Bushveld Minerals Limited Final Results for Year Ended 31 December 2023

RNS Number : 4538U

Bushveld Minerals Limited

28 June 2024

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

28 June 2024

Bushveld Minerals Limited

("Bushveld Minerals" "Bushveld" or the "Company")

Full Year Results for the 12-month Period Ended 31 December 2023

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium producer is pleased to announce its full year results for the year ended 31 December 2023.

FY2023 Financial Highlights

· Revenue of US$137.5 million (2022: US$148.4 million).

· Underlying EBITDA¹ loss of US$7.5 million and adjusted EBITDA¹ loss of US$66.1 million (2022 Underlying EBITDA loss of US$22.3 million and adjusted EBITDA loss of US$1.7 million).

· Impairment losses of US$58.6 million (2022: US$24.0 million). US$49.6 million of the impairment losses pertain to Mokopane and US$8.2 million to Vanchem.

· Net loss of US$104 million (2022: US$35.4 million).

· Free cash flow² of negative US$9.4 million (2022: negative US$14.6 million).

· Cash and cash equivalents of US$1.3 million (2021: US$10.9 million).

· Net debt of US$105.8 million (2022: US$79.5 million).

· The Group conducted, during the end of 2023, an equity raise and entered into agreements with Southern Point Resources ("SPR") for a cumulative proposed investment of US$69.5 - US$77.5 million.

1. Adjusted EBITDA is EBITDA, excluding the Group's share of losses from joint ventures and the remeasurement of financial liabilities. Underlying EBITDA is Adjusted EBITDA excluding impairment charges.

2. Free cash flow defined as operating cash flow less sustaining capital.

Group Priorities and Outlook

· Complete outstanding conditions of the Vanchem sale

· Drawdown on additional funding from SPR

· Optimising operations and right-sizing the organisation to ensure that Vametco is a cash-generating asset

· Increasing the capacity of the Barren Dam at Vametco

· Ensure constant monitoring of the slimes dam

· Attaining Sustainable production at Vametco of 240mtV per month by Q4 2024.

· Complete the sale of Bushveld's non-core assets - Cellcube, Lemur and the electrolyte facility

Investor Session

Bushveld Minerals Chief Executive Officer, Craig Coltman and Chief Financial Officer, Robbie Taylor will host an investor session on Tuesday 2 July 2024 at 14:00 UK (15:00 SAST) via the Investor Meet Company platform to discuss the 2023 full year results.

The session is open to all existing and potential shareholders. Investors can submit questions via Investor Meet Company dashboard up until 9:00am the day before the meeting. Pre-submitted questions will be prioritised.

Investors can sign up to Investor Meet Company for free and register for the event via:

https://www.investormeetcompany.com/bushveld-minerals-limited/register-investor

Investors who already follow Bushveld Minerals on the Investor Meet Company platform will automatically be invited.

Annual Report

The Annual report and accounts will be available on the Company's website shortly and physical copies of the Annual Report and Notice of Annual General Meeting ("AGM") will be posted to shareholders who have elected to receive them, on 11 July 2024.

Enquiries: info@bushveldminerals.com

Bushveld Minerals Limited		+27 (0) 11 268 6555
Craig Coltman, Chief Executive Officer


SP Angel Corporate Finance LLP	Nominated Adviser & Joint Broker	+44 (0) 20 3470 0470
Richard Morrison / Charlie Bouverat
Grant Barker / Abigail Wayne

Hannam and Partners	Joint Broker	+44 (0) 20 7653 4000
Andrew Chubb, Matt Hasson, Jay Ashfield

Tavistock Communications	Financial PR
Gareth Tredway / Tara Vivian-Neal / James Whitaker		+44 (0) 207 920 3150

ENDS

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a primary vanadium producer. It is one of the world's three primary vanadium producers, offering compelling exposure to vanadium through its upstream asset.

Detailed information on the Company and progress to date can be accessed on the website www.bushveldminerals.com

Chairman's Statement

Stabilising business foundations for future growth

DEAR SHAREHOLDERS,

It would be remiss of me not to begin this letter with an acknowledgment of the unprecedented state of flux that has characterised Bushveld's performance during the period under review.

Over the last 15 months, the Company has experienced a significant change in Executive Management and a restructuring of its head office, evolved its strategy to reflect financial realities, navigated funding hurdles, implemented necessary austerity measures, and intensified efforts to improve the operational performance of its assets. All of this at a time when vanadium prices have been subdued and unsupportive, with the geopolitical arena becoming increasingly unstable and complex.

A key event of the year was the change in leadership of the Company with the departure of Fortune Mojapelo at the end of June 2023. Having co-founded Bushveld Minerals back in 2012, Fortune led Bushveld Minerals' evolution from explorer to producer. The Company wishes him well in his future endeavours. Sadly, the Company also had to engage in right-sizing measures to reduce costs and overheads. A number of staff had to be let go in this process and we also wish them well going forward.

Since stepping into the role of CEO in July 2023, Craig Coltman has done a highly commendable job under challenging circumstances. Under his leadership, much progress has been made in overhauling and simplifying the Company's operations and strategy to refocus on the fundamentals of the business, being the mining and beneficiation of vanadium. This progress will be vital to the future performance of the Company. Whilst not yet reflected in the financial outcomes, the overhaul implemented by the Management team will become clearer when there is a rebound in the price of our commodity.

This has been a significant change for Bushveld. The strategic switch in direction to being a pure vanadium play has not only been undertaken with the objective of simplifying the business model but in recognition that the Company did not have sufficient financial strength to build a vertically integrated mining and energy entity. While vanadium may well have a future as an energy mineral, Bushveld was unable to attract or generate the capital to be a pioneer in executing this long-term opportunity. Following the sale of Vanchem, Bushveld will continue to move towards operating in an agile and lean manner by focusing on getting the Vametco plant and its long-life mine into an efficient, sustainable, cash-producing asset. Consequently, the Company is engaged in the disposal of its investments in the sectors unrelated to the production of vanadium.

Under the new leadership, realistic production targets have been set involving the strengthening of core operations. Management has also endeavoured to stabilise and improve the Company's financial resilience, notably through the restructuring of the Orion convertible loan note, the commitment of US$18.4 million additional equity, of which US$14.9 million has been received, as well as the pending sale of the Vanchem facility.

The Board recognises Craig's candid engagement with his colleagues and shareholders in providing a realistic and frank assessment of the business and what actions have been and still are required to be taken to facilitate the restoration of long-term value. While there is still a way to go on some of the restructuring and operational initiatives announced, the Group looks forward to achieving a potentially more deliverable proposition and a refocused business model geared towards the efficient production and sale of vanadium from its South African production asset, Vametco.

We thank shareholders for supporting the conditional sale of Vanchem, an action that allows us to rectify the Group's overdue creditor balances as well as providing adequate working capital to fund ongoing operations at Vametco.

During the year, Southern Point Resources ("SPR") became a new major shareholder and supporter. The multi-pronged agreement with SPR, which includes a working capital facility, the purchase of Vanchem and our 64% interest Mokopane, an equity subscription and a new sales and marketing arrangement has all helped infuse much-needed capital into the turnaround strategy that the Executive Management team have devised.

I would also like to particularly thank those shareholders who participated in the fundraising exercise we initiated at the end of 2023, which helped raise the funds to strengthen our working capital and invest in some of the maintenance projects required to support our assets. The Board and Executive Management team hope that all shareholders will increasingly see the potential of the business and provide the necessary support to re-rate the shares of the Company to a level that appropriately reflects its underlying value.

We would like to welcome Robbie Taylor who recently joined as Interim Chief Financial Officer replacing Tanya Chikanza. He brings with him over 27 years' experience as a Finance Executive in various sectors and has extensive experience working with listed entities and multinationals. Robbie and the Finance team have made significant strides in addressing capital allocation, creditor management, cost control and overall financial discipline.

The coming months will see a number of changes to your Board:

· David Noko is not standing for re-election at the AGM in order to permit him to focus on his many other commitments. He has served the Company assiduously, particularly in his role as Chair of the ESG Committee. He departs with our thanks and best wishes.

· Further, it is my intention to stand down from the Board and as Chairman once a replacement has been appointed. I have served for over six years and now is the time for a new Chair to lead the Board and the Company forward. The Company will shortly initiate a search process to identify a suitable candidate.

· Subject to completion of regulatory due diligence, replacing David Noko as a Non-Executive Director, Mathews Senosi has been invited to join the Board. We will welcome his involvement and look forward to benefitting from his significant sectoral experience.

The Bushveld Board stands resolutely in support of management's turnaround strategy and focus for 2024. This is to build on the progress made in the second half of 2023 to become a simple, fast and effective mining company. Continued improvement in operational performance, the disposal of the energy assets, and the further reduction of debt will facilitate a strengthening of our investment proposition during the course of the current financial year. A recovery in the price of vanadium will, of course, also be vital and most welcome.

In closing, I must recognise the commitment, support, and dedication of my Board colleagues who have been unstintingly generous with their time and have provided much wise counsel during this pivotal period in the Company's development. Collectively, we also recognise the huge effort of the Executive Management team under Craig's leadership for their steady hand and commitment to restoring Bushveld Minerals' intrinsic value for its shareholders.

Michael J. Kirkwood
Chairman
28 June 2024

Chief Executive Officer's Review

Refocusing our business objectives

DEAR STAKEHOLDERS,

I am pleased to be writing to you in my first letter as CEO of Bushveld Minerals.

I joined the Company at a critical juncture in its history, heavily beset as it was by a confluence of financial, operational and broader contextual challenges. While I have been at the helm for a relatively short time, just 11 months at the time of writing, I can report that the team has worked incredibly hard, under difficult circumstances, to turn this ship around.

In this, our priority has been the overhaul of Bushveld's strategy. We have moved away from the objective of vertical integration to refocus on the original fundamentals of the business as an efficient miner of vanadium that can deliver a sustained value to all stakeholders. Such has been the result of our hard work that, today, we present you with a pure-play, focused vanadium producer, capable of producing sustainable free cash flow within the right market conditions.

Of course, prior to my joining mid-year, on 1 July 2023, work refocusing our business objectives had already started on some of the issues facing the business. At an operational level, the load curtailment solution between Vanchem and the Emalahleni Municipality was agreed early in 2023 providing a far more stable, predictable power feed to the kiln. On the financial front, the initial Investment Committee approved the term sheet for the Orion loan restructuring which was announced in May 2023 with the deal finalised in February 2024; and while the proposed listing never crystallised for various reasons, there was an attempt to get the energy assets unbundled into their own listed vehicle.

This review focuses on the initiatives pursued, including the key transactions announced and hard operational and restructuring decisions taken in my first six months with the Company, and into the current financial year.

STABILISING THE BUSINESS

Within days of arriving at Bushveld, the uphill task we had ahead of us was quite clear. Beyond the long-term debt position with Orion that had become current, we also owed creditors large sums of money, the majority of the balance being long outstanding, and it was apparent that we had to reduce these creditor balances in order to improve the steady supply of raw materials that would in turn facilitate consistent output from both our production facilities. To do this, we had to bolster our cash balance and improve our working capital situation quickly, to ensure our credit period days were reduced and suppliers were more confident they would be paid timeously on supply of goods. A big contributor to achieving the funding boost, was the comprehensive proposed investment by Southern Point Resources ("SPR") announced in September 2023. There is no doubt that the immediate US$8.0 million (ZAR150.0 million) working capital loan under the SPR agreement provided an immediate boost to our bank balance and breathing room as we proceeded with the other transactions within the overall US$69.5-77.5 million funding package. In December 2023, we also successfully concluded the definitive agreements for the sale of 50% of Vanchem and our 64% interest in Mokopane for a total price of US$25 million. This transaction was altered in May 2024 to include 100% of our share in Vanchem. During the period, we also concluded a sales and marketing agreement with SPR, part of which will see them provide Bushveld with a provisional working capital facility of US$25-30 million, to replace our existing working capital facilities. We also pushed the button on a much-needed equity raising, which, including the previously agreed US$12.5 million injection from SPR, saw us raise a commitment of a total of US$18.4 million in fresh capital for the business of which US$14.9 million has been received. While there have been some post-year-end delays on the flow of some of these funds, we have made great strides with SPR in executing the various parts of our broad agreement and are continually engaging on the remaining transactions.

REFOCUSING OUR BUSINESS OBJECTIVE

From an operational perspective we identified that, in order to improve Vanchem's performance, it was vital we implement various initiatives during the month of July 2023 to get that facility into a sustainable positive cash flow position in the short term and achieve stable production levels of approximately 180 mtV per month. Initiatives pursued included: Changing the re-agent mix from 100% sodium sulphate to a mix of sodium carbonate and sodium sulphate, which reduces the silica build up at the kiln and hence increases the kiln availability. Deploy a team from Vametco to Vanchem to improve knowledge sharing.

• 24/7 shift managers for supervision to ensure immediate decision-making. Annual Report and Financial Results 2023

After familiarising myself with the business as a whole, I realised that there were several legacy and non-core assets that were using management time and Company funds to maintain and develop, while not contributing any near- to medium-term returns. Once identified, we initiated the process of disposing of those assets to focus on our main business, namely the production of vanadium.

Toughest of all the decisions was the one we had to make towards the end of the financial year where, having right-sized the business, and taken into account our financial constraints, we had no choice but to make redundant a number of our Group Head Office employees. The office restructuring will result in a cost saving of US$1.5 million per year. While it is never easy letting people go, we knew these measures were essential for navigating the current market conditions and ensuring the Company's continued competitiveness throughout the commodity cycle.

FINANCIALS

The 2023 financial results were affected by lower vanadium prices and higher operating costs which resulted in an underlying EBITDA¹ loss of US$7.5 million. We used cash generated from operating activities of US$6.2 million and ended the year with a cash and cash equivalent balance of US$1.3 million. At the beginning of 2024, the Company completed the refinancing of the unsecured convertible loan notes issued to Orion as follows:

• US$4.7 million of the convertible debt obligations capitalised into a subscription for 124,747,016 new ordinary shares.

• A new convertible loan note of US$14.1 million maturing on 30 June 2028.

• A term loan of US$28.3 million maturing on 30 June 2026.

• Supplemental royalty at not more than 0.264% of Bushveld's gross revenues and reducing by 80% at the term loan maturity.

The announcement of the 100% sale of Vanchem made post the financial year end, has provided working capital to fund ongoing operations and allows the Group to reduce its overdue creditor balance.

ASSET RATIONALISATION

In our efforts to reduce costs and simplify our business, the Company has also initiated processes on disposing of several of its assets.

Within the scope of the SPR transaction, the Company has conditionally sold Vanchem to SPR and our 64% interest in the Mokopane development project for US$40-45 million. Definitive agreements have been signed for both of these transactions and we await final conditions around regulatory approvals to be met. Advisors have also been hired to manage the sale process of CellCube and the Bushveld Electrolyte production plant.

We also reassessed the merits of pursuing the mining right application associated with the Brits Project, neighbouring Vametco, and concluded that it should be discontinued. Discussions over the disposal of Lemur, a thermal coal asset in Madagascar, are also underway.

OPERATIONS

It was clear early on in my tenure that while Vametco was largely reliable and in suitable operating condition (save for the Barren Dam constraints), it was Vanchem which required further improvements and consistency in order to stand on its own two feet.

After spending some time at the assets, I took the difficult decision to revise guidance to a realistic and achievable target of between 3,700 mtV and 3,900 mtV (previously between 4,200 mtV and 4,500 mtV). The good news is that the turnaround plan implemented and described above helped us achieve the targeted production rates, with Vanchem achieving its highest production level since the asset was acquired by Bushveld.

