Good day and welcome to the Bushveld Minerals Q4 Operational Update Conference Call. At this time, I would like to turn the conference over to Fortune Mojapelo. Please go ahead, sir. Thank you very much. It's a good afternoon from where I'm sitting in Johannesburg in South Africa. Good morning to the folks that are in the United Kingdom. I'd like to welcome you all to our fourth quarter and full year 2021 operational update call. Thank you very much for making time to listen and engage with us. I am joined on the call today by our Finance Director, Tanya Chikanza, who will be assisting. I'm pleased to report another solid set of quarterly operating results as our focus on stable, achievable production levels on the back of operational improvements and enhanced safety helped us to reach the upper end of the full year production guidance that we gave of between 3,400 mtV and 3,600 mtV. Specifically, group production for the 12-month period totaled 3,592 mtV, marginally lower than the 2020 12-month production figure of 3,631 mtV. With production in the second half 28% higher than in the first half. The higher throughput in the second half helped result in lower unit costs. At Vametco, specifically production cash costs for the 12-month 2021 was $24 per kgV, which was in line with the guidance of between $23.70 and $24.20 per kgV. Vanchem production cash cost, C1, for the 12-month period, same 12-month period, was $30.60 kgV, which also was in line with the guidance of between 30.3 and 31.1 dollars per kgV. These results demonstrate the progress from the work that we have done as part of the ongoing operational improvement plan to overcome operational issues that we experienced at the beginning of 2021. The investments we have made and continue to make in sustaining and growth capital at our assets to achieve stabilized production and unit costs at revised levels. We also are happy to able to report further improvements in our safety record with a Total Injury Frequency Rate in this quarter of 8.57. South Africa continues to edge towards normal operating conditions again, despite the surprising emergence of the Omicron variant late last year. While there was an increase in the number of COVID-19 cases at the company during the reporting period compared to Q4 2020, and this owing to the transmissibility of the Omicron variant, I'm pleased to say that all affected employees have recovered. Now talking about sales, for the 12-month 2021, group sales was 3,314 mtV, and this was below the production volumes that we reported. This was on account of continued logistics challenges associated or arising from the COVID pandemic as well as the well-reported unrest in South Africa during the month of July which resulted in some disruptions at local ports in the months of July and August. The result of this lower sales compared to production is that we had a buildup of finished product inventory of 278 metric tons of vanadium. I'm pleased to say that volumes, sales volumes have started to recover in Q4 2021 as drawn down warehouse stocks in the target markets are being replenished. We certainly are quite encouraged by what we observe in the overall vanadium markets with demand remaining robust and we're comfortable that our sales will catch up with our production. The vanadium price also reflected the stop-start nature of the global economic recovery during the course of the year, trading in a fairly broad range. Pleased to see that in the final quarter, vanadium traded at an average price of about $35 per kgV, which is some 32% higher than the previous year. This year so far, we've seen average FeV prices of approximately $35 per kgV across all markets in 2022, which we see as very encouraging signs or pointer for the year ahead. We ended the year with cash and cash equivalents of $15 million subsequent to the paying down of certain debt obligations, the ongoing capital expenditure during the quarter to support growth as well as operational stability. Cash was also impacted by the lower sales as reported, and the consequential higher working capital from the inventory buildup, that I just talked about. Now, looking at the year ahead, 2022, and what we can expect from a guidance point of view. We are quite excited about the year ahead as we edge towards the commissioning of Kiln 3 at Vanchem in Q2, which is expected to more than double annual production run rate at Vanchem from about 1,100 mtV to 2,600 mtV by the close of 2022. This will certainly help to reduce unit costs at Vanchem even further. Production growth is key to unit cost reduction and margin expansion, as reflected in the guidance for 2022. The full production benefit of Kiln 3, however, will be realized in 2023. Overall, we expect group production of between 4,200 mtV and 4,400 mtV in 2022, with volumes weighted towards the second half as Kiln 3 is ramped up towards the 2,600 annualized level by year-end, with lower production cash cost C1 of between $22.70 and $23.50 per kgV at Vametco and between $27.70 and $28.40 per kgV at Vanchem. Production guidance at Vametco is between 2,450 and 2,550 mtV, and at Vanchem it is between 1,750 and 1,850 mtV. From a capital expenditure point of view, we anticipate investing approximately $17 million or ZAR 260 million. Of this amount, ZAR 78 million, or in dollar terms, about $5.1 million, will be allocated to Vametco and ZAR 127 million, which is about $8.3 million, will be allocated to Vanchem