Bushveld Minerals Limited (AIM: BMN), the AIM listed, integrated primary vanadium producer, with ownership of high grade vanadium assets, is pleased to provide an operational update in respect of Lemur Holdings Limited (“Lemur”), the Company’s coal and energy subsidiary that is developing an integrated thermal coal mining and independent power project (“Imaloto Power Project”) in Madagascar.
· Social and Environmental Impact Assessment (“SEIA”) fieldwork ongoing, with more than 50 per cent of the community engagement completed.
· SEIA Terms of Reference submitted to Madagascar’s Ministry of Environment.
· Connection and Transmission Agreements signed with state utility, Jiro sy Rano Malagasy (“JIRAMA”) in Q3 2018.
· Joint review and finalisation of Bankable Feasibility Study (“BFS”) submitted by technical development partner, Sinohydro, in June 2018 still ongoing.
· Coal mine BFS initiated with completion expected in Q4 2018.
· Received expression of interest (“EOI”) for baseload power offtake from global mining company in the Imaloto supply catchment area.
· Ongoing engagement with lenders for construction phase of the Imaloto Power Project. Notably, received offer for project preparation finance from regional development finance institution, subject to due-diligence.
· Financial model development completed, subject to finalization of BFS.
· Overall, the Imaloto project is on track to deliver electricity to south western Madagascar by 2021.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented:
“We are pleased with the progress being made on the Imaloto project, especially with respect to securing institutional lenders for the construction-phase of the project, with a number of the lenders concluding the initial due-diligence on the project. We expect to advance discussions on terms of lending after the BFS is completed in Q4 2018.
“Bushveld remains committed to delivering on the value of the Imaloto Power Project by ensuring that all key milestones are achieved according to schedule. This positions the project favourably for the various strategic options the Company is considering to ensure Lemur continues to receive the focussed attention needed in terms of human resources and capital requirements in order to reach financial close, and ultimately deliver the much needed electricity to Madagascar while unlocking value for Bushveld shareholders.
“Furthermore, with presidential elections set for November and December 2018 we continue to monitor the political environment and to engage with the government of Madagascar.”
Details of Operational Update
Lemur’s Madagascar subsidiary Imaloto Power Project SARL (“IPP”) concluded a connection and transmission agreement with state utility, JIRAMA in Q3 2018. This agreement allows IPP to connect its planned new transmission line to JIRAMA’s system. It also defines the operating relationship between IPP and JIRAMA.
Lemur is now in the final stages of reviewing the BFS for the power project prepared by its technical development partner, Sinohydro in June 2018.
Similarly, the BFS for the coal mine project which started in Q3 2018 is expected to be completed in Q4 2018. Some of the key expected outputs of the mine BFS include a detailed mine plan and the economic techno-financial model.
Both the power and the mine BFS are critical considerations for lenders to assess the viability of the Imaloto project. Once the BFS studies are completed, Lemur will proceed to the EPC discussions, which will be a key focus area for the remainder of 2018.
With regards to the SEIA study, Lemur through its environmental consultants, has conducted extensive environmental studies on both the project site and impacted areas. In September 2018, Lemur’s SEIA consultants submitted the Terms of Reference of the SEIA study to the Ministry of Environment of Madagascar. The SEIA fieldwork is on track and is expected to be completed in Q4 2018. However, Lemur has made an allowance to conduct specialised studies to include rainy season impact scenarios, which may extend the completion of the technical SEIA studies to Q1 2019.
Prince Nyati, CEO of Lemur Holdings Limited, commented:
“The BFS and SEIA studies have been our key focus areas in Q3 2018. Notwithstanding, we are pleased to announce the conclusion of the Transmission and Connection agreement with JIRAMA. This is a significant development because the agreement not only addresses the critical aspects of how IPP will connect to the JIRAMA network, but it also provides clarity on the link between the provisions of the concession agreement and the PPA.
“Our focus for the remainder of 2018 is to complete both the mine and power BFS studies, which we expect to finalise in Q4 2018. We will also be progressing project funding discussions and related due-diligence activities as well as initiating EPC discussions.”
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