as result of incomplete reduction.

It should be noted that these slags contain significantly higher amounts of alumina than would be the case under normal operation. This is because of the necessity to add Al2O3 to the mixture to prevent the Al2O3-based crucible from being dissolved by the slag. Owing to this compositional constraint on laboratory-scale smelting tests, the possibility of producing a high-Ti product cannot be evaluated by this testing.

However, the outcome of these tests were used to calibrate a thermodynamic model of the mass and energy balance for smelting of these concentrates under different conditions. This semi-empirical model, developed for Mintek's in-house Pyrosim software, was used to evaluate the production of pig iron and a high-Ti slag.

A conservative stable slag (8% FeO) for high iron recovery to the metal was selected for the models, and higher iron recoveries to the metal were not evaluated as slag stability is not guaranteed at lower FeO contents in the slag. The major component in the slag is TiO2 and this high-grade titania slag may offer the possibility to upgrade the TiO2 content to a saleable industrial grade relatively easily.

The smelting of both the coarse (-6mm) and fine (-45µm) concentrate renders TiO2 in the region of 60%, with slag temperatures in the furnace of 1700˚ C. In the event that the slag stability could be maintained under highly reducing conditions (i.e. FeO

Modelled chemical compositions of a high-Ti slag

TiO2 FeO SiO2 Al2O3 MgO CaO Total

6mm DMS 59.4 8.0 14.6 9.0 5.1 2.4 98.5

45mm LIMS 60.1 8.0 10.8 12.9 5.3 1.6 98.7