At Vanchem, we saw a significant improvement in our safety performance with a total recordable injury frequency rate of 2.31 (2022: 10.32). The improvement is a result of the implementation of a safety diagnostic assessment action plan, with special focus on the leading indicators, namely, visible felt leadership, planned task observations, inspections and addressing all the audit results.

OUTLOOK

Our immediate focus for the remainder of 2024 is to build on the aforementioned achievements. We aim to ensure that Vametco realises operational stability and achieves a sustainable monthly production of circa 240 mtV by Q4 2024. In addition to commencing with the project to buttress the slimes dam, increasing the capacity of the Barren Dam at Vametco remains an important debottlenecking project that needs to be resolved.

We will continue to reduce debt and implement cost saving measures in line with our asset rationalisation.

The low vanadium price has continued into 2024 with the commodity trading around US$26/kgV. As a Group, we will continue to prioritise sales into higher value markets, such as the aerospace application, speciality alloy and chemicals, and higher price markets, such as nitro vanadium in North America.

I must thank Orion, SPR and all other shareholders for their support through this difficult time. As mentioned at the start of this letter, we have taken big strides in focusing this business on the efficient production of vanadium for global markets.

I look forward to updating you on our progress to becoming a simple, fast and effective company during the course of the current financial year.

Craig Coltman
Chief Executive Officer

Chief Financial Officer's Review

1. OVERVIEW

	Unit	FY 2023	FY 2022
Revenue	US$m	137.5	148.4
Cost of sales	US$m	(122.1)	(108.3)
Other operating income and costs	US$m	(77.2)	(40.0)
Administrative costs	US$m	(20.8)	(20.3)
Adjusted EBITDA	US$m	(66.1)	(1.7)
Impairment charges	US$m	(58.6)	(24.0)
Underlying EBITDA	US$m	(7.5)	22.3
Average foreign exchange rate	US$/ZAR	18.46	16.35
Group production	mtv	3,714	3,842
Group sales	mtv	4,051	3,584
All-in sustaining costs ("AISC")	US$/kgV	51.0	43.7
Average realised price	US$/kgV	33.9	41.4

The 2023 financial results were affected by lower vanadium prices and higher operating costs to stabilise the assets. The operational initiatives to prioritise operational stability paid off with Vanchem achieving its highest yearly production since the asset was acquired by Bushveld. Our turnaround efforts, which resulted in us achieving this record production and stabilising the operation, allowed us to achieve meaningful value for this asset when an agreement was reached to sell 100% of Vanchem post financial year end.

In 2023, we recorded an underlying EBITDA loss of US$7.5 million and adjusted EBITDA loss of US$66.1 million. The operating loss also included impairment losses of US$58.6 million (2022: U$24.0 million). US$49.6 million of the impairment losses pertain to Mokopane and US$8.2 million to Vanchem. The refinancing of the Orion Mine Finance ("Orion") US$35 million convertible loan notes and capitalised interest into a revised capital structure was completed at the beginning of 2024. The Group also conducted, during the end of 2023, an equity raise and entered into agreements with Southern Point Resources ("SPR") for cumulative proposed investment of US$69.5 - US$77.5 million.

2. INCOME STATEMENT

Analysis of results

The income statement summary below is adjusted from the "statutory" primary statement presentation:

	Year ended		Year ended
In US$'000	31-Dec-23	% change	31-Dec-22
Revenue	137,471	-7%	148,448
Cost of sales excluding depreciation	(106,097)	18%	(90,268)
Other operating income and costs	(18,567)	16%	(15,985)
Other operating income	2,059	-25%	2,733
Selling and distribution costs	(8,825)	-5%	(9,270)
Other mine operating costs	(2,838)	4%	(2,723)
Idle plant costs	(8,963)	33%	(6,725)
Administration costs excluding depreciation	(20,266)	2%	(19,889)
Underlying EBITDA	(7,459)	-133%	22,306
Impairment losses	(58,637)	145%	(23,965)
Adjusted EBITDA	(66,096)	3884%	(1,659)
Depreciation	(16,491)	-11%	(18,475)
Operating loss	(82,587)	310%	(20,134)
Other losses	(3,378)	313%	(818)
Share of loss from joint venture	(4,242)	-17%	(5,112)
Fair value gain on derivative liability	32	-99%	2,934
Net financing expenses	(14,864)	9%	(13,654)
Loss before tax	(105,039)	186%	(36,784)
Income tax	(1,730)	-229%	1,345
Net loss for the year	(106,769)	201%	(35,439)

Revenue

	Year ended 31-Dec-23	Year ended 31-Dec-22
Group sales (mtV)	4,051	3,584
Average realised price (US$/kgV)	33.9	41.4
Revenue (US$'000)	137.5	148.4

Revenue of US$137.5 million for the Group was 7 percent lower than in the previous year, due to an 18 percent decrease in the average realised price to US$33.9/kgV, partially offset by a 13 percent increase in Group sales to 4,051 mtV.

The geographic split of Group sales in 2023 was 44 percent to the USA, 27 percent to Europe, nine percent to Asia, seven percent to South Africa, and 13 percent to the rest of the world. During the year we continued to prioritise sales into the higher value markets (aerospace application, speciality alloy and chemicals) and higher price markets (Nitro Vanadium in North America).

Cost analysis

	Year ended	Year ended
In US$'000	31-Dec-23	31-Dec-22
Cost of sales excluding depreciation	(106,097)	(90,268)
Other operating income and costs	(77,204)	(39,950)
Administration costs excluding depreciation	(20,266)	(19,889)
Total income statement operting cost excluding depreciation	(203,567)	(150,107)
Total units sold (mtV)	4,051	3,584
Cost per income statement per unit sold (excluding depreciation) (US$/kgV)	50.3	41.9
Sustaining capital	(3,202)	(6,589)
Total cost including sustaining capital	(206,769)	(156,696)
Cost per unit sold including sustaining capital (US$/kgV)	51.0	43.7

Cost of sales

The cost of sales, excluding depreciation, for the year was US$106.1 million, 18 percent higher than the prior year primarily due to higher costs at both Vametco and Vanchem. The cost increases included:

· Reduction in finished goods as the Group sold 340 mtV more than what was produced in the year;

· Increase in raw material prices from suppliers;

· Increase in energy and staff costs due to cost escalation;

· Increase in inventory write-downs at Vanchem which included a net realisable value write-down of US$1.8 million as well as a $1.8 million write-down of work-in-progress and raw materials; and

· These costs increases were partially offset by a decrease in the ZAR:USD exchange rate.

Other operating income and costs

Other operating income and costs increased to US$77.2 million primarily due to:

· A US$34.7 million increase in impairment losses to US$58.6 million. US$49.6 million of the impairment losses pertain to the Mokopane Project in order to reduce the carrying amount of the Project to the sales price agreed with SPR of US$3.7 million. US$8.2 million impairment loss was recognised for Vanchem to align the carrying amount with the agreed sales price for the initial 50% sale of Vanchem. After year-end, this transaction was altered to sell a 100% of our share in Vanchem. Following the closing of the sale, we will derecognise the assets and liabilities of Vanchem and any difference between the net assets and the consideration received will be recorded as a gain or loss on disposal.

· A $2.2 million increase in idle plant costs to US$9.0 million due to additional downtime at Vanchem and Vametco, partially offset by a decrease in the ZAR:USD exchange rate; and

· Selling and distribution costs decreased by US$0.4 million primarily due to lower commissions paid driven by lower average realised prices partially offset by higher distribution costs.

Cost per unit sold

The Group cost per unit sold for the year (including sustaining capital expenditure) was US$51.0/kgV. This represents a 17 percent increase relative to the prior year primarily as a result of the cost factors noted above, offset by higher sales volumes and a weaker ZAR:US$ exchange rate.

Administration costs

Administration costs, excluding depreciation charges for the year were US$20.3 million. Below is a breakdown of the key items included in administration costs:

	Year ended	Year ended
(In thousands US$)	31-Dec-23	31-Dec-22
Staff costs	9,048	9,327
Professional fees	7,051	6,007
Share-based payments	(254)	315
Other (including IT and security expenses)	4,421	4,240
	20,266	19,889

Professional fees increased by 17 percent to US$7.1 million primarily driven by higher legal fees and consulting fees incurred as a result of the agreements entered into by SPR and Orion.

Adjusted and underlying EBITDA

Adjusted EBITDA is a factor of volumes, prices and cost of production. This is a measure of the underlying profitability of the Group, which is widely used in the mining sector. Underlying EBITDA removes the effect of impairment charges.

	Year ended	Year ended
In US$'000	31-Dec-23	31-Dec-22
Revenue	137,471	148,448
Cost of sales	(122,068)	(108,304)
Other operating costs and income	(77,204)	(39,950)
Administration costs	(20,786)	(20,328)
Add: Depreciation	16,491	18,475
Adjusted EBITDA	(66,096)	(1,659)
Add: Impairment losses	58,637	23,965
Underlying EBITDA	(7,459)	22,306

The Group delivered an adjusted EBITDA loss of US$66.1 million, a US$64.4 million reduction compared 2022, primarily driven by impairment losses, lower realised prices and higher operating costs. The Group generated an underlying EBITDA loss of US$7.5 million, US$29.8 million less than 2022.

Net financing expenses

Net financing expenses were US$14.9 million, US$1.2 million higher than in the prior year. The increase was primarily due to interest on the Orion production facility agreement ("Orion PFA") and Orion convertible loan notes. Below is a breakdown of net financing expenses:

	Year ended	Year ended
(In thousands US$)	31-Dec-23	31-Dec-22
Finance income	(523)	(494)
Interest on borrowings	12,151	11,189
Unwinding of discount rate	1,873	1,726
Interest on lease liabilities	724	974
Other finance costs	639	259
	14,864	13,654

Interest on borrowings mainly reflected the finance costs on the Orion convertible loan notes of US$7.1 million (2022: US$6.4 million), interest on the Orion PFA of US$4.4 million (2022: US$4.4 million), and interest on interim working capital facility from SPR of US$0.4 million (2022: US$ nil).

Other non-cash costs

The share of loss from investments in joint ventures of US$4.2 million (2022: US$5.1 million) is the Group's share of the loss from its investment in VRFB-H.

Other losses of US$3.4 million include a write-down of the Mustang Energy Plc ("Mustang") convertible loan notes of US$1.7 million following the exercise of the backstop agreement, a write-down of $0.4 million on the conversion of the Mustang working capital loan as well as US$1.3 million of additional funding provided to Cellcube.

3. BALANCE SHEET

Assets

Intangible assets decreased compared to the previous year as the Mokopane intangible asset was impaired by US$49.6 million to reflect a recoverable amount of US$3.7 million. The Mokopane intangible asset was reclassified to asset held for sale as the sale was considered highly probably at year end.

Property, plant and equipment decreased by US$27.7 million due to depreciation of US$16.5 million, impairment losses of US$9.0 million and weaker ZAR:USD exchange rate, partially offset by capital expenditure of US$5.7 million.

Inventories decreased by US$12.7 million compared to the previous year primarily due to a decrease in finished goods as the Group sold more than what was produced, a decrease in the ZAR:USD exchange rate and an increase in the write-offs recorded partially offset by an increase in the weighted average production cost.

Trade and other receivables increased by US$15.5 million compared to the prior year primarily due to the recognition of subscription receivables of US$13.9 million which was received subsequent to year end.

The decrease in other financial assets is due to the write-down of the Mustang convertible loan notes following the exercise of the backstop agreement.

The decrease in cash and cash equivalents to US$1.3 million was primarily due to cash used from operations (US$6.2 million), capital expenditures incurred (US$5.7 million), repayment of finance costs and borrowings (US$5.5 million), partially offset by net proceeds received from the interim working capital facility (US$7.5 million) and net proceeds received from the equity raise (US$0.8 million).

Equity

The increase in share capital and share premium was due to the shares issued to the Mustang convertible loan note holders following the exercise of the backstop agreement, the shares issued in order to acquire the minority interest in Bushveld Vametco Holdings and the shares issued in the equity raise completed at the end of the year

Liabilities

Total borrowings (excluding lease liabilities) of US$98.58 million increased by US$15.5 million compared to the prior year due to the capitalisation of finance costs of US$12.7 million and additional funding provided of US$9.0 million, partially offset by the repayment of Orion PFA of US$3.9 million and repayment of Primorus convertible loan note of US$1.2 million.

The net debt reconciliation below outlines the Group's total debt and cash position:

	Year ended	Year ended
(In thousands US$)	31-Dec-23	31-Dec-22
Orion Production Financing Arrangement	(35,635)	(35,146)
Orion Convertible Loan Note	(46,766)	(39,742)
Industrial Development Corporation Loans	(6,238)	(5,480)
SPR interim working capital facility	(7,812)	-
Other	(2,124)	(2,762)
Lease liabilities	(8,428)	(7,283)
Total debt	(107,003)	(90,413)
Cash and cash equivalents	1,281	10,874
Net debt	(105,722)	(79,539)

Net debt increased by US$26.2 million compared to the prior year due to capitalised interest of US$7.1 million on the Orion convertible loan notes, the SPR interim working capital of US$7.8 million and an increase in lease liabilities of US$1.1 million and the decrease in the cash and cash equivalents balance of US$9.6 million.

We completed the refinancing of the unsecured Orion convertible loan notes at the beginning of 2024 as follows:

· US$4.7 million of the convertible debt obligation capitalised into a subscription for 124,747,016 new ordinary shares;

· A new convertible loan note of US$14.1 million maturity on 30 June 2028;

· A term loan of US$28.3 million maturity on 30 June 2026; and

· Supplemental royalty not more than 0.264% of Bushveld's gross revenues reducing by 80% at the term loan maturity.

4. CASH FLOW STATEMENT

The table below summarises the main components of cash flow during the year:

	Year ended	Year ended
(In thousands US$)	31-Dec-23	31-Dec-22
Operating loss	(82,587)	(20,134)
Impairment losses	58,637	23,965
Depreciation	16,491	18,475
Other non-cash items	(3,213)	(6,629)
Changes in working capital and provisions	7,151	6,154
Taxes paid	(2,705)	(648)
Cash inflow/(outflow) from operations	(6,226)	21,183
Sustaining capital expenditures	(3,202)	(6,589)
Free cash flow	(9,428)	14,594
Cash used in other investing activities	(2,478)	(13,000)
Cash generated from / (used in) financing activities	2,941	(5,346)
Cash outflow	(8,965)	(3,752)
Opening cash and cash equivalents	10,874	15,433
Foreign exchange movement	(628)	(807)
Closing cash and cash equivalents	1,281	10,874

Operating activities

The Group used cash from operating activities of US$6.2 million, compared to cash generated from operations of US$21.2 million in the prior year. The change is primarily drive by the decrease in adjusted EBITDA.

Investing activities

Cash used in investing activities (including sustaining capital expenditure) of US$6.3 million was primarily driven by capital expenditure on property, plant and equipment of US$5.7 million.

Capital Expenditure (US$' million)

	Year ended	Year ended
In millions US$	31-Dec-23	31-Dec-22
Vametco	2.4	6.5
Growth	-	-
Sustaining	2.4	6.5
Vanchem	0.9	4.5
Growth		4.4
Sustaining	0.9	0.1
Bushveld Energy	2.4	7.1
Growth	2.4	7.1

Total capital expenditures	5.7	18.2

Financing activities

Cash generated from financing activities of US$2.9 million comprised of the US$9.0 million proceeds received from borrowings mainly from the interim working capital facility and the net proceeds of US$0.8 million received from the equity raise, partially offset by the repayment of Orion PFA of US$3.9 million, repayment of Primorus convertible loan note of US$1.2 million, the repayment of lease liabilities of US$0.7 million and the amount paid in cash to acquire the minority interest in Bushveld Vametco Holdings of US$0.6 million.