and the rest towards Mokopane feasibility study and our Bushveld Energy division. I am quite proud and pleased to report the numbers for the fourth quarter of 2021, and they demonstrate our continual stable production as Bushveld heads towards another leg of volume growth off a solid production base. We indicated when we rebased our production, that our focus in 2021 was to achieve stability in our plants, consistent and predictable production levels. I look forward to updating our shareholders and stakeholders as we continue to advance our growth strategy, aiming for a run rate of between 5,000 mtV and 5,400 mtV by close of 2022. We continue to invest in sustaining and growth capital to maintain stability and provide the platform for growth to support the volume increase that we have planned for 2022. I'd like to take this moment to thank you all for your patience with us. We had a difficult start to 2021. I am very pleased to say that we have turned the corner. We have had three solid quarters of production. We do certainly hope and expect to continue that into 2022 as we grow our production. I believe that we couldn't be doing this at a better time in terms of the vanadium market as demand continues to strengthen in a way which we believe is well-suited for primary producers like ourselves. We certainly would hope that we are well positioned to take advantage of that market opportunity as it develops. Thank you very much for your time. I'm gonna pause and take questions at this point. Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. We will pause for just a moment to allow everyone an opportunity to signal for questions. Our first question today comes from John Meyer of SP Angel. Please go ahead. Good morning. Or good afternoon in South Africa. Thank you for the presentation and for the results. I'm sure it's been a tough year, so there's a lot to discuss. I'm not gonna ask. I've got quite a lot of questions, but I won't ask too many. I'm sure everybody wants to see stability and improvement in the operations. At the risk of sounding Chinese, everybody also wants stability as well as common prosperity, particularly from a shareholder perspective. I wonder if you could just tell us a bit more about the COVID situation in South Africa. How do you see the rand moving, because clearly it has an impact on your costs, and you may not want to try and forecast that, I guess. Can you talk a bit through about the problem with the kiln at Vanchem, and how that relates and what you're doing with the Upper Seam to fix that with the silica content. Can you also talk us through the reasoning for expanding Vanchem, which has higher costs, higher operating costs, over expansion at Vametco, which currently has much lower operating costs? I'll leave it at that for now. Thank you. Thank you, John, for the questions. I'm gonna take them in order. Let's start with the COVID situation. I think that we did see a spike in cases from the Omicron variant. I think the good news there is that it did not translate into a lot of deaths. Part of that is a function of the greater levels of vaccination that has taken place. I mean, if you look at today, our new cases are down to, I think, 2023. January number was sub 2,000 new cases reported in the previous 24-hour period. I think that, you know, barring the emergence of another variant, I certainly hope that that doesn't occur. With continual focus on vaccination, you know, I'd like to think and hope that we can start to return to some level of normalcy, on that front. You know, I guess we can only hope, right? Just, you know, in a very broad sense. The numbers we are seeing are certainly very encouraging. I mean, as I said, the increased vaccination rates are also very encouraging. We hope that soon we get to a point where COVID is like a flu, and doesn't pose a significant risk to the lives of individuals and also to our operations. You asked a question about the currency. I'm always very wary of making predictions around where the currency is going to go. I would say couple of observations. The kind of rates that we're seeing at the moment in exchange rates have been weakening. If I give you just some numbers. In 2020, we saw an average exchange rate of about 16.4. In 2021, the average exchange rate that was realized was about 14 rand compared to the U.S. dollar. Today we're seeing exchange rates of about 15.40 rand to the USD. What is the direction of travel? It does seem like we are looking at, I think, if you look at market consensus or analyst consensus, that we are seeing a rand that may well be weakening further during the course of this year. For purposes of our budgeting, however, we still try to keep a very conservative view on the exchange rate. We have worked with exchange rates that is stronger than the current levels that we are seeing. Which means that if the current level persists throughout the year or if the exchange rate weakens, all of that we expect will have positive benefits for our cost position, as well as for our revenues. There's a third question you asked around the Kiln 3, if I heard it correctly. Look, we are anticipating, we are on track with that project in terms of commissioning it in Q2. It does mean that we will require increased feedstock volumes. We started the Upper Seam project with a view to ensure that we provide support to Vanchem. Of all projects, I think the start will invariably have some teething problems, and which are largely resolved. We're confident that we will be in a position to support Vanchem ore requirement. The Upper Seam project is not the only source that we're looking at for Vanchem. There are other sources. We will be updating the market on that as we go. I'm not worried that Vanchem will not be able to get to have the feedstock that it requires at this elevated level of production. It's not only about the feedstock, it's about also making sure that we've got that feedstock in the right quality in a consistent basis so that it does not create disruption in terms of the operational parameters of Vanchem. Talking to your question around the Vanchem expansion versus Vametco. We've made the point before. In fact, there are two points I would make. The first one is that Operating Vanchem at 1,100 MTPA was never the intent. We're always clear that we will need to refurbish the plant. It's as you push more volume throughput in Vanchem that you start to see improvements in the cost of production of Vanchem. Certainly, the improvements we see in 2022 are a result of the volume a ramp up. Keeping in mind that we're only commissioning in Q2, you'll appreciate that the full cost benefit of those higher volumes will come through in 2023. Beyond that, once we have Vanchem operating at an annualized rate of 2,600, and which takes us to our range of 5,000 mtV -5,400 mtV per annum. The next question becomes what are we going to prioritize for additional volume growth between Vametco and Vanchem? The answer to that question is really down to number one, what is the level of CapEx required at Vametco or Vanchem in terms of getting that additional kilogram of vanadium produced. And secondly, what impact will that incremental production have in terms of the OpEx—the operational cost or the production cost at Vanchem and at Vametco? All of that is the subject of the feasibility studies that we've been doing in terms of growth initiatives. We have mentioned before that initial or rather preliminary indications from the work we have done suggest that it will be cheaper from a CapEx point of view to increase production at Vanchem than at Vametco. I mean, all of the detail, the precise detail of that, as I said, will come with the feasibility studies. That's the driver of that decision point. We will not be prioritizing Vanchem over Vametco if it, one, from a CapEx point of view, doesn't have advantages. Two, from a cost dilution or production cost impact, it also was not accretive. Those two will be key considerations for us beyond 5,400 mtV. Thank you. We will now take a question from Nick Chalmers of Alternative Resource Capital. Please go ahead. Good morning, Fortune. Thanks for taking the time for the call. I've got two, three questions, if you don't mind. Firstly, on Vametco, looking at the second half performance of last year, it put you on a run rate of closer to, well, around about 3,000 tons a year annualized rather than guidance, which is some way below that. Are you just being conservative with guidance or is that annual target for this year factoring in that there will be some maintenance downtime at some point throughout the year? At Vanchem, I'm just touching on your comments previously. Can you confirm whether that operation is being 100% fed by the Upper Seam project now, or is there still stocks of third party material that you're feeding into it? What do you see as the key risks associated with the ramp up and with commissioning and ramp up of Kiln 3? Nick, to your question about, thanks for that question around the guidance we're providing for Vametco. I think the answer I'll give you is that, when we did the rebasing last year, one of the things we indicated was that we wanted to focus on putting in place the systems and the tools, the operational disciplines to ensure a consistent production base. That means, among other things, you know, being very strict in adherence with our plant maintenance programs. In some sense, yes, you could be. You're right in saying that, there's a certain level of conservatism in the way we set our guidance. You'll recall that there's a philosophy we outlined last year where we said that, you know, we're setting our monthly production levels at Vametco at about 240 mtV. That is backed by a fairly detailed metallurgical balance with a set of metrics around things like how many tonnes we expect to mine, what sort of vanadium grade we anticipate to feed into the kiln, the recoveries, the online time for the kiln, et cetera, et cetera. There's quite a detailed method that backs up that number. Now, are there opportunities to improve in any of those? There are, and we're exploring that always. Until that we have backed any improvements consistently for a period of at least 90 days, we think it's dangerous to put those kind of improvement opportunities into your guidance number. It is I think a very healthy approach in terms of, you know, guiding our production levels, even if we do believe that there are opportunities to improve across the production chain. Alongside that, I think one of the lessons from 2020, granted that the COVID outbreak and which had resulted in us losing production for a month, and to try and catch up with that lost production, the level of maintenance that we did create some risks for us in the plant. I think in a world in which we wanna absolutely make sure that plant integrity is maintained, you know. That focus requires us