5. FINANCIAL RISK

The primary financial risks faced by the Group relate to the availability of funds to meet business needs due to the historically low vanadium prices (liquidity risk), the risk of default by counterparties to financial transactions (credit risk), fluctuations in interest and foreign exchange rates, and commodity prices (market risk). These factors are more fully outlined in the notes to the consolidated financial statements. They are important aspects to consider when addressing the Group's going concern status. We proactively manage the risks within our control.

There are, however, factors outside the control of management. These are volatility in the ZAR:US$ exchange rate, as well as the vanadium price, which have a significant impact on the cash flows of the business. We have a hedging policy and assess the potential to implement a strategy to address the fluctuations in the ZAR:US$ exchange rate when we attain steady state production at our operations.

6. GOING CONCERN AND OUTLOOK

We closely monitor and manage liquidity risk by ensuring that the Group has sufficient funds for all ongoing operations. As part of the annual budgeting and long-term planning process, the Directors reviewed the approved Group budget and cashflow forecast through to 30 June 2025. The current cashflow forecast has been amended in line with any material changes identified during the year. Equally, where funding requirements are identified from the cashflow forecast, appropriate measures are taken to ensure these requirements can be satisfied.

We have performed an assessment of whether the Group would be able to continue as a going concern for at least twelve months from the date of the annual consolidated financial statement. We took into account the financial position, expected future performance of the operations, the debt facilities and debt service requirements, the working capital requirements, capital expenditure commitments and forecasts, expected proceeds from the sale of Vanchem and Mokopane and outstanding equity proceeds. Additionally, we factored in the favourable relationship with Orion, demonstrated by the restructuring of agreements to accommodate market conditions and constructive engagement in relevant matters.

The Group's ability to continue as a going concern is dependent on its ability to complete the sale of Vanchem and Mokopane and the timing of those sales proceeds, complete the refinance of the Orion senior term loan and the timing of receiving the additional funding, the continuing support of Orion, and achieving the planned production levels at the estimated average sales prices. These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern.

The consolidated financial statements for the year ended 31 December 2023 have been prepared on a going concern basis as, in the opinion of the Directors, the Group will be in a position to continue to meet its operating and capital costs requirements and pay its debts as and when they fall due for at least twelve months from the date of this report. The going concern note included in the accounting policies provides further information.

Robbie Taylor

Interim Chief Financial Officer

28 June 2024

1. Adjusted EBITDA is EBITDA excluding the Group's share of losses from joint ventures, fair value gain on derivative liability and other losses.

2. Underlying EBITDA is Adjusted EBITDA excluding impairment losses.

3. Other operating costs and income include other operating income, impairment losses, selling and distribution costs, other mine operating costs and idle plant costs.

4. Finance income less finance costs.

Consolidated Statement of Profit or Loss

Figures in thousands of US$	Notes	2023	2022
Revenue	5	137,471	148,448
Cost of sales		(122,068)	(108,304)
Gross profit		15,403	40,144
Other operating income		2,059	2,733
Impairment losses	13, 14	(58,637)	(23,965)
Selling and distribution costs		(8,825)	(9,270)
Other mine operating costs		(2,838)	(2,723)
Idle plant costs		(8,963)	(6,725)
Administration expenses	7	(20,786)	(20,328)
Operating loss		(82,587)	(20,134)
Finance income	8	523	494
Finance costs	9	(15,387)	(14,148)
Other losses	10	(3,378)	(818)
Fair value gain on derivative liability	28	32	2,934
Share of loss from investments in associate and joint venture	18	(4,242)	(5,112)
Loss before taxation		(105,039)	(36,784)
Taxation	11	(1,730)	1,345
Loss for the year		(106,769)	(35,439)
Loss attributable to
Owners of the parent		(103,927)	(38,968)
Non-controlling interest		(2,842)	3,529
		(106,769)	(35,439)
Loss per ordinary share
Basic loss per share (cents)	12	(7.43)	(3.07)
Diluted loss per share (cents)	12	(7.43)	(3.07)

Consolidated Statement of Comprehensive Loss

Figures in thousands of US$	Notes	2023	2022
Loss for the year Consolidated other comprehensive income/(loss) Items that will not be reclassified to profit or loss		(106,769)	(35,439)
Other fair value movements		15	140
Items that may be reclassified to profit or loss
Currency translation differences		(12,673)	(15,712)
Other comprehensive loss for the year net of taxation		(12,658)	(15,572)
Total comprehensive loss		(119,427)	(51,011)
Total comprehensive loss attributable to
Equity holders		(115,732)	(53,323)
Non-controlling interest		(3,695)	2,312
		(119,427)	(51,011)

Consolidated Statement of Financial Position

Figures in thousands of US$	Notes	2023	2022
Assets Non-current assets
Intangible assets	13	-	53,469
Property, plant and equipment	14	99,744	127,409
Investment property	15	2,173	2,412
Deferred tax asset	16	464	-
Investments in associate and joint venture	18	2,360	3,151
Restricted investment	21	2,881	2,710
Total non-current assets		107,622	189,151
Current assets
Inventories	19	42,273	54,990
Trade and other receivables	20	25,018	9,498
Other financial assets	17	24	3,075
Cash and cash equivalents	22	1,281	10,874
		68,596	78,437
Asset held for sale	13	3,700	-
Total current assets		72,296	78,437
Total assets		179,918	267,588
Equity and liabilities
Share capital	23	26,944	17,122
Share premium	23	140,272	127,702
Accumulated loss	23	(118,006)	(39,147)
Share-based payment reserve	24	261	515
Foreign currency translation reserve	23	(47,166)	(35,346)
Fair value reserve	23	(1,783)	(1,798)
Attributable to equity holders		522	69,048
Non-controlling interest		288	36,583
Total equity		810	105,631
Liabilities Non-current liabilities
Post-retirement medical liability	25	1,577	1,675
Environmental rehabilitation liabilities	26	16,633	16,610
Deferred consideration	27	306	1,527
Borrowings	28	38,008	35,272
Lease liabilities	29	7,746	6,721
Deferred tax liability	16	-	1,191
Total non-current liabilities		64,270	62,996
Current liabilities Trade and other payables	30	46,295	45,896
Provisions	31	1,944	1,714
Borrowings	28	60,567	47,858
Lease liabilities	29	682	561
Deferred consideration	27	2,304	901
Current tax payable		3,046	2,031
Total current liabilities		114,838	98,961
Total liabilities		179,108	161,957
Total equity and liabilities		179,918	267,588

Consolidated Statement of Changes in Equity

			Foreign				Total attributable
	Share	Share	currency translation	Share-based payment	Fair value	Accumulated	to equity holders of	Non- controlling	Total
Figures in thousands of US$	capital	premium	reserve	reserve	reserve	loss	the Group	interest	equity
Balance at 1 January 2022	16,797	125,551	(20,851)	-	(1,938)	(179)	119,380	32,482	151,862
Loss for the year Other comprehensive income,	-	-	-	-	-	(38,968)	(38,968)	3,529	(35,439)
net of tax: Currency translation differences	-	-	(14,495)	-	-	-	(14,495)	(1,217)	(15,712)
Other fair value movements	-	-	-	-	140	-	140	-	140
Total comprehensive loss for the year	-	-	(14,495)	-	140	(38,968)	(53,323)	2,312	(51,011)
Transaction with owners: Issue of shares	325	2,151	-	-	-	-	2,476	-	2,476
Share-based payment Contribution from non-controlling	-	-	-	515	-	-	515	-	515
interest (note 28)	-	-	-	-	-	-	-	1,789	1,789
Balance at 1 January 2023	17,122	127,702	(35,346)	515	(1,798)	(39,147)	69,048	36,583	105,631
Loss for the year Other comprehensive income,	-	-	-	-	-	(103,927)	(103,927)	(2,842)	(106,769)
net of tax: Currency translation differences	-	-	(11,820)	-	-	-	(11,820)	(853)	(12,673)
Other fair value movements	-	-	-	-	15	-	15	-	15
Total comprehensive loss for the year	-	-	(11,820)	-	15	(103,927)	(115,732)	(3,695)	(119,427)
Transaction with owners: Issue of shares	6,874	9,977	-	-	-	-	16,851	-	16,851
Share issue costs		(945)					(945)		(945)
Share-based payment Acquisition of non-controlling	-	-	-	(254)	-	-	(254)	-	(254)
interest Contribution from non-controlling	2,948	3,538	-	-	-	25,068	31,554	(33,036)	(1,482)
interest (note 28)	-	-	-	-	-	-	-	436	436
Balance at 31 December 2023	26,944	140,272	(47,166)	261	(1,783)	(118,006)	522	288	810

Consolidated Statement of Cash Flows

Figures in thousands of US$	Notes	2023	2022
Cash flows from operating activities Loss before taxation		(105,039)	(36,784)
Adjustments for:
Depreciation property, plant and equipment (including right-of-use assets)	14	16,491	18,475
Share of loss from investments in associate and joint venture	18	4,242	5,112
Fair value gain on derivative liability	28	(32)	(2,934)
Finance income	8	(523)	(494)
Finance costs	9	15,387	14,148
Impairment losses	13, 14	58,637	23,965
Loss on financial instruments and conversion of loan		2,052	-
Other non-cash movements		2,415	1,138
Foreign exchange differences		(4,302)	(6,949)
Changes in working capital		7,151	6,154
Income taxes paid		(2,705)	(648)
Net cash generated from/(used in) operating activities		(6,226)	21,183
Cash flows from investing activities Finance income		367	336
Purchase of property, plant and equipment		(5,725)	(18,197)
Purchase of investments	18	-	(1,211)
Purchase of exploration and evaluation assets	13	(322)	(517)
Net cash used in investing activities		(5,680)	(19,589)
Cash flows from financing activities Repayment of borrowings	28	(2,232)	(5,623)
Proceeds from borrowings	28	8,990	4,222
Finance costs	28	(3,265)	(3,217)
Lease payments	29	(703)	(728)
Purchase of non-controlling interest	23	(643)	-
Equity proceeds (net)	23	794	-
Net cash generated from/(used in) financing activities		2,941	(5,346)
Total cash and cash equivalents movement for the year		(8,965)	(3,752)
Cash and cash equivalents at the beginning of the year		10,874	15,433
Effect of translation of foreign exchange rates		(628)	(807)
Total cash and cash equivalents at end of the year	22	1,281	10,874

From Note 3 of the Accounts

3. Significant accounting policies

The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The preliminary announcement does not constitute financial statements for the years ended 31 December 2023 and 31 December 2022.

The financial information for the year ended 31 December 2023 has been extracted from the Group's audited financial statements which were approved by the Board of Directors on 28 June 2024. The report of the auditor on the 31 December 2023 financial statements was unqualified but contained a material uncertainty paragraph relating to going concern.

Going concern

The consolidated financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

The Group recorded a net loss after tax of US$106.77 million for the year ended 31 December 2023 of which US$58.64 million related to

impairment losses (31 December 2022: US$23.97 million). As at 31 December 2023 the Group had cash and cash equivalents of US$1.28 million (31 December 2022: US$10.87 million) and total borrowings of US$98.58 million (31 December 2021: US$83.13 million).

The Directors closely monitor and manage the liquidity risk of the Group by ensuring that the Group has sufficient funds for all ongoing operations. As part of the annual budgeting and long-term planning process, the Directors reviewed the approved Group budget and cashflow forecast through to 30 June 2025. The current cashflow forecast has been amended in line with any material changes identified during the year. Equally, where funding requirements are identified from the cashflow forecast, appropriate measures are taken to ensure these requirements can be met.

The Group has entered into a revised sales agreement with SPR, which was approved by the shareholders, whereby the Group will sell 100% of Vanchem. The closing of the Vanchem sale remains conditional upon approval by the Competition Tribunal. The Group also entered into revised agreements with Orion whereby the Group will receive additional funding of up to US$10 million under the senior term loan facility and the repayment of interest and capital are extended to 31 December 2025. The drawdown of the additional facility is subject to SARB approval.

The Directors have performed an assessment of whether the Group would be able to continue as a going concern for at least twelve months from the date of annual consolidated financial statement. In their assessment, the Group has taken into account its financial position, expected future performance of its operations, its debt facilities and debt service requirements, its working capital requirements, capital expenditure commitments and forecasts, expected proceeds from the sale of Vanchem and Mokopane and outstanding equity proceeds. Additionally the Directors factored in the favourable relationship with Orion, demonstrated by the restructuring of agreements to accommodate market conditions and constructive engagement in relevant matters.

The cashflow forecast for Vametco takes into consideration production levels achieved to date, annual planned maintenance shutdowns are undertaken, and these shutdowns proceed in line with the planned timetable and no unplanned shutdowns are experienced during the going concern period.

With regards to pricing, the short to medium term assumptions, which are based on external forecasts, are that the average price achieved by the Group will be US$27.73/kgV through to 31 December 2024 and an average of US$34.40/kgV throughout 2025. The year-to-date average price achieved by the Group was circa US$26/kgV.

These conditions indicate the existence of material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern. The consolidated financial statements for the year ended 31 December 2023 have been prepared on a going concern basis as, in the

opinion of the Directors, the Group will be in a position to continue to meet its operating and capital costs requirements and pay its debts as and when they fall due for at least twelve months from the date of this report.

Accordingly, these consolidated financial statements do not include adjustments to the recoverability and classification of recorded assets and liabilities and related expenses that might be necessary should the Group be unable to continue as a going concern.

Basis of consolidation

The consolidated financial statements present the consolidated statement of financial position and changes therein, consolidated statement of profit or loss, consolidated statement of comprehensive loss and consolidated statement of cash flows for the Group. Where necessary, adjustments are made to the results of subsidiaries and equity accounted investments to ensure the consistency of their accounting policies with those used by the Group. Intercompany transactions, balances and unrealised profits and losses between Group companies are eliminated on consolidation.

Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Where the Group's interest in a subsidiary is less than 100%, the Group recognises a non-controlling interest.

Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Associates and joint ventures

An associate is an entity over which the Group has significant influence but neither control nor joint control. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Investments in associates and joint ventures are accounted for using the equity method. Under the equity method, the share of the profits or losses of the associate and joint

venture is recognised in profit or loss and the share of the movements in other comprehensive income is recognised in other comprehensive

income. Investments in associates and joint ventures are carried in the statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net assets of the associate and joint venture. Goodwill relating to the associate and joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Income earned from associate or joint venture entities reduces the carrying amount of the investment.

Non-controlling interests

Non-controlling interests in subsidiaries are identified separately from the Group's shareholders therein. Those interests of non-controlling

shareholders that present ownership interests entitling their holders to a proportionate share of the net assets upon liquidation are initially

measured at fair value. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial

recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to

non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Black Economic Empowerment ("BEE") interests are accounted for as non-controlling interests on the basis that the Group does not control these entities. The Company acquired the 26% interest in Bushveld Vametco Holdings on 20 December 2023 (see note 23).

Business combinations

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.

If the business combination is achieved in stages, the acquisition date carrying value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date; any gains or losses arising from such remeasurement are recognised in profit or loss.

Subsequent transactions that do not result in the obtaining of control are accounted for as equity transactions as follows:

· The carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.

· Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid is recognised directly in equity and attributed to the owners of the parent.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair

value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in profit or loss. Contingent consideration that is classified as equity is not remeasured and its subsequent settlement is accounted for within equity.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker ("CODM").

The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer and the Executive Committee. Operating segments whose revenues, net earnings or losses or assets exceed 10% of the total consolidated revenues, net earnings or losses or assets, are reportable segments. In order to determine the reportable operating segments, various factors are considered, including geographical location and managerial structure.

Functional and presentational currency

The functional currency of each entity in the Group is determined as the currency of the primary economic environment in which it operates. For the purpose of the consolidated financial statements, the results and financial position of each entity within the Group are expressed in US Dollars, which is the presentation currency for the consolidated financial statements.

Transactions denominated in foreign currencies are translated into the entity's functional currency as follows:

· Monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date;

· Non-monetary assets and liabilities are translated at historical exchange rates prevailing at each transaction date;

· Deferred tax assets and liabilities are translated at the exchange rate in effect at the balance sheet date with translation gains and losses recorded in income tax expense; and

· Revenues and expenses are translated at the average exchange rates throughout the reporting period, except depreciation, which is translated at the rates of exchange applicable to the related assets, and share-based compensation expense, which is translated at the rates of exchange applicable at the date of grant of the share-based compensation.

Exchange gains or losses on translation of transactions are included in the consolidated statement of profit or loss. The results and financial position of all entities within the Group that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

· Assets and liabilities for each statement of financial position presented are translated at the closing rate;

· Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

· All resulting exchange differences are recognised in other comprehensive income and accumulated in foreign currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and

translated at the closing rate.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign currency translation reserve relating to that entity up to the date of disposal are transferred to the consolidated statement of profit or loss as part of the profit or loss on disposal.

Revenue recognition - sale of goods

IFRS 15 requires revenue from contracts with customers to be recognised when the separate performance obligations are satisfied, which is when control of promised goods or services are transferred to the customer.

The Group satisfies a performance obligation by transferring control of the promised goods or services to the customer on delivery of the goods. The Group recognises revenue at the amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer. Revenue with contract customers is generated from sale of goods and is recognised upon transferring control of the goods to the customer, at a point in time, and comprises the invoiced amount of goods to customers, net of value added tax.

Cost of sales

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is

recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period in which the write-down or loss occurs.

Share-based payments

The fair value of bonus shares granted to employees for nil consideration under the short-term incentive ("STI") scheme is recognised as an

expense over the relevant service period, being the year to which the bonus relates and the vesting period of the shares. The fair value is measured at the grant date of the shares and is recognised in equity in the share-based payment reserve. The number of shares expected to vest is estimated based on the non-market vesting conditions. Where shares are forfeited due to a failure by the employee to satisfy the service conditions, any expenses previously recognised in relation to such shares are reversed effective from the date of the forfeiture.

The fair value of the performance shares issued under the long-term incentive scheme ("LTI") is recognised as an expense over the vesting period. Non-vesting conditions and market vesting conditions are factored into the fair value of the performance shares granted. An option pricing model is used to measure the fair value of the performance shares.

Finance income

Interest income is recognised when it is probable that economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

Current and deferred income tax

The tax expense represents the sum of the tax currently payable and deferred income tax.

The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the reporting date in the countries in which the Group's subsidiaries operate and generate taxable income.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the "balance sheet liability" method.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled based upon rates enacted and substantively enacted at the reporting date. Deferred tax is charged or credited to profit or loss, except when it relates to items credited or charged to other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

Assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying value will be recovered principally through a sale transaction rather than through continuing use. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset or disposal group and the sale expected to be completed within one year from the date of the classification.

Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs of disposal ("FVLCD"). If the FVLCD is lower than the carrying amount, an impairment loss is recognised in the consolidated statement of profit or loss. Non-current assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of financial position.

Intangible exploration and evaluation assets

All costs associated with mineral exploration and evaluation including the costs of acquiring prospecting licences; mineral production licences and annual licences fees; rights to explore; topographical, geological, geochemical and geophysical studies; exploratory drilling; trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource, are capitalised as intangible exploration and evaluation assets and subsequently measured at cost.

If an exploration project is successful, the related expenditures will be transferred at cost to property, plant and equipment and amortised over the estimated life of the commercial ore reserves on a unit of production basis (with this charge being taken through profit or loss). Where a project does not lead to the discovery of commercially viable quantities of mineral resources and is relinquished, abandoned, or is considered to be of no further commercial value to the Group, the related costs are recognised as an impairment loss in the consolidated statement of profit or loss.

The recoverability of capitalised exploration costs is dependent upon the discovery of economically viable ore reserves, the ability of the Group to obtain necessary financing to complete the development of ore reserves and future profitable production or proceeds from the extraction or disposal thereof.

Impairment of exploration and evaluation assets

Whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the asset is reviewed for

impairment. Assets are also reviewed for impairment at each reporting date in accordance with IFRS 6. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less costs of disposal and value in use) if that is less than the asset's carrying value. Impairment losses are recognised in the consolidated statement of profit or loss.

An impairment review is undertaken when indicators of impairment arise but typically when one of the following circumstances applies:

· Unexpected geological occurrences that render the resources uneconomic; or

· Title to the asset is compromised; or

· Variations in mineral prices that render the project uneconomic; or

· Variations in the foreign currency rates; or

· The Group determines that it no longer wishes to continue to evaluate or develop the field.

Property, plant and equipment (excluding right-of-use assets)

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, except for investment properties which are carried at fair value. Cost comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs directly attributable to making the asset capable of operating as intended.

Depreciation on assets commences when they are available for use by the Group. Depreciation for property, plant and equipment is charged on a systematic basis over the estimated useful lives of the assets after deducting the estimated residual value of the assets, using the straight-line method.

The depreciation method applied, the estimated useful lives of assets and their residual values are reviewed at least at each financial year end, with any changes accounted for as a change in accounting estimate to be applied prospectively. The depreciation charge for each period is recognised in the consolidated statement of profit or loss.

The useful life of an asset is the period of time over which the asset is expected to be used. The estimated useful lives of items of property, plant and equipment are as follows:

· Buildings and other improvements 20-25 years

· Plant and machinery 5-20 years

· Motor vehicles, furniture and equipment 3-10 years

· Decommissioning asset Life-of-mine

· Waste stripping asset 21 months

Assets under construction are not depreciated.

Repairs and maintenance expenditure is generally charged in profit and loss during the financial period in which it is incurred. However renovations are capitalised and included in the carrying amount of the asset when it is probable that future economic benefits will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.

An item of property, plant and equipment is derecognised upon disposal or when no future benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the consolidated statement of profit or loss in the year the asset is derecognised.

Impairment losses

At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit ("CGU") to which the asset belongs.

In assessing whether an impairment is required, the carrying value of the asset or CGU is compared with its recoverable amount. The recoverable amount is the higher of the CGU's fair value less costs of disposal ("FVLCD") and value in use ("VIU"). In the absence of market-related information or similar transactions, the FVLCD is estimated based on discounted future estimated cash flows (expressed in real terms) expected to be generated from the continued use of the CGU using market-based commodity price and exchange assumptions, estimated quantities of recoverable minerals, production levels, operating costs and capital requirements, including any expansion projects, and its eventual disposal, based on the latest life-of-mine ("LOM") plans. These cash flows were discounted using a real post-tax discount rate that reflected current market assessments of the time value of money and the risks specific to the CGU.

Estimates of quantities of recoverable minerals, production levels, operating costs and capital requirements are sourced from the planning

process, including the LOM plans, two-year budgets and CGU-specific studies.

Investment property

Investment property is initially measured at cost and subsequently at fair value with any change therein recognised in the consolidated statement of profit or loss. Any gain or loss on disposal of investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the consolidated statement of profit or loss.

Inventories

Inventories are valued at the lower of cost or estimated net realisable value. Cost is determined on the following basis:

· Raw materials weighted average cost

· Consumable stores weighted average cost

· Work in progress weighted average cost

· Finished product weighted average cost

Work in progress and finished goods are measured at the lower of weighted average production cost and net realisable value. Raw materials and consumables are measured at the lower of average purchase cost and net realisable value.

Production costs include cost of raw materials, direct labour, other direct costs and related production overheads, but exclude borrowing costs. Production overheads are allocated to inventory based on the normal operating capacity of the production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated selling expenses. Any write-down to net realisable value is recognised as an expense in the period in which the write-down occurs. Any reversal is recognised in the consolidated statement of profit or loss in the period in which the reversal occurs. Provision is made, if necessary, for slow-moving, obsolete or defective inventory.

Financial assets and liabilities

Financial assets and financial liabilities are recognised in the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are classified into specified categories dependent upon the nature and purpose of the instruments at the time of initial recognition

Financial assets

Measurement

At initial recognition, the Group measures all financial assets at fair value plus, in the case of a financial asset not at fair value through profit or loss ("FVTPL"), transaction costs. Transaction costs of financial assets carried at FVTPL are expensed in the consolidated statement of profit or loss.

Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value though other comprehensive income ("FVOCI") or FVTPL. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them.

Debt instruments

In order for a financial asset to be classified and measured at amortised cost or FVOCI, it needs to give rise to cash flows that are 'solely payments of principal and interest' ("SPPI") on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Financial assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is

subsequently measured at FVTPL is recognised in the consolidated statement of profit or loss and presented net within other income/(expenses) in the period in which it arises.

Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group's management has elected to present fair value gains and losses on equity investments in other comprehensive income ("OCI") (however, the cumulative gain/loss on disposal is represented within equity), there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group's right to receive payments is established.

Changes in the fair value of financial assets at FVTPL are recognised in other income/(expenses) in the consolidated statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Trade and other receivables

Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, then they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less any allowance for expected credit losses.

To determine the expected credit loss allowance for trade receivables, the Group applies the simplified approach permitted by IFRS 9, which

requires expected lifetime losses to be recognised from initial recognition of the receivables, see note 33.6 for further details.

Other receivables consist of prepayments and deposits, which are initially recognised as non-financial assets and realised over time.

Restricted investment

Restricted investment comprises of an investment in an insurance fund. These funds are dedicated towards future rehabilitation expenditure

on the mine property. This is classified as a financial asset and measured at amortised costs.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments

with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial liabilities

Accounts payable, accrued liabilities and borrowings are accounted for at amortised cost, using the effective interest rate method.

Convertible loan

Interest-bearing loans are recorded initially at their fair value, net of direct transaction costs. Such instruments are subsequently carried at their amortised cost and finance charges, including premiums payable on settlement, redemption or conversion, are recognised in profit or loss over the term of the instrument using the effective rate of interest.

Instruments where the holder has the option to redeem for cash or convert into a pre-determined quantity of equity shares are classified as compound instruments and presented partly as a liability and partly as equity.

Instruments where the holder has the option to redeem for cash or convert into a variable quantity of equity shares are classified separately as a loan and a derivative liability.

Where conversion results in a fixed number of equity shares, the fair value of the liability component at the date of issue is estimated using the prevailing market interest rate for a similar non-convertible instrument. The difference between the proceeds of issue and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the Group, is included in equity.

Where conversion is likely to result in a variable quantity of equity shares the related derivative liability is valued and included in liabilities.

The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar non-convertible debt

to the instrument. The difference between this amount and the interest paid is added to the carrying value of the convertible loan note.

Derivative liabilities are revalued at fair value at the reporting date, and changes in the valuation amounts are credited or charged to the profit or loss.

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost.

Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.

Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

Borrowing costs are capitalised and allocated specifically to qualifying assets when funds have been borrowed, either to specifically finance a project or for general borrowings during the period of construction. Qualifying assets are defined as assets that require more than a year to be brought to the location and condition intended by management. Capitalisation of borrowing costs ceases when such assets are ready for their intended use.

Leases

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a

corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The discount rate used ranges between 10% to 11% depending on the nature of the underlying asset.

Lease payments included in the measurement of the lease liability comprise:

· fixed lease payments (including in-substance fixed payments), less any lease incentives;

· variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

· the amount expected to be payable by the lessee under residual value guarantees;

· the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

· payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

· The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

· The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

· A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The Group did not make any such adjustments during the periods presented.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs.

They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. The costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of profit or loss, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.

Where discounting is used the increase in the provision due to the passage of time is recognised as a finance cost.

I. Environmental rehabilitation liabilities

The Group is exposed to environmental liabilities relating to its operations. Full provision for the cost of environmental and other remedial work such as reclamation costs, close down and restoration costs, and pollution control is made based on the estimated cost as per the Environmental Management Programme Report. Annual increases in the provisions relating to change in the net present value of the provision are shown in the consolidated statement of profit or loss as a finance cost. Changes in estimates of the provision are accounted for in the year the change in estimate occurs, and is charged to either the consolidated statement of profit or loss or the decommissioning asset in property, plant and equipment, depending on the nature of the liability.

II. Post-retirement medical liability

The liability in respect of the defined benefit medical plan is the present value of the defined benefit obligation at the reporting date together with adjustments for actuarial gains/losses. Any actuarial gains or losses are accounted for in other comprehensive income. The defined benefit obligation is calculated annually by independent actuaries using the projected unit of credit method.

III. Provident fund contributions

The Group's contributions to the defined contribution plan are charged to profit and loss in the year to which they relate.

Use of estimates and judgements

The preparation of consolidated financial statements in conformity with the UK-adopted International Accounting Standards requires management to make judgements, estimates and assumptions that affect the reported amount of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Assumptions about the future and other major sources of estimation uncertainty at the end of the reporting period have a significant risk of

resulting in a material adjustment to the carrying amounts of assets and liabilities, within the next financial year. The most significant judgements and sources of estimation uncertainty that the Group believes could have a significant impact on the amounts recognised in its consolidated financial statements are described below.

I. Impairment of non-current assets

Judgements made in relation to accounting policies

Both internal and external sources of information are required to be considered when determining the presence of an impairment indicator or

an indicator of reversal of a previous impairment. Judgement is required around significant adverse changes in the business climate which may be indicators of impairment such as a significant decline in the asset's market value, decline in resources and/or reserves including as a result of geological reassessment or change in timing of extraction of resources and/or reserves which would result in a change in the discounted cash flow, and lower commodity prices or higher input cost prices than would have been expected since the most recent valuation. Judgement is also required when considering whether significant positive changes in any of these items indicate a previous impairment may have reversed.

Key sources of estimation uncertainty

If an indication of impairment or reversal of a previous impairment charge exists an estimate of a CGU's recoverable amount is calculated. The recoverable amount is based on the higher of FVLCD and VIU using a discounted cash flow methodology taking into account assumptions that would be made by market participants, unless there is a market price available based on a recent purchase or sale.

If the recoverable amount is based using a discounted cash flow methodology, expected future cash flows used are inherently uncertain and could materially change over time and impact the recoverable amounts. The cash flows and recoverable amount are significantly affected by a number of factors including published reserves, resources, exploration potential and production estimates, together with economic factors such as spot and future commodity prices, discount rates, foreign currency exchange rates, estimates of costs to produce products, and future capital expenditure.

The Group entered into sales agreements with Southern Point Resources ("SPR") to sell 50% of Bushveld Vanchem ("Vanchem") for a consideration of between US$20.0 million and US$21.3 million and to sell its interest in the Mokopane Project for a consideration of US$3.7 million. The sales price for Vanchem is dependent on if the Mokopane sale close within one year following the closing of the Vanchem sale. As the completion of either sale is not dependent upon the other, the directors are satisfied that the consideration for each reflects the fair value. The directors determined that the premium paid on the equity subscription price did not represent additional consideration for the disposal of Vanchem or Mokopane as the price payable was equivalent to other investors.