to ensure that let's continue producing at the level that we are doing on a sustainable basis. Let's find improvement opportunities which there are, and only when we have banked them sustainably, consistently over a period, as I said, of about three months, can we look at revising our guidance to reflect those improvements. Three, let's make sure that, you know, we adhere to our plant maintenance program. It is absolutely critical, particularly when you're dealing with the plant of the age of Vametco and Vanchem. In respect of your second question, talking to the supply of ore to Vanchem. We are currently supplying material from the Upper Seam project, and we want to ensure that we have a consistent supply from there, but it is not the only source. We are also looking at some supply of concentrate from Vametco. The upper upstream part of the Vametco plant does have capacity to support with some concentrate supply to Vanchem. We are exploring ways to improve even further the scope of concentrate supply from Vametco to Vanchem. The issue is not the ore body at all. I mean, we've got a large resource base that can support that. It'll be a matter of making sure that the concentrate production capacity is optimized. There are still some third-party sources that we do look at, but I think you made a good point when you point out that in all of this it's important that we providing consistent feed in terms of quality. It may all be vanadium-bearing ore, and in fact, it can all be carrying vanadium grades of about 1.6% or 1.7% V2O5. There are all these other elements like your silica content, and your calcium content, et cetera, which is important in terms of how you tune your plants to operate optimally. The team's focus is ensuring that you know we get that right in terms of the mix of the feedstock, and do it in a way that we can sustain that throughout the year. That's the approach. Again, as I said, between the Upper Seam project, the concentrate production at Vametco and one or two other sources which we will talk about in due course, as we have indicated that third parties are a part of our strategy, we're comfortable that we'll be able to provide that consistent base of feedstock at a relatively consistent quality level. Thanks. Can I just ask one more question, more of a general one, just your thoughts on, you know, the vanadium market and the outlook this year. What geographic markets are you seeing the strongest demand from currently? You know, where do you see coal production going? Has it maxed out? Is there potential for that to come off this year? Yeah, thanks for that question. Let me start with where demand comes from. As always, the steel sector continues to be the anchor. We are pleased to see, for example, new steel capacity being commissioned in the U.S. We are pleased to see progress on the infrastructure spending program in the U.S., which will support increased vanadium demand from the steel sector from that geography. You know, we are seeing, for example, a very good uptick in vanadium prices in the U.S., which we think is in response to that increased demand. Certainly in terms of the orders from our customers there, it supports that view. I don't think that the U.S. will be the only market to continue supporting the demand from a steel perspective. We think China will continue to still play a role in terms of the intensity of use of vanadium in that market, notwithstanding you know the impact of the recent issues associated with the property sector there. Again, general sense is that that impact will be temporary and that we will see infrastructure spending in the Chinese economy there picking up. Indeed, I think we've seen already some announced programs from the government running into hundreds of billions of dollars. The short answer to all of this being that we think demand from the steel sector will continue to grow. I think that the European market, if and as it does pick up, will also support that. In terms of the energy applications, again, very pleased to see the growing momentum in terms of not just energy storage, but stationary and particularly long-duration energy storage. I think the term long-duration energy storage is starting to become a common term when people are talking about energy storage, and that's good because that's exactly the space in which vanadium redox flow batteries are quite distinctive. The Chinese government has specifically made some policy pronouncements in support of vanadium redox flow batteries, which we are seeing come through in the form of new projects being announced, and these projects are typically quite large, running into hundreds of megawatt-hours. We are seeing that translate into inquiries for vanadium, particularly for conversion into electrolyte. Again, the kind of numbers we're seeing coming out of China are quite encouraging. You would have seen, I think something we did say late last year, that forecast that we should see in excess of 9,000 tons of V2O5 demand from the Chinese market for the VRFB sector. That's so far as demand is concerned. When we talk supply, I've always maintained the view that co-producers' ability to respond to growing demand is limited. One is limited by development in the steel sector itself in terms of what happens to steel prices. Yes, when steel prices went above $1,000 with iron ore prices also running above $150, we saw co-producers maximizing their production and operating at