The recoverable amount of Vanchem CGU was based on the minimum sales price offered of US$20.0 million as the increase in the sales price to US$21.3 million is dependent on the closing of Mokopane which does not form part of the Vanchem CGU. An impairment loss of US$8.22 million was recognised in the consolidated statement of profit and loss to align the carrying value of the CGU with the recoverable amount of US$39.75 million, which is US$40.0 million less cost of disposal of US$0.25 million (see note 14). The directors have determined that the agreement to dispose of the remaining 50% of Vanchem (see note 36) for an undiscounted sales price of between US$15-20 million does not alter this valuation as it is considered a non-adjusting subsequent event.

The recoverable amount of the Mokopane Project was based on the sales price offered of US$3.7 million (see note 13). An impairment loss of

US$49.62 million was recognised in the consolidated statement of profit or loss to align the carrying value with the recoverable amount.

II. Assessment of control

Judgement made in relation to accounting policies

The Group needs to determine if it will continue to control its investment in Vanchem following the closing of the transaction. The Group will initially have the right to appoint half of the board of Vanchem (the "Board"), including the Chairman, who will have a casting vote. The Chairman of the Board will rotate between the shareholders every three years, unless SPR has the right to appoint a director on the Board of the Group which would remove the requirement for the Chairman rotate. The Board has the authority to manage and direct the business and affairs of Vanchem and there are no limitations on the Board's authority. All matters required to be approved by the Board, including capital investment, operating, and financing decisions and annual budgets will be made by a simple majority vote. In case there is a deadlock on these decisions, the Chairman will have a casting vote in addition to his/her deliberation vote. There is no limitations on the Chairman's casting vote.

The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Based on the ability to appoint the initial Chairman of the board and the expectation that the Chairman will continue to be a Group appointee because SPR would have representation on the Group's Board, the directors have made a significant judgement that the Group will continue to control its investment in Vanchem. As the reduction in the level of ownership of Vanchem will not result in a loss of control the assets and liabilities have not been classified as held for sale.

Subsequent to year-end (see note 36), the Group amended the agreement with SPR whereby it will acquire the entire Vanchem asset. This is

considered a non-adjusting subsequent event and does not impact the above assessment.

Other judgement and estimates

I. Environmental rehabilitation liabilities

Key sources of estimation uncertainty

Estimating the future costs of environmental and rehabilitation obligations is complex and requires management to make estimates and judgements as most of the obligations will be fulfilled in the future and contracts and laws are often not clear regarding what is required. The resulting provisions are further influenced by changing technologies, political, environmental, safety, business and statutory considerations (see note 26).

4. Segmental reporting

Bushveld Minerals Limited's operating segments are identified by the Chief Executive Officer and the Executive Committee, collectively named as the CODM. The operating segments are identified by the way the Group's operations are organised. As at 31 December 2023, the Group operated within three operating segments, vanadium mining and production, which consists of the Vametco and Vanchem operations; energy and mineral exploration activities for vanadium; and coal exploration (together "Exploration"). Activities take place in South Africa (vanadium and energy), Madagascar (coal), other African countries (energy project development), and global (battery investment, vanadium sales). Corporate includes the remaining balances within the Group.

Segment revenue and results

The following is an analysis of the Group's revenue and results by reportable segment.

Consolidated statement of profit or loss

2023 (Figures in thousands of US$)	Revenues	Cost of sales1	Other costs2	Administrative expenses3	Impairment losses	Operating loss
Vanadium mining and production	137,471	(122,068)	(18,815)	(6,139)	(9,017)	(18,568)
Exploration	-	-	-	(4)	(49,620)	(49,624)
Energy	-	-	25	(924)	-	(899)
Corporate	-	-	223	(13,719)	-	(13,496)
Total	137,471	(122,068)	(18,567)	(20,786)	(58,637)	(82,587)

1 Includes depreciation of US$15.97 million.

2 Other costs include other operating income, other mine operating costs, selling and distribution costs and idle plant costs.

3 Includes depreciation of US$0.11 million for Vanadium mining and production, US$0.28 million for Energy and US$0.13 million for Corporate.

Consolidated statement of profit or loss

2022 (Figures in thousands of US$)	Revenues	Cost of sales1	Other costs2	Administrative expenses3	Impairment losses	Operating loss
Vanadium mining and production	148,446	(108,304)	(16,525)	(8,435)	(18,454)	(3,272)
Exploration	-	-	-	(21)	(5,137)	(5,158)
Energy	2	-	171	(952)	(374)	(1,153)
Corporate	-	-	369	(10,920)	-	(10,551)
Total	148,448	(108,304)	(15,985)	(20,328)	(23,965)	(20,134)

1 Includes depreciation of US$18.04 million.

2 Other costs include other operating income, other mine operating costs, selling and distribution costs and idle plant costs.

3 Includes depreciation of US$0.15 million for Vanadium mining and production, US$0.10 million for Energy and US$0.18 million for Corporate.

	2023		2022
Figures in thousands of US$	Total assets	Total liabilities	Total assets	Total liabilities
Vanadium mining and production	139,018	107,662	186,460	104,351
Exploration	4,114	141	53,679	38
Energy	19,094	13,189	17,432	10,836
Corporate	17,692	58,116	10,017	46,732
Total	179,918	179,108	267,588	161,957

5. Revenue


Figures in thousands of US$	2023	2022
Revenue from contracts with customers Sale of goods	137,471	148,446
Other	-	2
	137,471	148,448
Disaggregation of revenue from contracts with customers The Group disaggregates revenue from customers as follows: Sale of goods Local sales of vanadium - NV12	4,514	5,503
Local sales of vanadium - NV16	1,973	2,650
Local sales of vanadium - MVO	128	4
Total local sales	6,615	8,157
Export sales of vanadium - NV12	34,861	34,939
Export sales of vanadium - NV16	83,439	99,672
Export sales of vanadium - AMV	12,556	5,678
Total export sales	130,856	140,289
Other	-	2
Total revenue from contract with customers	137,471	148,448

Revenue with contract customers is generated from sale of goods and is recognised upon delivery of the goods to the customer, at a point in time and comprises the invoiced amount of goods to customers, net of value added tax.

6. Staff costs

Figures in thousands of US$	2023	2022
Production staff	24,055	25,799
Administrative staff	7,212	7,259
Key management personnel	1,836	2,068
	33,103	35,126

Details of directors' remuneration are included in note 35 (related-party transactions).

7. Administrative expenses by nature

Figures in thousands of US$	2023	2022
Key management personnel	1,836	2,068
Staff costs	7,212	7,259
Depreciation of property, plant and equipment	520	439
Professional fees	7,051	6,007
Share-based payments	(254)	315
Other	4,421	4,240
	20,786	20,328

8. Finance income

Figures in thousands of US$	2023	2022
Bank interest	149	206
Interest on restricted investment	218	127
Other finance income	156	161
	523	494

9. Finance costs

Figures in thousands of US$	Notes	2023	2022
Interest on borrowings	28	12,151	11,189
Unwinding of discount on environmental rehabilitation liabilities	26	1,873	1,726
Interest on lease liabilities	29	724	974
Other finance costs		639	259
		15,387	14,148

10. Other losses


Figures in thousands of US$	Notes	2023	2022
Movement in earnout estimate	27	6	693
Loss on financial instrument	17	1,700	125
Loss on conversion of loan	17	352	-
Write-off loan		1,320	-
		3,378	818

The Group provided a working capital loan to Mustang Energy Plc ("Mustang") of US$0.42 million which was repaid by issuing equity in the

capital of Mustang. The difference between the loan amount and the fair value of the equity received was recognised as a loss in the consolidated statement of profit or loss.

The Group provided additional funding to Enerox GmbH of US$1.32 million which were written-off as the loan is not repayable.

11. Taxation

Figures in thousands of US$	2023	2022
Current
Current income tax on profits for the year	3,196	3,294
Deferred
Deferred income tax movement for current year	(1,456)	(4,659)
Prior year adjustment	(10)	20
	(1,466)	(4,639)
Income tax expense/(recovery)	1,730	(1,345)
The income tax expense/(recovery) represents the sum of the tax currently payable and the deferred tax adjustment	for the year.
	2023	2022
Loss before tax	(105,039)	(36,784)
Tax at the applicable tax rate of 27% (2022: 28%)1	(28,361)	(10,300)
Tax effect on non-deductible items	13,697	1,423
Origination and reversal of temporary differences	3,979	(2,045)
Deferred tax asset (recognised)/not recognised	7,376	7,916
Recognised deferred tax assets - initial recognition	-	(17)
Tax rate change	-	(210)
Foreign jurisdictions subject to a different tax rate	5,039	1,888
Taxation recovery for the year	1,730	(1,345)
1 Based on South African tax rate as it is the primary economic environment in which the Group operates.

12. Loss per share

Basic loss per share

Basic loss per share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares.

Figures in thousands of US$	2023	2022
Numerator Net loss attributable to equity holders	(103,927)	(38,968)
Denominator (in thousands) Weighted average number of common shares	1,399,650	1,270,637
Basic loss per share attributable to equity holders (cents)	(7.43)	(3.07)

Diluted loss per share

Due to the Group being loss making for the year, instruments are not considered dilutive and therefore the diluted loss per share is the same as basic loss per share for both financial years.

13. Intangible assets

	Vanadium and
Figures in thousands of US$	Iron Ore	Coal	Total
Balance, 1 January 2022	53,856	5,398	59,254
Capitalised expenditures	174	343	517
Impairment loss	-	(5,137)	(5,137)
Exchange differences	(561)	(604)	(1,165)
Balance, 31 December 2022	53,469	-	53,469
Capitalised expenditures	322	-	322
Impairment loss	(49,620)	-	(49,620)
Exchange differences	(471)	-	(471)
Transfer to asset held for sale	(3,700)	-	(3,700)
Balance, 31 December 2023	-	-	-

Mokopane Vanadium and Iron Ore Project

The Group has an interest in Prospecting right 95. The Department of Mineral Resources and Energy ("DMRE") executed a 30-year mining right on 29 January 2020 in favour of Pamish, over five farms: Vogelstruisfontein 765 LR; Vriesland 781 LR; Vliegekraal 783 LR; Schoonoord 786 LR; and Bellevue 808 LR (the "Mining Right") situated in the District of Mogalakwena, Limpopo, which make up the Mokopane Project.

The Mining Right required Pamish to commence mining activities, including in-situ activities associated with the Definitive Feasibility Study ("DFS") by end of January 2021. The Covid-19 pandemic resulted in a significant delay in the commencement of the DFS and the necessary engagement with local communities required to finalise land use arrangements and, consequently, this deadline was not met. Application to the DMRE for an extension to commence mining activities has been submitted and Pamish is awaiting a response.

The Group entered into a sale of shares agreement with SPR on 14 December 2023 to sell its interest in the Mokopane Project for US$3.7 million. The transaction is subject to certain regulatory approvals as well as other customary closing conditions. The Competition Commission approved the sale subsequent to year end.

At 31 December 2023, the Mokopane intangible asset met the criteria to be classified as held for sale and has been classified as a current asset held for sale on the consolidated statement of financial position. During the year ended 31 December 2023, an impairment charge of US$49.62 million was recognised in the consolidated statements of profit or loss to align the carrying value of the asset with the sales price. The intangible asset forms part of the exploration segment.

Brits Vanadium Project

The Group re-evaluated the Brits Vanadium Project and after careful consideration it was concluded that the Project should be discontinued.

There was no loss recognised as the costs were not previously capitalised.

Coal Project

Coal exploration licences have been issued to Coal Mining Madagascar SARL, a 99% subsidiary of Lemur Investments Limited. The exploration is in south west Madagascar covering 11 concession blocks in the Imaloto Coal basin known as the Imaloto Coal Project and Extension. The Imaloto Coal Project was impaired in 2023 as no further expenditures were budgeted. All further expenditures on the Imaloto Coal Project was expensed as incurred. Subsequent to year-end, the Group entered into an agreement to sell its interest in the Imaloto Coal Project.

14. Property, plant and equipment

	Buildings and		Motor vehicles,
	other	Plant and	furniture and	Right of use	Waste	Assets under
Figures in thousands of US$	improvements	machinery*	equipment	asset	stripping asset	construction	Total
Cost At 1 January 2022	6,957	169,484	1,374	5,066	-	19,147	202,028
Additions	-	691	138	2,989	1,850	15,988	21,656
Transfers within PPE Changes in environmental rehabilitation	63	19,376	34	-	-	(19,473)	-
liabilities	-	(1,705)	-	-	-	-	(1,705)
Exchange differences	(445)	(9,298)	(92)	(435)	(68)	(1,098)	(11,436)
At 31 December 2022	6,575	178,548	1,454	7,620	1,782	14,564	210,543
Additions Changes in environmental rehabilitation	-	-	245	1,729	616	5,454	8,044
liabilities	-	(336)	-	-	-	-	(336)
Scrapping of obsolete assets	(34)	(4,443)	(192)	(424)	-	-	(5,093)
Transfers within PPE	264	2,106	-	-	-	(2,370)	-
Exchange differences	(556)	(12,055)	(119)	(664)	(157)	(1,301)	(14,852)
At 31 December 2023	6,249	163,820	1,388	8,261	2,241	16,347	198,306
Accumulated depreciation At 1 January 2022	(1,280)	(45,318)	(759)	(1,560)	-	-	(48,917)
Depreciation charge for the year	(330)	(17,233)	(219)	(297)	(396)	-	(18,475)
Impairment	(898)	(17,920)	(10)	-	-	-	(18,828)
Exchange differences	122	2,776	56	117	14	-	3,085
At 31 December 2022	(2,386)	(77,695)	(932)	(1,741)	(382)	-	(83,134)
Depreciation charge for the year	(331)	(14,120)	(185)	(433)	(1,422)	-	(16,491)
Scrapping of obsolete assets	32	3,651	191	424	-	-	4,298
Impairment	(421)	(7,750)	(14)	-	-	(37)	(8,222)
Exchange differences	198	4,530	73	144	42	-	4,987
At 31 December 2023	(2,908)	(91,384)	(867)	(1,605)	(1,761)	(37)	(98,562)
Net Book Value
At 31 December 2022	4,189	100,853	522	5,880	1,401	14,564	127,409
At 31 December 2023	3,341	72,436	521	6,656	480	16,310	99,744
* Include decommissioning assets.

The right of use asset of US$6.65 million relates to land and buildings of US$6.62 million and plant and machinery of US$0.03 million.

Impairment disclosure

Vanchem cash generating unit (cgu)

An impairment loss of US$8.22 million was recognised in the consolidated statement of profit and loss within impairment losses and in the

consolidated statement of financial position as a reduction to property, plant, and equipment to align the carrying value of the Vanchem CGU

with the recoverable amount of US$39.75 million (see note 3).

Other

The Group also recognised an impairment charge of US$0.79 million in the consolidated statement of profit or loss related to items of property, plant and equipment that were identified as being no longer in use.

15. Investment property

Figures in thousands of US$	2023	2022
Balance, beginning of the year	2,412	2,595
Fair value movement	(32)	(17)
Exchange differences	(207)	(166)
Balance, end of the year	2,173	2,412
Investment properties comprise residential housing in Brits and Elandsrand, North West Province.

Investment properties are stated at fair value (level 3 of the fair value hierarchy), which has been determined based on valuations performed by Domus Estate Management, an accredited independent valuer, as at 31 December 2023. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following valuation techniques and key inputs were used in the valuation of the investment properties:

i. Physical inspection of each property;

ii. Consultation with estate agencies to discuss current sales market trends; and

iii. Comparative sales reports were obtained for locations where properties are situated in South Africa.

16. Deferred tax asset/(liability)

Figures in thousands of US$	2023	2022
Deferred tax liability Investment properties	(371)	(517)
Property, plant and equipment	(15,167)	(17,925)
Prepayments	(16)	(15)
Expected credit losses	(64)	(18)
Total deferred tax liability	(15,618)	(18,475)
Deferred tax asset Provisions	895	(642)
Environmental rehabilitation liabilities	4,491	4,549
Lease liabilities	1,373	1,521
Non-deductible expenses	1,360	1,029
Post-retirement medical liability	426	460
Deferred tax balance from temporary differences other than unused tax losses	8,545	6,917
Unused tax losses	7,537	10,367
Total deferred tax asset	16,082	17,284
Deferred tax liability	(15,618)	(18,475)
Deferred tax assets	16,082	17,284
Total net deferred tax asset/(liability)	464	(1,191)

The evidence supporting recognition of a deferred tax asset is forecast for Vametco to which the losses relate which indicate with reasonable

certainty the availability of sufficient future taxable profits and the existence of corresponding deferred tax liabilities against which the losses

can be utilised.

			Other
	Beginning	Statement of	comprehensive
2023 (Figures in thousands of US$)	balance	profit or loss	income	differences	Ending balance
Deferred tax liability
Investment properties	(517)	7	-	139	(371)
Property, plant and equipment	(17,925)	1,223	-	1,535	(15,167)
Prepayments	(15)	(3)	-	2	(16)
Expected credit losses	(18)	(48)	-	2	(64)
Deferred tax asset
Provisions	(642)	1,491	-	46	895
Non-deductible expenses	1,029	422	-	(91)	1,360
Environmental rehabilitation liabilities	4,550	336	-	(395)	4,491
Lease liabilities	1,521	(17)	-	(131)	1,373
Post-retirement medical liability	459	5	2	(40)	426
Unused tax losses	10,367	(1,950)	-	(880)	7,537
	(1,191)	1,466	2	187	464

			Other
2022 (Figures in thousands of US$)	Beginning balance	Statement of profit or loss	comprehensive income	Exchange differences	Ending balance
Deferred tax liability Investment properties	(577)	24	-	36	(517)
Property, plant and equipment	(25,722)	6,374	-	1,423	(17,925)
Prepayments	(24)	8	-	1	(15)
Expected credit losses	-	(19)	-	1	(18)
Deferred tax asset Provisions	711	(1,358)	-	5	(642)
Non-deductible expenses	-	1,068	-	(39)	1,029
Environmental rehabilitation liabilities	5,049	(181)	-	(318)	4,550
Lease liabilities	195	1,389	-	(63)	1,521
Post-retirement medical liability	534	-	(34)	(41)	459
Unused tax losses	13,820	(2,666)	-	(787)	10,367
	(6,014)	4,639	(34)	218	(1,191)

17. Financial assets

Figures in thousands of US$	Notes	2023	2022
Balance, beginning of the year		3,075	-
Additions		24	2,923
Loss on financial instrument		(1,700)	-
Finance income		138	159
Transfer to investments in joint ventures	18	(987)	-
Exchange differences		(526)	(7)
Balance, end of the year		24	3,075

The Group subscribed in 2022 for two convertible loan notes issued by Mustang Energy Plc ("Mustang") with a principle amount of US$2.93 million bearing 10% interest per annum in exchange for a convertible loan note issued to Primorius and share capital issued to Lind Partners (see note 23 and 28).

The convertible loan notes were cancelled upon the exercise of the Mustang backstop agreement and the Group received Mustang's interest in VRFB (see note 18 and 23). The difference between the fair value of the convertible loan notes and the fair value of Mustang's interest in VRFB was recognised as a loss on financial instrument in the consolidated statement of profit or loss.

18. Investments in associate and joint ventures

Figures in thousands of US$	VRFB	Mini-Grid	Total
Balance, 1 January 2022	7,855	-	7,855
Transfer from financial assets	-	1,211	1,211
Share of loss	(5,112)	-	(5,112)
Exchange differences	(751)	(52)	(803)
Balance, 31 December 2022	1,992	1,159	3,151
Additional investment on issue of shares	1,886	-	1,886
Transfer from financial assets	987	-	987
Share of loss	(4,242)	-	(4,242)
Exchange differences	678	(100)	578
Balance, 31 December 2023	1,301	1,059	2,360

VRFB Holdings Limited ("VRFB") - Associate

The Group acquired a 50.5% interest in VRFB in April 2021, which is the holding company for the Group's 50% investment in Enerox GmbH

("CellCube"). Upon the exercise of the Mustang backstop agreement (see note 23), Mustang transferred its 22.1% interest in VRFB to the Group. The Group did not participate in the fund raisings of CellCube and its investment in CellCube was diluted from 50% to 30.58%.

The Group accounts for its effective shareholding in CellCube through VRFB as an investment in associate.
Figures in thousands of US$	2023	2022
Summarised financial information in respect of VRFB is set out below: Revenue	2,923	11,183
Net loss	(11,744)	(20,389)
Other comprehensive income	-	275
Comprehensive loss	(11,744)	(20,114)

Hybrid Mini-Grid Company Proprietary Limited ('Mini-Grid") - Joint Venture

The Group entered into a shareholders' agreement with NESA Investment Holdings, whereby it holds a 40% interest in Mini-Grid.

The Group accounts for its 40% shareholding as an investment in joint venture as the relevant decisions require unanimous consent.

19. Inventories

Figures in thousands of US$	2023	2022
Finished goods	12,702	23,511
Work in progress	15,566	14,740
Raw materials	2,510	4,435
Consumable stores	11,495	12,304
Total inventories	42,273	54,990

The cost of inventories recognised as an expense during the year was US$104.97 million (2022: US$88.60 million).

The Group recognised a net realisable value write-down of finished goods amounting to US$0.84 million (31 December 2022: US$0.33 million)

and work in progress amounting to US$0.94 million (31 December 2022: US$0.19 million). The Group recognised a write-down of raw materials and work in progress for US$1.19 million (31 December 2022: US$ nil).

20. Trade and other receivables

Figures in thousands of US$	Notes	2023	2022
Financial assets:
Trade receivables		7,590	3,134
Other receivables		525	2,856
Expected credit losses		(116)	(78)
Subscription receivables Non-financial assets:	23	13,917	-
Value-added taxes		2,510	3,163
Deposits		133	19
Prepaid expenses		459	404
Total trade and other receivables		25,018	9,498

Categorisation of trade and other receivables

Trade and other receivables are categorised as follows in accordance with IFRS 9: Financial Instruments:


Figures in thousands of US$	2023	2022
At amortised cost	21,916	5,912
Non-financial instruments	3,102	3,586
	25,018	9,498

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 15-90 days and therefore are all classified as current.

The fair value of trade and other receivables approximate the carrying value due to the short maturity.

Impairment and risk exposure

Information about the impairment of trade receivables and the Group's exposure to credit risk, interest rate risk and foreign currency risk can be found in note 33.

21. Restricted investment

Figures in thousands of US$

2023

2022

Rehabilitation insurance fund

2,881

2,710

Split between non-current and current portions

Non-current assets

2,881

2,710

The Group is required by statutory law in South Africa to hold this restricted investment in order to meet environmental rehabilitation liabilities on the statement of financial position (see note 26 and 34 for further details).

22. Cash and cash equivalents

Figures in thousands of US$	2023	2022
Cash and cash equivalents consist of: Bank balances	1,280	8,348
Short-term deposits	1	2,526
	1,281	10,874

Cash and cash equivalents (which are presented as a single class of assets on the face of the statement of financial position) comprise cash at bank and other short-term highly liquid investments with an original maturity of three months or less.

The total cash and cash equivalents denominated in South African Rand amount to US$0.78 million (2022: US$6.72 million).

The fair value of cash and cash equivalents approximates the carrying value due to the short maturity.

23. Share capital, share premium and reserves

				Total share
Figures in thousands of US$	Number of shares	Share capital	Share premium	capital and premium
Balance, 1 January 2022	1,260,458,857	16,797	125,551	142,348
Shares issued - Directors and staff	2,324,842	29	494	523
Shares issued - Primorus Convertible	4,157,645	54	476	530
Shares issued - Lind	20,876,937	242	1,181	1,423
Balance, 31 December 2022	1,287,818,281	17,122	127,702	144,824
Shares issued - Mustang backstop agreement	270,393,578	1,886	-	1,886
Shares issued - Acquisition of minority interest	232,836,255	2,948	3,538	6,486
Shares issued - Equity raise (net of cost)	395,897,277	4,988	9,032	14,020
Balance, 31 December 2023	2,186,945,391	26,944	140,272	167,216

The Board may, subject to Guernsey law, issue shares or grant rights to subscribe for or convert securities into shares. It may issue different classes of shares ranking equally with existing shares. It may convert all or any classes of shares into redeemable shares. The Company may also hold treasury shares in accordance with the law. Dividends may be paid in proportion to the amount paid up on each class of shares.

As at the 31 December 2023, the Company owns 670,000 (31 December 2022: 670,000) treasury shares with a nominal value of 1 pence.

Shares issued

Directors and staff

The Company issued in 2022 2,324,842 new ordinary shares of 1 pence each in the Company in respect of the short-term incentive plans.

Primorus Investments Plc ("Primorus")

The Company issued a convertible loan note to Primorus. The Company issued a total of 4,157,645 new ordinary shares of 1 pence each in accordance with the conversion provisions.

Lind Global Macro Fund, Lp ("LIND")

The Company issued 20,876,937 new ordinary shares of one pence each to Lind in accordance with the Investment Agreement between the

Company and Mustang.

Mustang backstop agreement

The Company entered into an investment agreement with Mustang whereby the holders of the Mustang convertible loan notes ("CLN") would

be able to request the issuance of new shares if Mustang's shares had not been readmitted to trading on the LSE by 31 July 2023.

In August 2023, each of the CLN holders had elected to redeem their CLNs and were issued 270,393,578 new ordinary shares of one pence each in Bushveld.

Acquisition of minority interest

The Company acquired on 20 December 2023, the 26% minority interest in Bushveld Vametco Holdings owned by a Black Economic

Empowerment ("BEE") consortium in return for the issue of 232,836,255 shares in the Company, cash payment of ZAR18 million and the

cancellation of a US$0.51 million loan.

Equity raise

The Company completed an equity raised on 27 December 2023 whereby it issued 395,897,277 new ordinary shares at a price of three pence per share for gross proceeds of US$14.97 million. The Company incurred transaction costs of US$0.95 million of which US$0.25 million was paid. The Company received US$0.79 million in net proceeds and recorded a receivable of US$13.92 million for the proceeds received subsequent to year end.

Nature and purpose of other reserves

Share premium

The share premium reserve represents the amount subscribed for share capital in excess of nominal value.

Share-based payment reserve

The share-based payment reserve represents the cumulative fair value of share options granted to employees.

Foreign exchange translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of financial statements of foreign operations.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of financial assets at fair value through other comprehensive income until the assets are derecognised or impaired and actuarial changes recognised on the post retirement medical aid liability.

Retained income reserve

The retained income reserve represents other net gains and losses and transactions with owners (e.g. dividends) not recognised elsewhere.

24. Share-based payments

Short-term incentive ("STI")

	Number of shares
Deferred share awards	2023	2022
Balance, beginning of the year	-	1,212,360
Vested	-	(1,099,404)
Forfeited	-	(112,956)
Balance, end of the year	-	-

The Group awarded 2,424,720 deferred share awards to certain employees on 5 August 2021 under its short-term incentive plan. The deferred

share awards vested in equal tranches after 12 months (31 December 2021) and 18 months (30 June 2022). The vesting of the deferred share

awards is dependent on the employees still being employed on the respective vesting dates. The deferred share awards are settled directly by the Company, in its own shares. The fair value of the deferred share awards was US$0.42 million which is the market price of the Company's share at grant date (￡0.13) and the exchange rate on that date.

The Group awarded 2,801,300 deferred share awards to certain employees on 5 August 2021 in lieu of a cash bonus. These deferred share awards vested on 31 December 2021. The vesting of the deferred share awards is dependent on the employees still being employed on the vesting date. The deferred share awards are settled directly by the Company, in its own shares. The fair value of the deferred share awards was US$0.50 million which is the market price of the Company's share at grant date (￡0.13) and the exchange rate on that date.

The Company issued in 2022 2,324,842 new ordinary shares of one pence each in respect to the STI (see note 23) and 2,788,222 shares are still to be issued to certain employees being in a closed period.

Long-term incentive ("LTI")

	Number of shares
Performance awards	2023	2022
Balance, beginning of the year	-	2,458,443
Granted	16,750,860	-
Vested	-	-
Forfeited	(6,599,110)	-
Lapsed	-	(2,458,443)
Balance, end of the year	10,151,750	-

The Remuneration Committee approved performance awards in 2022, which were awarded in 2023. The performance awards vest over a period of three years (1 January 2022 - 31 December 2024) and is subject to both employment and performance conditions. The performance conditions states that 60% of the number of performance awards will vest based on the performance of the Company's total shareholder return ("TSR") and 40% of the performance awards will vest based on the performance of the Group's normalised cash return on equity ("nCROE"). Based on the Group's performance on both TSR and nCROE being below the threshold, it is expected that the performance awards will not vest.

The Group awarded performance awards to certain employees in 2019 and at vesting date it was determined that zero percent of the performance awards vested as the performance conditions were not met.

25. Post-retirement medical liability

The benefit comprises medical aid subsidies provided to qualifying retired employees. Actuarial valuations are made annually with the most recent valuation on 31 December 2023. The present value of the post-retirement medical liability were measured using the projected unit credit method.

The following table summarises the components of the net benefit expense recognised in the consolidated statement of profit or loss and the consolidated statement of comprehensive income or loss and the amounts recognised in the consolidated statement of financial position.

Figures in thousands of US$	2023	2022
Balance, beginning of the year	1,675	1,906
Net expense recognised in profit or loss	3	13
Actuarial changes recognised in other comprehensive income or loss	44	(126)
Exchange differences	(145)	(118)
Balance, end of the year	1,577	1,675
The principal assumptions used for the purposes of the actuarial valuation was as follows:
	2023	2022
Actual age	77.8 years	77.3 years
Discount rates	11.70%	11.60%
Health care cost inflation	7.70%	7.80%
Duration of liability	8.62 years	8.8 years

A one percent change in the assumed rate of healthcare costs inflation would have the following effect on the present value of the unfunded

obligation: Plus one percent - US$0.12 million (2022: US$0.13 million); Less one percent - US$0.11 million (2022:US$0.12 million).

A one percent change in the assumed interest rate would have the following effect on the current service cost and interest cost: Plus one percent - US$0.18 million (2022: US$0.20 million); Less one percent - US$0.16 million (2022: US$0.17 million).

26. Environmental rehabilitation liabilities

Figures in thousands of US$	Notes	2023	2022
Balance, beginning of the year		16,610	18,031
Unwinding of discount	9	1,873	1,726
Change in estimates charged to profit or loss		(75)	(291)
Change in estimates capitalised to property, plant and equipment	14	(336)	(1,705)
Exchange differences		(1,439)	(1,151)
Balance, end of the year		16,633	16,610

The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a discounted basis at the time of developing the mine and installing and using those facilities.

The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred up to 2052, which is when the producing mine properties are expected to cease operations. These provisions have been created based on the Group's internal estimates. Assumptions based on the current economic environment have been made, which management believes are a reasonable basis upon changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically viable rates. This, in turn, will depend upon future vanadium prices, which are inherently uncertain.