near full capacity, and also quite exclusively utilizing their vanadium bearing ores. As the iron ore prices have come up, and as steel prices come up, we expect the incentive for blending with hematite, which of course doesn't contain vanadium, to return in time. We expect as a consequence of that, the level of selective production in China to, if not dropping, at least we don't expect it to be increasing materially going forward. Which of course raises the question, where does this incremental supply come from? In terms of that, you can talk secondary producers. There are a couple of parties like AMG who are increasing their capacity. Remember that secondary producers are dependent on a third-party source of spent catalysts from the oil industry. We think that upside in terms of supply growth is limited. That takes you back to primary producers in terms of which there's few projects, greenfield projects under development. We think that the space really is for existing producers to scale up production on a brownfield basis. That's the opportunity we're angling for as a company. One other point I'll just add is, of course, the disruptions from the rainy season in Brazil have had an impact in terms of production from Largo, you know, which has all been in the market, so everybody would have seen that. That should contribute rather, let me say, to also a tighter vanadium market. Ultimately, in terms of where prices go, while we are careful not to put any particular forecast, you know, you have to keep going back to what is incentive price for new supply. In respect of that, again, we think you have to be looking to incentive price for primary production, because all other forms of production are gonna be a lot more expensive from a CapEx point of view and from an OpEx perspective. Thank you. Appreciate that, Fortune. Once again, should you wish to ask a question, please press star one on your telephone keypad. We will now take a question from Chris Ward, a private investor. Please go ahead. Hello. Fortune, good to hear from you. I'm interested in two particular projects. Obviously, we're not hearing a great deal about the mini grid, the Vametco. I'm just wondering what the progress is on that, please. Thanks for that question. We are due to put out an operational update on Bushveld Energy, which will be coming out in the next few weeks. You will see more details there. Suffice to say that the mini grid remains an important project and it is progressing. As we have reported in the past, the focus areas are financial close and ensuring that we start construction. We have started some elements of that already. But I don't wanna go into a lot more detail other than to say that the project remains on track and you know, specific details of which we'll put in the Bushveld Energy operational update. The significance of the mini grid, as you all know, is the way in which it provides a proof of concept for PV plus storage solutions for large energy users like ourselves. In an environment in South Africa where electricity tariffs are not only have they been rising quite strongly in the last few years, but they're set to continue growing. Also in an environment where from a regulatory perspective, the government does recognize the value and importance of encouraging large power users to increasingly generate power for themselves. It's a massive, huge market space for VRFBs. We can't wait to get our mini grid up and running because it's gonna be a very live, real, test case and business case proof of concept for for these solutions, which we think will open up significant opportunities for VRFBs. Long answer, I apologize, but you know, short answer is on track. I think you want more specific details around when we expect to have it completed by and switched on. As we've reported before, the target for that is still this year, and that remains the case. Thank you. Thank you, Virgil. On that particular point, it may be a duplication that you're putting out in the new event, but I'll ask the question. Is there any intent to actually increase the capacity, obviously subject to previous licensing conditions or yeah, I'm trying to think of the word now, but. Sorry, your line is a bit bad. Do you mind just asking the question again? I couldn't quite hear it. Apologies. Yes, certainly. It may be a duplication that will be coming out in the RNS in due course. I just wondered whether there was any intent on behalf of the company to increase the capacity of the mini grid from 1 MW, obviously in line with the release of the strict restrictions that there were. Yeah. When that decision was made. Yeah, that's a very good question. You'll recall that when we started the mini grid, we were limited to a generation capacity of 1 MW. That was just the regulatory environment that was there. If we wanted to do more, we would have had to get a generation license, and it was pretty much prohibitive. We took the view to just make sure that we do it at that scale, so we can demonstrate the use case and the business case. Since then, of course, the regulations have been relaxed significantly. The project itself, we've set it at 3.5 MW PV solar generation with 4 MWh of VRFB. The overall requirement across our assets we have already worked out, and we think that this taking into account production at full capacity across our assets, the market opportunity, or rather the opportunity in terms of self-generation, is as much