The provision is calculated using the following key assumptions:

	2023	2022
Inflation rate	11.26%	10.41%
Discount rate	12.26%	11.41%

A one percent change in the assumed discount rate would have the following effect on the present value of the provision: Plus one percent -

decrease of US$3.77 million; Less one percent - increase of US$4.93 million.

A one percent change in the assumed inflation rate would have the following effect on the present value of the provision: Plus one percent -

increase of US$4.93 million; Less one percent - decrease of US$3.83 million.

27. Deferred consideration

Figures in thousands of US$	Notes	2023	2022
Balance, beginning of the year		2,428	1,684
Finance costs		176	51
Movement in earnout estimate	10	6	693
Balance, end of the year		2,610	2,428
Split between non-current and current portions Current deferred consideration		2,304	901
Non-current deferred consideration		306	1,527
		2,610	2,428

The Group is required to pay an earnout amount to EVRAZ on the acquisition of the Vametco Group which is based on the annual percentage of additional revenue ascribed to Bushveld Vametco Alloys as a result of the prevailing price being above the trigger price in respect of each financial year commencing on 1 January 2018 and ending on 31 December 2025, up to a maximum amount of US$5.55 million.

Management updated their estimated earnout payment to reflect actual production and price for the year ended 31 December 2023 and estimated production and price for future years which resulted in an increase of US$0.06 million in the estimated earnout payment.

28. Borrowings

Figures in thousands of US$	2023	2022
Orion production financing agreement ("PFA")	35,635	35,146
Orion convertible loan notes ("CLN")	46,766	39,742
Southern Point Resources ("SPR") interim working capital facility	7,812	-
Industrial Development Corporation ("IDC") shareholder loan	2,664	1,999
IDC property, plant and equipment loan	3,574	3,481
Other	2,124	2,762
	98,575	83,130
Split between non-current and current portions
Non-current	38,008	35,272
Current	60,567	47,858
	98,575	83,130

			SPR interim
			working capital
Figures in thousands of US$	Orion PFA	Orion CLN	facility	IDC loans	Other	Total
Balance, 1 January 2022	33,512	36,282	-	3,282	6,821	79,897
Cash changes: Proceeds from borrowings	-	-	-	3,416	806	4,222
Repayment of principle and interest Non-cash changes: Convertible loan note in exchange	(2,906)	-	-	-	(5,934)	(8,840)
for financial assets	-	-	-	-	1,636	1,636
Conversion of convertible loan notes	-	-	-	-	(530)	(530)
Finance costs	4,420	6,394	-	470	375	11,659
Fair value gain on derivative liability	-	(2,934)	-	-	-	(2,934)
Adjustment to reflect market value of loan	-	-	-	(1,789)	-	(1,789)
Exchange differences	120	-	-	101	(412)	(191)
Balance, 1 January 2023	35,146	39,742	-	5,480	2,762	83,130
Cash changes: Proceeds from borrowings	-	-	7,505	942	543	8,990
Repayment of principle and interest Non-cash changes:	(3,859)	-	(263)	-	(1,375)	(5,497)
Finance costs1	4,450	7,056	420	590	225	12,741
Fair value gain on derivative liability	-	(32)	-	-	-	(32)
Remeasurement of financial liabilities	-	-	-	(436)	-	(436)
Exchange differences	(102)	-	150	(338)	(31)	(321)
	35,635	46,766	7,812	6,238	2,124	98,575

Orion Mine Finance Production Financing Agreement

The Group signed a long-term production financing agreement ("PFA") of US$30 million with Orion Mine Finance ("Orion") in December 2020,

primarily to finance its expansion plans at Bushveld Vametco Alloys Proprietary Limited and debt repayment. Exchange control authorisation from the South Africa Reserve Bank Financial Surveillance Department was granted in October 2020.

PFA details

The Group will repay the principal amount and pay interest via quarterly payments determined initially as the sum of:

· a gross revenue rate (set at 1.175% for 2020 and 2021 and 1.45% from 2022 onwards, subject to adjustment based on applicable quarterly vanadium prices) multiplied by the gross revenue for the quarter; and

· a unit rate of US$0.443/kgV multiplied by the aggregate amount of vanadium sold for the quarter.

Once the Group reaches vanadium sales of approximately 132,020 mtV during the term of the facility, the gross revenue rate and unit rate will

reduce by 75% (i.e. to 25% of the applicable rates).

On each of the first three loan anniversaries, the Group had the option to repay up to 50% of both constituent loan parts (each may only be repaid once). If the Group utilises the loan repayment option, the gross revenue rate and/or the unit rate will reduce accordingly.

The PFA capital will provide funding to continue to grow production at Vametco to more than 4,300 mtV per annual production level and debt repayment. Part of the proceeds were used by the Group to prepay in full the Nedbank ZAR250 million term loan.

First amendment

The Group entered into a first amendment to the agreement on 6 August 2021. In terms of the amendment, US$17.8 million of the funds ringfenced for the Vametco Phase 3 Expansion was reallocated to Vanchem mainly for capital expenditure on Kiln-3.

The original PFA had a cap of 1,075 mtV per quarter. This amounted to 4,300 mtV per annum expected from 2024 onwards following the completion of the Vametco Phase 3 expansion project. The amended agreement, with the addition of the Vanchem production volumes from 1 July 2021 resulted in the initial cap of 4,300 mtV being brought forward, from 1 July 2022 instead of from 2024.

Orion mine finance convertible loan notes instrument

The Company subscribed to a US$35 million convertible loan notes instrument in December 2020 (the "Instrument") with Orion Mine Finance

("Orion"). The Instrument's proceeds were used towards the first phase of Vanchem's critical refurbishment programme and debt repayment.

The terms of the Instrument are:

· A fixed 10% per annum coupon with a three-year maturity date from the drawdown date.

· All interest will accrue and be capitalised on a quarterly basis in arrears but compounded annually.

· Accumulated capitalised and accrued interest is convertible into Bushveld ordinary shares. All interest and principal, to the extent not converted into ordinary shares, is due and payable at maturity date.

· Conversion price set at 17 pence.

The conversion features are:

Between drawdown and the Instrument's maturity date Orion may, at their option, convert an amount of the outstanding debt, including capitalised and accrued interest, into Bushveld's ordinary shares as follows:

· First six months: Up to one third of the outstanding amount;

· Second six months: Up to two thirds of the outstanding amount (less any amount previously converted);

· From the anniversary of drawdown until the maturity date: The outstanding amount under the Instrument may be converted;

· The Company also has the option to convert all, but not some, of the amount outstanding under the Instrument, if its volume weighted average share price is more than 200% of the conversion price over a continuous 15 trading day period, a trading day being a day on which the AIM market is open for the trading of securities.

At any time until the convertible maturity date, Orion may convert the debt as above mentioned into an amount of ordinary shares equal to the total amount available for conversion under the Instrument divided by the conversion price of 17 pence.

The Company entered into an agreement on 27 November 2023 with Orion to extend the maturity date of the Instrument to 31 January 2024 and subsequently refinanced the Instrument (see note 36).

Figures in thousands of US$	Loan	liability	Total
Balance, 01 January 2022	33,316	2,966	36,282
Finance costs and fair value gain	6,394	(2,934)	3,460
Balance, 31 December 2022	39,710	32	39,742
Finance costs and fair value gain	7,056	(32)	7,024
Balance, 31 December 2023	46,766	-	46,766

The Orion borrowings are secured against certain group companies and associated assets.

SPR Interim Working Capital Facility

Bushveld Vanchem ("Vanchem") entered into a loan agreement with SPR on 19 September 2023 whereby SPR borrowed ZAR150.0 million to Vanchem.

The loan bears interest, which is payable in cash every two weeks, in the following amount:

· If the Vanadium Price is less than US$35/kgV, an amount equal to 0.54% of ZAR150,000,000;

· If the Vanadium Price is equal to or more than US$35/kgV but less than US$40/kgV, an amount equal to 0.58% of ZAR150,000,000; and

· If the Vanadium Price is equal to or more than US$40/kgV, an amount equal to 0.62% of ZAR150,000,000.

The loan is repayable in full on the maturity date, which is the first of:

· The date on which the lender gives a step-in notice (this is when an event of default continues for more than 30 days); or

· The date on when the Vanchem and Mokopane Acquisition have been fully implemented; or

· First anniversary of the advance date (22 September 2024).

The loan is secured by a Mortgage Bond of ZAR750 million over the movable property of Vanchem and Notarial Bond of ZAR750 million over the immovable property of Vanchem.

The Group incurred transaction costs of US$0.41 million which have been capitalised and offset against the carrying amount of the loan and are being amortised using the effective interest rate method.

Industrial Development Corporation Shareholder Loan

Bushveld Electrolyte Company ("BELCO") is 55% owned by Bushveld Energy Company ("BEC") and 45% by the Industrial Development Corporation ("IDC"). The loan represents the IDC's contribution to BELCO and consists of the initial capitalised cost of ZAR4.38 million (US$0.24 million; 31 December 2022: ZAR4.38 million (US$0.26 million)) and the subsequent subscription amount of ZAR72.71 million (US$3.91 million; 31 December 2022: ZAR55.31 million (US$3.26 million)).

The loan is interest free, unsecured, subordinated in favour of BELCO's creditors and has no fixed term of repayment and shall only be repaid from free cash flow when available. BELCO has the unconditional right to defer settlement until it has sufficient free cash flow to settle the outstanding amount, which is estimated at the end of 2028. The loan has been classified as non-current.

The shareholder loan is measured at the present value of the future cash payments discounted using an interest rate of 8.5%, which is the

estimated prevailing market rate. The difference between the fair value and the nominal amount of US$0.43 million (31 December 2022:

US$1.79 million) was recognised as a capital contribution from the non-controlling interest.

A general notarial bond for a minimum amount of ZAR140 million plus an additional sum of 30% for ancillary costs and expenses was registered over all the movable assets owned by BELCO.

Industrial development corporation property, plant and equipment loan

The IDC provided a property, plant and equipment loan to BELCO as part of the funding for the construction of the electrolyte plant. The loan bears interest at the South African prime rate plus 2.5% margin and is repayable in 84 equal monthly installments starting in July 2024.

Development Bank of Southern Africa - Facility Agreement

Lemur Holdings Limited entered into a US$1.0 million facility agreement with the Development Bank of Southern Africa Limited in March 2019. The purpose of the facility is to assist with the costs associated with delivering the key milestones to the power project. The repayment is subject to the successful bankable feasibility study of the project at which point the repayment would be the facility value plus an amount equal to an Internal Rate of Return ("IRR") of 40% capped at 2.5 times, which ever is lower. As at 31 December 2023, US$1.0 million (31 December 2022: US$1.0 million) was drawn down.

Primorius

The Company issued a convertible loan note to Primorus for the nominal amount of ￡1.20 million bearing interest at 10% per annum. The

convertible loan note may be converted into Bushveld ordinary shares at any time within the conversion period (the six conversion periods being: 28 February 2022 to 14 April 2022; 15 April 2022 to 14 July 2022; 15 July 2022 to 14 October 2022; 15 October 2022 to 16 January 2023;

17 January 2023 to 14 April 2023; 15 April 2023 to 14 July 2023) at a conversion price of ￡0.098987. Primorus converted ￡0.41 million of the

principal amount and was issued a total of 4,157,645 Bushveld ordinary shares.

The Company and Primorus agreed on 14 July 2023 to amend the terms of repayment whereby the Company will make the following payments:

· An initial payment of US$150,000, followed by bi-weekly payments of US$125,000 with the final payment to be made prior to the 30 November 2023.

The Company settled the outstanding amount.

NESA Investment Holdings ("NESA")

The Group entered into a loan agreement with Nesa to fund US$0.81 million (ZAR12.08 million) bearing interest at South African prime rate plus 3.5% margin. The maturity date of the loan was extended from 30 August 2023 to 30 August 2024 and the repayments will consist of the following:

· Accrued interest up to 31 August 2023 repaid on 31 August 2023;

· ZAR2.00 million capital repayment on 21 September 2023; and

· Thereafter 10 consecutive monthly payments starting from 30 November 2023.

The Group entered into a second loan agreement with Nesa to fund US$0.54 million (ZAR10.0 million) bearing interest at South African prime rate plus 4% margin. The maturity date of the loan was extended to 31 August 2026 and the repayments will consist of the following:

· Accrued interest up to 31 October 2023 repaid on 31 October 2023;

· ZAR0.53 million capital and interest repayment on 30 November 2023; and

· Thereafter 11 consecutive quarterly payments starting from 29 February 2024.

29. Lease liabilities


Figures in thousands of US$	Notes	2023	2022
Balance, beginning of the year		7,282	4,485
Additions		1,762	2,989
Finance cost	9	724	974
Payments		(703)	(728)
Exchange differences		(637)	(438)
Balance, end of the year		8,428	7,282
Non-current lease liabilities		7,746	6,721
Current lease liabilities		682	561
		8,428	7,282

Leases are entered into and exist to meet specific business requirements, considering the appropriate term and nature of the leases asset.

The Group leases relate to land leases, office leases and equipment lease.

Extension options

Some property leases contain extension options exercisable by the Group. The Group assesses at the lease commencement date whether it is

reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise its options if there is a

significant event or significant changes within its control.

30. Trade and other payables

Figures in thousands of US$	2023	2022
Financial liabilities:
Trade payables	41,784	40,573
Trade payables - related parties	10	61
Accruals and other payables Non-financial liabilities:	4,461	5,257
Value-added taxes	40	5
	46,295	45,896
Financial liabilities and non-financial liabilities components of trade and other payables At amortised cost	46,255	45,891
Non-financial instruments	40	5
	46,295	45,896

Trade and other payables principally comprise amounts outstanding for trade purchases and on-going costs. The average credit period taken for trade purchases is 120 days.

The Group has financial risk management policies in place to ensure that all payables are paid within the pre-arranged credit terms. No interest has been charged by any suppliers as a result of late payment of invoices during the year.

The directors consider that the carrying amount of trade and other payables is approximate to their fair value.

The total trade and other payables denominated in South African Rand amount to US$33.73 million (2022: US$29.78 million).

31. Provisions

Reconciliation of provisions - 2023

Figures in thousands of US$	Opening balance	Additions	Utilised during the year	Exchange differences	Total
Leave pay	1,588	10	(98)	(136)	1,364
Other	126	467	-	(13)	580
	1,714	477	(98)	(149)	1,944

Reconciliation of provisions - 2022

Figures in thousands of US$	Opening balance	Additions	Utilised during the year	Exchange differences	Total
Leave pay	1,629	80	(40)	(81)	1,588
Performance bonus	1,923	-	(1,923)	-	-
Other	170	-	(13)	(31)	126
	3,722	80	(1,976)	(112)	1,714

Leave pay

Leave pay represents employee leave days due multiplied by their cost to the company employment package.

Other

The other provisions represents estimates for retrenchment costs.

32. Non-controlling interest

Selected summarised financial information of subsidiaries that have material non-controlling interest are provided below:

Figures in thousands of US$	2023	2022
Bushveld Vametco Holdings
Percentage of voting rights held by non-controlling interest	-	26%
Current assets	-	85,598
Non-current assets	-	80,228
Current liabilities	-	(25,517)
Non-current liabilities	-	(45,311)
Net assets	-	94,998
Revenues	83,727	117,226
Net earnings/(loss) for the year	2,396	21,401
Net earnings/(loss) attributable to non-controlling interest	623	5,564
Net cash generated from/(used in) operating activities	(5,027)	14,270
Net cash used in investing activities	(3,111)	(10,649)
Net cash used in financing activities	-	(6,020)
Net increase/(decrease) in cash and cash equivalents	(8,138)	(2,398)

The Company acquired the 26% interest in Bushveld Vametco Holdings on 20 December 2023 (see note 23).