as in excess of 50 MW. In terms of the implied opportunity for PV, if you're pairing it with storage, you're talking in excess of 120 MW. In terms of energy storage, you're talking at anything between 50 MWh and 180 MWh. The short point being the opportunity is there, it is large, and we call this captive opportunities. We certainly do intend to use the mini grid business case to scale up and go on to do a much larger PV plus storage solution across our operations. Thank you. That's really useful. My second point around really the electrolyte production. Before we come to the electrolyte production, just one other point I wanna just add that what is particularly good about the mini grid project also is the fact that it is a standalone project, and it is a project that's been able to attract debt financing and that's been able to attract equity financing from third parties. Right? That's also an important tick in terms of proving the business case. One, will it generate supplier's power on a competitive tariff as a user? Yes. Two, is the economics of such a project attractive enough for third parties investors to come in to? Answer is a very solid yes. As you scale up, both of those two metrics can only get better. That's brilliant news, and certainly look forward to the RNS in due time. Thank you. Appreciate it. The second point was really around the electrolyte production, and exactly when you think that electrolyte would be loaded into those lorries and literally driven off the site. There's some suggestion that it might be later this year or early next. I was wondering whether, one, you could help us with that. And two, how quickly, if that is all working, do you think we can ramp up from 200 MWh to 800 MWh? Yeah, look, our target is still 200 MWh. We think that is a good scale. At that level, it's one of the largest electrolyte manufacturing facilities outside of China. We certainly do hope that it will prove to be too small if the market picks up the way we would hope it to. That just makes it, right, an easy business case for scaling up. We already do have the relevant EIA necessary to scale up production there from 200-800 MWh should we need to do that. This plant is specifically modular, so we can do that in a modular fashion. If you followed, whether on social media, I see that there are some people who are super tracked, which you nowadays can do remotely, progress with the construction. The construction is progressing. We are pleased with the progress that is being made there. We have said that we anticipate, I think, completing this plant later this year or early next year. I think the specific dates are again, let me not commit myself here beyond saying that we will have that included within the Bushveld Energy operational update that will be coming up in the next few weeks. Thank you, Fortune. Thank you for your answers. I would now like to turn the call over to Fortune Mojapelo for any additional or closing remarks. Thank you very much. I'm gonna just repeat what I did say earlier on, that our focus in 2021 was really about making sure that we prioritize stable production. It does mean that we increased our spending on maintenance. We increased our spending on sustaining CapEx because we think that that is critical. We don't necessarily anticipate elevated maintenance and sustaining capital spend indefinitely into the future, but we will continue to commit to it to ensure that you know the integrity of our assets is maintained and also to ensure that we produce on a consistent basis in a sustainable manner. If I just look at the level of spending that we have done on maintenance and sustaining CapEx since we took over the assets relative to prior, you know, it is something that we do take some pride in, because we think it's the right thing to do. As we get volumes through the plant increasing, and as we get efficiencies coming through, we're fairly confident that you will see that flow through into our unit costs going forward. We do keep a close eye on our cost of production. I have mentioned before that we do anticipate providing more color as far as our production costs are concerned going forward. That's something that you can certainly expect to see from us. We do think that level of transparency will help the market understand our operations better and also see the opportunities that lie with them. With a stable operational basis established and with the platform for growth firmly set, we think we can now be more active externally in terms of communications. We certainly expect to provide more regular updates across different media, including social media platforms going forward. I do note that there has been, in a sense some call for more communication. As the Chief Executive Officer, I wanna say that our mindset in 2021 really was about let's put our head down, let's make sure that we can demonstrate to the market that we are capable operators of these assets, and that we are good stewards thereof. I think that we have done that. I expect to continue on that trajectory this year. Certainly we also expect to increase our level of communication with the market, and so that's something you can look forward to. I'm gonna end on that note and thank you all very much for your time and for the questions that you put forward. I look forward to engaging with you again in the near future on another quarterly update. Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.