33. Financial instruments

The Group is exposed to the risks that arise from its use of financial instruments. This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these consolidated financial statements.

33.1. Categories of financial instruments

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

· Trade and other receivables

· Cash and cash equivalents

· Restricted investments

· Trade and other payables

· Borrowings

· Other financial assets

· Lease liabilities

· Deferred consideration

The Group holds the following financial assets and financial liabilities:

Figures in thousands of US$	2023	2022
Financial assets at amortised cost
Trade and other receivables	21,916	5,912
Restricted investment	2,881	2,710
Cash and cash equivalents	1,281	10,874
	26,078	19,496
Financial assets at fair value Other financial assets at fair value through profit or loss	24	3,075
Total financial assets	26,102	22,571
Financial liabilities at amortised cost
Trade and other payables	46,255	45,891
Borrowings	98,575	83,098
Lease liabilities	8,428	7,282
	153,258	136,271
Financial liabilities at fair value Borrowings - derivative liability	-	32
Deferred consideration	2,610	2,428
	2,610	2,460
Total financial liabilities	155,868	138,731

33.2. General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The Board receives reports

through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

33.3. Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising returns to shareholders. In order to maintain or adjust the capital structure, the Group may issue new shares or arrange debt financing. At 31 December 2023, the Group had borrowings of US$98.58 million (2022: US$83.13 million).

The capital structure of the Group consists of cash and cash equivalents, equity and borrowings. Equity comprises of issued capital and

retained income.

Figures in thousands of US$	2023	2022
Cash and cash equivalents	1,281	10,874
Borrowings	98,575	83,130
Equity	810	105,631
	100,666	199,635
The Group is not subject to any externally imposed capital requirements.

33.4 price risk

The Group's exposure to commodity price risk is dependent on the fluctuating price of the various commodities that it mines, processes and sells.

The average market price of each of the following commodities was:

	2023	2022
Vametco	US$/kgV	US$/kgV
Ferro Vanadium (FEV)	-	50.17
Nitrovan (NV)	36.39	44.45
Ammonium Metavanadate (AMV)	-	30.05
Modified Vanadium Oxide (MVO)	28.69	-
	2023	2022
Vanchem	US$/kgV	US$/kgV
Vanadium Pentoxide Flake (FVP)	29.15	31.82
Vanadium Pentoxide Chemical (VCM)	31.15	35.85
Sodium Ammonium Vanadate (SAV)	42.91	55.07
Ammonium Metavanadate (AMV)	23.11	52.80
Ferro Vanadium (FEV)	31.69	35.73
Vanadyl Oxalate Solution (VOX)	188.30	197.79
Potassium Metavanadate	29.45	42.41

If the average price of each of these commodities increased/decreased by 10%, assuming the same levels of production, the total sales related to each of these commodities would have increased/decreased as follows:

Vametco (Figures in thousands of US$)	Effect on 2023 revenue	Effect on 2023 net loss	Effect on 2022 revenue	Effect on 2022 net loss
Ferro Vanadium (FEV)	-	-	358	258
Nitrovan (NV)	8,505	6,123	11,568	8,329
Ammonium Metavanadate (AMV)	-	-	81	58
Modified Vanadium Oxide (MVO)	13	10	-	-
	8,518	6,133	12,007	8,645

	Effect on	Effect on	Effect on	Effect on
	2023	2023	2022	2022
Vanchem (Figures in thousands of US$)	revenue	net loss	revenue	net loss
Vanadium Pentoxide Flake (FVP)	1,175	858	494	356
Vanadium Pentoxide Chemical (VCM)	514	375	329	237
Sodium Ammonium Vanadate (SAV)	116	85	182	131
Ammonium Metavanadate (AMV)	73	53	34	25
Ferro Vanadium (FEV)	2,524	1,842	2,391	1,721
Vanadyl Oxalate Solution (VOX)	48	35	63	45
Potassium Metavanadate	116	85	157	113
	4,566	3,333	3,650	2,628

33.5. Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Ultimate responsibility for liquidity risk management rests with the Board. The Board manages liquidity risk by regularly reviewing the Group's gearing levels, cash-flow projections and associated headroom and ensuring that excess banking facilities are available for future use. The Group maintains good relationships with its banks and lenders, which have high credit ratings and its cash requirements are anticipated via the budgetary process.

At 31 December 2023, the Group had US$1.28 million (2022: US$10.87 million) of cash and cash equivalents. At 31 December 2023, the Group

had borrowings of US$98.58 million (2022: US$83.13 million), lease liabilities of US$8.43 million (2022: US$7.28 million) and trade and other

payables of US$46,30 million (2022: US$45.90 million).

2023 (Figures in thousands of US$)	Carrying amount	Contractual cash flows	<1 year	1-2 years	3-4 years	>4 years
*Orion PFA	35,635	135,482	4,130	8,748	8,951	113,653
Orion CLN	46,766	47,154	47,154	-	-	-
SPR interim working capital facility	7,812	8,944	8,944	-	-	-
IDC shareholder loan	2,664	4,148	-	-	-	4,148
IDC property, plant and equipment loan	3,574	5,981	427	1,709	1,709	2,136
Development Bank of South Africa	1,000	1,000	1,000	_-	-	-
Other	1,124	1,270	889	381	-	-
Lease liabilities	8,428	22,752	750	1,048	1,596	19,358
Trade and other payables	46,255	46,255	46,255	-	-	-
	Carrying	Contractual
2022 (Figures in thousands of US$)	amount	cash flows	<1 year	1-2 years	3-4 years	>4 years
*Orion PFA	35,146	139,795	4,181	8,626	8,833	118,155
Orion CLN	39,742	46,585	46,585	-	-	-
IDC shareholder loan	1,999	3,515	-	-	-	3,515
IDC property, plant and equipment loan	3,481	5,725	477	1,636	1,636	1,976
Development Bank of South Africa	1,000	1,000	-	1,000	-	-
Other	1,762	1,794	1,794	-	-	-
Lease liabilities	7,282	22,577	704	901	1,348	19,624
Trade and other payables	45,891	45,891	45,891	-	-	-

* The contractual cash flows are based on estimated principal and interest payments calculated as the sum of the gross revenue rate multiplied by the gross revenue for the quarter and the unit rate multiplied by the aggregate amount of vanadium sold for the quarter.

33.6. Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

The maximum amount of credit risk is equal to the balance of cash and cash equivalents, restricted investments, trade and other receivables

and other financial assets.

Credit risk is managed on a Group basis. Credit verification procedures are undertaken for all customers with whom we trade on credit. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The compliance with credit limits by customers is regularly monitored by line management.

Trade account receivables comprise a limited customer base. Ongoing credit evaluation of the financial position of customers is performed and granting of credit is approved by directors.

The Group holds cash and cash equivalents and restricted investments in creditworthy financial institutions that comply with the Company's credit risk parameters. The Group has a significant concentration of cash held on deposit with large banks in South Africa, Mauritius, United States of America and the United Kingdom with A ratings and above (Standards and Poors).

The concentration of credit risk by currency was as follows:

The concentration of credit risk by currency was as follows:
Figures in thousands of US$	2023	2022
Pound Sterling	436	20
Euro	4	-
South African Rand	785	6,702
United States Dollar	56	4,152
	1,281	10,874

Impairment of financial assets

The Group's only financial assets that are subject to the expected credit loss model are third-party trade receivables.

The Group applies the IFRS 9 simplified approach to measure expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets.

To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

The expected loss rates are based on the payment profiles of sales over a period of 36 month before 31 December 2023 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors.

On that basis, the loss allowance as at 31 December 2023 and 31 December 2022 was determined as follows for trade receivables:

Subsidiary - 2023 (Figures in thousands of US$)	Expected credit loss rate	Gross carrying amount	Loss allowance
Bushveld Vametco Alloys (Pty) Ltd	0.22%	1,183	3
Bushveld Vametco Limited	-%	1,760	-
Bushveld Vanchem (Pty) Ltd	0.99%	4,409	45
Ivanti Resources (Pty) Ltd	1.07%	156	2
Other Group Companies	81.08%	82	66
		7,590	116
	Expected credit	Gross carrying
Subsidiary - 2022 (Figures in thousands of US$)	loss rate	amount	Loss allowance
Bushveld Vametco Alloys (Pty) Ltd	0.15%	1,135	2
Bushveld Vanchem (Pty) Ltd	0.27%	1,487	4
Ivanti Resources (Pty) Ltd	7.74%	121	9
Bushveld Energy Company (Pty) Ltd	100.00%	63	63
		2,806	78

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 120 days past due.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item. There were no impairment losses on trade receivables for the 2023 and 2022 financial year.

33.7. Interest rate risk

Interest rate risk is the risk that the fair values and future cash flows of the Group's financial instruments will fluctuate because of changes in market interest rates. The Group has interest bearing financial assets and borrowings. As part of the process of managing the Group's interest rate risk, interest rate characteristics of new borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates.

As at 31 December 2023, the majority of the Groups' borrowings was at fixed rates. A one percent increase or decrease in the interest rates would result in a nominal increase or decrease in the Group's earnings in respect of borrowings held at variable rates. There was no significant change in the Group's exposure to interest rate risk during the year ended 31 December 2023.

33.8. Foreign exchange risk

The presentation currency of the Group is United States Dollar and the functional currency of its major subsidiaries are South African Rand.

The Group has foreign currency denominated assets and liabilities. Exposure to exchange rate fluctuations therefore arise. The Group has

transactional foreign exchange exposures, which arise from sales or purchases by the subsidiaries in currencies other than their functional currency. The vanadium market is predominately priced in US$ which exposes the Group to the risk of fluctuations in the ZAR:USD exchange rate. The carrying amount of the Groups foreign currency denominated monetary assets and liabilities, all in US$, are shown below:

Figures in thousands of US$	2023	2022
Cash and cash equivalents	1,224	6,723
Trade and other receivables	23,214	11,226
Trade and other payables	(36,888)	(32,652)
	(12,450)	(14,703)

The Group does not enter into any derivative financial instruments to manage its exposure to foreign currency risk.

33.9. Fair value

The fair value hierarchy categorises into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

· Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities which the entity can access at the measurement date.

· Level 2 inputs are inputs other than quoted prices included within Level 1 which are observable for the asset or liability, either directly or indirectly such as those derived from prices.

· Level 3 inputs are unobservable inputs for the asset or liability.

There have been no changes in the classification of the financial instruments in the fair value hierarchy.

(A) financial assets and liabilities measured at fair value on a recurring basis

	Carrying				Total
2023 (Figures in thousands of US$)	amount	Level 1	Level 2	Level 3	fair value
Assets
Other financial assets	24	-	-	24	24
Liabilities
Derivative liability - conversion option on Orion CLN	-	-	-	-	-
Deferred consideration	2,610	-	-	2,610	2,610
	Carrying				Total
2022 (Figures in thousands of US$)	amount	Level 1	Level 2	Level 3	fair value
Assets
Other financial assets	3,075	-	-	3,075	3,075
Liabilities
Derivative liability - conversion option on	32	-	32	-	32
Orion CLN
Deferred consideration	2,428	-	-	2,428	2,428

(B) financial assets and liabilities measured at amortised costs

	2023		2022
Financial assets (Figures in thousands of US$)	Book value	Fair value	Book value	Fair value
Trade and other receivables	21,916	21,916	5,912	5,912
Restricted investments	2,881	2,881	2,710	2,710
Cash and cash equivalents	1,281	1,281	10,874	10,874
	2023		2022
Financial assets (Figures in thousands of US$)	Book value	Fair value	Book value	Fair value
Trade and other payables	46,255	46,255	45,891	45,891

34. Contingent liabilities

Bank guarantee

As required by the Minerals and Petroleum Resources Development Act (South Africa), a guarantee amounting to US$10.91 million (2022: US$11.94 million) before tax and US$7.97 million (2022: US$8.60 million) after tax was issued in favour of the DMRE for the unscheduled closure of the Bushveld Vametco Alloys mine. This guarantee was issued on condition that a portion be deposited in cash with Centriq Insurance Company Ltd with restricted use by the Group. The restricted cash consists of US$2.88 million (2022: US$2.71 million) held by Centriq Insurance Company.

35. Related parties

Relationships

Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

VM Investment Company (Pty) Ltd ("VM Investments") is a related party due to the former Director, Fortune Mojapelo, being majority shareholder of VM Investments. VM Investments owns the offices rented by Bushveld Minerals Limited. The rent paid in 2023 financial period was US$144,237 (2022: US$206,209). The outstanding balance owned to VM Investments was US$nil as at 31 December 2023.

The Company paid on behalf of Mr Fortune Mojapelo, tax on historic shares to the value of US$351,649. The tax arises from historic shares issued to Mr Mojapelo. The Company had an obligation to settle the tax on behalf of Mr Fortune Mojapelo. The amount was previously reflected as a debtor but was written-off during the year as the Company agreed the amount is not repayable.

The remuneration of key management personnel, being the Directors and other Executive Committee members, is set out below. Further

information about the remuneration of individual directors is provided in the Directors' Remuneration Report.

Figures in thousands of US$	2023	2022
Salaries and fees	1,911	1,866
Short-term incentives	32	95
Long-term incentives	(107)	107
	1,836	2,068

36. Events after the reporting period

Orion mine finance convertible loan note refinancing

The Company completed the refinancing of its convertible loan notes issued to Orion Mine Finance on 31 January 2024. The convertible debt

obligations were refinanced as follows:

· US$4.7 million of the convertible debt obligations were capitalised into a subscription for 124,747,016 new ordinary shares;

· A new convertible loan note of US$14.1 million maturing on 30 June 2028;

· A term senior loan of US$28.3 million maturing on 30 June 2026; and

· Supplemental royalty at not more than 0.264% of the Group's gross revenues and reducing by 80% at the term loan maturity.

In June 2024, the Company entered into revised agreements with Orion Mine Finance whereby the Company will receive additional funding of up to US$10 million under the term senior loan facility. The repayment of interest and capital on the term senior loan was also amended whereby the repayment of both interest and capital will only start on 31 December 2025 and will consist of equal quarterly instalments with the final payment on 31 December 2029. The drawdown of the additional facility is subject to SARB approval.

In addition to the changes in the term senior loan, the supplemental royalty agreement was also amended to increase the royalty rate from 0.264% up to 0.5% depending on the amount of the additional drawdown on terms senior loan facility and reducing by 50% at the term loan maturity.

Sale of Vanchem

The Group has entered into a binding term sheet with SPR to conditionally sell the entire Vanchem asset for a total consideration of up to US$41.3 million, comprising an initial consideration of up to US$21.3 million and a deferred consideration of between US$15 million and US$20 million (the "Disposal"). The proposed terms of the Disposal replace those announced on 20 November 2023 for the sale of a 50% interest in Vanchem. The Disposal is conditional upon consent of Orion and Competition Commission approval. The shareholders approved the Disposal on 31 May 2024. The Disposal is expected to close in the second half of 2024.

The Vanchem CGU was written-down to its recoverable amount during the year (see note 14). As at 31 December 2023, the Vanchem asset did not meet the criteria for held for sale accounting in line with IFRS 5. Following the closing of the Disposal, the assets and liabilities of Vanchem will be derecognised and no longer form part of the consolidated results of the Group.

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